<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, 2003

                                       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 $5,463,009

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. $2,072,492

The Issuer had 3,082,668 shares of common stock outstanding on March 12, 2004.

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

DOCUMENTS INCORPORATED BY REFERENCE:  PORTIONS OF THE 2004 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.....................................    2
Item 3:      Legal Proceedings...........................................    7
Item 4:      Submission of Matters to a Vote of Security Holders.........    7

PART II
Item 5:      Market for the Registrant's Common Equity and Related
             Stockholder Matters.........................................    7
Item 6:      Management's Discussion and Analysis or Plan of Operation...    8
Item 7:      Financial Statements........................................   14
Item 8:      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure....................................   14
Item 8a:     Disclosure Controls and Procedures..........................   14

PART III
Item 9:      Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the Exchange
             Act.........................................................   15
Item 10:     Executive Compensation......................................   15
Item 11:     Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters..................   15
Item 12:     Certain Relationships and Related Transactions..............   15
Item 13:     Exhibits, List, and Reports on Form 8-K.....................   15
Item 14:     Principal Accountant Fees and Services......................   16
</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 purchases 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, 2003, Liberty owned and operated 19
self-storage facilities consisting of 875,968 square feet of inside rentable
storage, situated in two states, Ohio and New York. The average occupancy at the
facilities increased to 74.10% as of December 31, 2003 from 72.78% as of
December 31, 2002. The average annual rental rate per occupied square foot
increased 1.84% to $7.76 as of December 31, 2003, from $7.62 as of December 31,
2002.

     Liberty seeks to increase cash flow and enhance shareholder value through
efficient management and selective acquisitions of new 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 2003 compared to 2002 and expects similar
increases in 2004 compared to 2003. Liberty expects to achieve 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.

     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, and this sales tax will continue
to limit Liberty's ability to increase rates in 2004.

                                        1
<PAGE>

     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 30 full-time and 14 part-time
employees, including 20 on-site managers and 2 regional managers. None of
Liberty's employees are covered by a collective bargaining agreement. Liberty
considers its employee relations to be excellent.

ITEM 2.  DESCRIPTION OF PROPERTY

THE SELF-STORAGE FACILITIES

     As of December 31, 2003, Liberty owned and operated 19 self-storage
facilities containing an aggregate of 875,968 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.
Sixteen 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:

<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*      67,623         6.12     496    Masonry & Steel
Canton................   4/22/97          1979-87       41,175        11.15     388    Concrete
Catawba...............   6/30/97        1988/1998*      49,500         7.57     299    Steel
Cleveland.............   12/3/96        1997/1999*      46,400         3.68     353    Steel
Dayton................   5/22/97        1989/2000*      47,200         5.00     367    Concrete
East Canton...........   5/30/97             1997       26,700        12.63     176    Steel
East Liverpool........  10/31/96        1986-1996       29,840        11.49     211    Steel
Leuer Avenue..........   5/22/00             2000       58,550         1.80     590    Steel
Louisville............   5/30/97        1988-1990       54,000         6.83     358    Masonry
Mentor................   3/20/98        1983/1999*      59,405         6.00     442    Masonry
Painesville (1).......  10/01/00        1940/2000*      29,600         3.20     361    Steel
Perry.................   1/10/97        1992/1997*      64,050         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     460    Masonry/Steel
Willoughby............   10/4/96             1997       33,639         2.37     274    Masonry
NEW YORK:
Endicott..............  11/20/96             1989       35,773         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*      38,890         3.05     336    Steel
                                                       -------       ------   -----
TOTAL............................................      875,968       109.81   7,178
                                                       =======       ======   =====
</Table>

                                        2
<PAGE>

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

 * Year additional units were added by Liberty.

(1) In addition, Painesville has 19,985 square feet of office and retail space,
    with an occupancy rate of 96.6% and an annual rental rate of $11.50 per
    square foot at December 31, 2003.

(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 $6.31 per square foot at
    December 31, 2003.

     The following table shows the occupancy rates and annual rental rates per
square foot for inside storage at each of the 19 self-storage facilities for the
year ended December 31, 2003:

<Table>
<Caption>
                                                                            ANNUAL RENTAL
                                                                          RATE PER OCCUPIED
LOCATION                                                 OCCUPANCY RATE      SQUARE FOOT
--------                                                 --------------   -----------------
<S>                                                      <C>              <C>
OHIO:
Avon...................................................      90.94%            $ 6.30
Canton.................................................      68.72               4.91
Catawba................................................      81.23               4.33
Cleveland..............................................      88.42              10.10
Dayton.................................................      75.42               7.78
East Canton............................................      75.47               5.01
East Liverpool.........................................      77.93               5.14
Leuer Avenue...........................................      41.50              10.51
Louisville.............................................      86.50               5.23
Mentor.................................................      53.10               7.99
Painesville............................................      28.97              10.27
Perry..................................................      63.08               5.79
Ravenna................................................      77.73               6.94
Springfield............................................      78.14               6.07
Westlake...............................................      89.85               8.84
Willoughby.............................................      77.04               8.39

NEW YORK:
Endicott...............................................      80.81               8.52
Southold...............................................      87.16              13.76
Riverhead..............................................      75.08              12.89
                                                             -----             ------
TOTAL..................................................      74.10%            $ 7.76
                                                             =====             ======
</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 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

                                        3
<PAGE>

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 19 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.

     Proposed Expansions.  In the first quarter of 2004, Liberty purchased land
adjacent to its Ravenna, Ohio site, adding expansion space for 18,000 additional
square feet or 150 storage units. The land purchase for approximately $100,000
was funded from operations. Also, Liberty has 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. At
this time, Liberty has no other agreements or plans to purchase any other
facilities, or expand existing facilities, although the company engages in
discussions with potential sellers of self-storage facilities from time to time.

     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 $2,500 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 3.67%, 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, 2003, was $8,310,037. 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

                                        4
<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 fixed rate exceeds the 30-day LIBOR rate by 0.78%.

     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 3.67%, 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,
2003, was $690,242.

     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 3.67%, 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, 2003, was $239,537.

     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 0.50%, currently 4.50%. Monthly
principal and interest payments are currently $10,542, amortized over a 22-year
period. The principal amount of the loan as of December 31, 2003, was
$1,665,476.

     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, 2003, was
$1,701,117.

     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 3.42%. This note is guaranteed by Mr.
Osborne. The principal amount of the loan as of December 31, 2003, was
$3,169,731. 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, 2003, the fixed rate exceeded the 30-day LIBOR by
4.27%.

     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, 2003 was $3,433,967.

     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 $10,475, with the
interest rate at the 30-day LIBOR plus 2.50%, using a 15-year amortization. The
current rate is 3.67%. This note is guaranteed by Mr. Osborne. The principal
amount of the loan as of December 31, 2003, was $1,116,358.

     The Springfield facility is encumbered by a mortgage in the amount of
$1,600,000, maturing on June 1, 2005. Current payments are $3,195 plus interest
at a fixed rate of 9.10%, using a 20-year amortization. This note

                                        5
<PAGE>

is personally guaranteed by Mr. Osborne. The principal amount of the loan as of
December 31, 2003, was $1,479,598. 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, 2003, was $473,682.

     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
4.75%. 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, 2003, was
$2,388,246.

     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 3.67%, 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, 2003, was $1,791,699. 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 $4,333. The current rate is
4.00%. The principal amount of the loan as of December 31, 2003, was $1,300,000.

     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. Liberty
operates and manages its self-storage facilities as the general partner of the
operating partnership. Although Liberty presently intends to focus its
investment strategy on self-storage facilities, 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

        8. issue annual 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.

                                        6
<PAGE>

     - 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 REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     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".

     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

                                        7
<PAGE>

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>
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

2002
First Quarter...............................................  $0.15   $0.09
Second Quarter..............................................   0.20    0.08
Third Quarter...............................................   0.28    0.10
Fourth Quarter..............................................   0.39    0.20
</Table>

     Record Holders.  As of March 12, 2004, Liberty's shares of common stock
were held of record by approximately 2,001 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 2003 or
2002. 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 2003 or 2002 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 2003 or 2002.

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

INTRODUCTION AND DISCUSSION OF KNOWN TRENDS, EVENTS AND UNCERTAINTIES

     On December 29, 1999, Liberty Self-Stor, Inc., a Maryland corporation,
succeeded to the business of Meridian Point Realty Trust '83.

     The following discussion should be read in conjunction with the
accompanying Consolidated Balance Sheets, Statements of Operations and
Comprehensive Loss, Statements of Shareholders' Equity, 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.

                                        8
<PAGE>

     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.

     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, 2003.

     In 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 requires companies reporting goodwill to perform an annual
analysis for potential impairment of the carrying value of the asset. In 2002,
Liberty completed its transitional impairment test under SFAS No. 142 and, in
the first quarter of 2002, Liberty wrote off $282,721 of goodwill associated
with the acquisition of Liberty Self-Stor, Ltd and the Springfield facility, net
of accumulated amortization. Liberty determined that the total goodwill was
impaired based upon the fair market value of its common stock (based upon quoted
prices) in relation to the total shareholders' equity of the company as of
January 1, 2002. At January 1, 2002, the market prices of Liberty's common stock
had been for an extended period of time considerably lower than the price on
December 29, 1999, the reorganization date. In addition, at January 1, 2002,
Liberty had experienced recurring net losses. The write-off, net of minority
interest, is reflected as a cumulative effect of a change in accounting.

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. In
2003, Liberty incurred a net loss equal to $68,382 as compared to a net loss of
$289,220 in 2002. Cash and cash equivalents were $534,346 at the end of 2003, as
compared to $263,795 at the end of 2002. 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 refinanced some of its maturing
long-term debt in order to satisfy its obligations and to generate additional
cash to meet its financial commitments.

     Liberty's current maturities of long-term debt decreased $1,272,501, or
56.4%, to $983,347 at December 31, 2003, from $2,255,848 in the prior year. The
decrease is a result of Liberty's refinancing on a long-term basis, the loans
associated with the Riverhead and Painesville facilities.

                                        9
<PAGE>

     The following table 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
                                     ---------------------------------------------------------
CONTRACTUAL OBLIGATIONS              LESS THAN 1 YEAR   1-3 YEARS    4-5 YEARS   AFTER 5 YEARS     TOTAL
-----------------------              ----------------   ----------   ---------   -------------   ----------
<S>                                  <C>                <C>          <C>         <C>             <C>
Long-Term Debt.....................       983,347       16,715,674   2,423,125     7,637,544     27,759,690
Operating Lease*...................        48,000          120,000     120,000        60,000        348,000
                                        ---------       ----------   ---------     ---------     ----------
Total Contractual Cash
  Obligations......................     1,031,347       16,835,674   2,543,125     7,697,544     28,107,690
                                        =========       ==========   =========     =========     ==========
</Table>

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

* The operating lease for office space has a five-year renewal option until
  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.

     There can be no assurance that Liberty will be able to retire or refinance
any or all of its maturing debt. 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 shareholders 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 Liberty believes are reasonable or obtain additional debt on
favorable terms. 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.

     During the twelve months ended December 31, 2003 and 2002, Liberty had no
cash distributions to its shareholders. Liberty does not anticipate making any
cash distributions in 2004.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

  REVENUES

     Revenues from real estate operations increased $142,232, or 2.7%, to
$5,461,033 for the year ended December 31, 2003, from $5,318,801 in the prior
year, primarily as a result of overall increased occupancy rates. Revenues at
eleven of the nineteen sites increased a total of approximately $254,000, led by
a $120,000 revenue increase at our Westlake, Ohio facility. These increases were
offset by declines at Liberty's eight other facilities totaling approximately
$112,000. The occupancy rates at the self-storage facilities increased to 74.10%
as of December 31, 2003, from 72.78% as of December 31, 2002.

     Interest and other revenues increased in 2003 as compared to 2002. The
increase was due to higher invested cash balances in 2003.

  EXPENSES

     Interest expense decreased $516,014, or 26.1%, to $1,464,255 for the year
ended December 31, 2003, from $1,980,269 in the prior year. The decrease in
interest expense was attributable to lower variable rates on existing mortgages
and refinancing and amending existing mortgages at more favorable interest
rates.

                                        10
<PAGE>

     Property taxes and insurance expenses increased $56,879, or 9.4%, to
$664,090 for the year ended December 31, 2003, from $607,211 in the prior year.
Property taxes increased partially due to normal property valuation increases
for the Ohio self-storage facilities. Offsetting these increases was the
disputed property value on Liberty's tax bill for the Painesville, Ohio site
which Liberty believed had an assessed value greater than the historical cost
and market value of the property. These disputes were resolved favorably to
Liberty and led to a decrease in the assessed value for the Painesville
facility.

     Property operating expenses increased $154,594, or 13.7%, to $1,284,710 for
the year ended December 31, 2003, from $1,130,116 in the prior year. The
increase in property operating expenses was partially attributable to an
increase in repairs and maintenance of $65,948 due to necessary repairs in
Riverhead, New York, Canton, Ohio and Mentor, Ohio. Also, increases of $34,216
in snow removal costs at our New York sites was higher than usual due to heavier
snowfalls than in the prior winter, necessitating the usage of large equipment
beyond that of the customary snow plowing.

     Legal and professional fees remained flat, increasing only by $6,823, from
$156,193 in 2002 to $163,016 in 2003.

     General and administrative expenses decreased $29,369, or 3.7%, to $754,478
for the year ended December 31, 2003, from $783,847 in the prior year. The
decrease in general and administrative expenses was primarily due to the
decrease in salaries with the establishment of a receivable for related party
salary reimbursement of $50,019 for the year 2003 offset by increased workers
compensation expenses. The increase in worker's compensation expenses was caused
by the elimination by the Ohio Bureau of Workers Compensation of a traditional
seventy-five percent discount previously given on premiums due by Liberty.

  NET LOSS

     As a result of the factors noted above, Liberty's net loss decreased
$220,838, or 76.4%, to $68,382 for the year ended December 31, 2003, from a net
loss of $289,220 in the prior year. Net loss for the year ended December 31,
2002 included an $84,817 expense related to the cumulative effect of a change in
accounting for goodwill, net of minority interest, as of January 1, 2002 in
connection with Liberty's adoption of SFAS No. 142, "Goodwill and Other
Intangible Assets." In 2002, Liberty completed its transitional impairment
analysis of goodwill and wrote off the entire net carrying value of $282,721
effective January 1, 2002. The write-off of goodwill is reflected on the
consolidated statements of operations and comprehensive loss as $84,817, which
is the $282,721 write-off net of the $197,904 minority interest. See further
discussion under "Accounting Policies."

  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.

                                        11
<PAGE>

The following table sets forth the calculation of FFO:

<Table>
<Caption>
                                                        TWELVE MONTHS       TWELVE MONTHS
                                                            ENDED               ENDED
                                                      DECEMBER 31, 2003   DECEMBER 31, 2002
                                                      -----------------   -----------------
<S>                                                   <C>                 <C>
Net loss............................................     $  (68,382)          $(289,220)
Adjustments:
Depreciation of real estate and amortization of
  deferred loan fees................................      1,360,399           1,344,109
Cumulative effect of change in accounting principle,
  net of minority interest..........................             --              84,817
Minority interest...................................       (159,557)           (476,943)
                                                         ----------           ---------
FFO.................................................     $1,132,460           $ 662,763
                                                         ==========           =========
</Table>

  INTEREST RATE RISK

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

     The variable portion of Liberty's debt is approximately $25.8 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 $258,000 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. This interest rate swap transaction, which had
an original notional amount of $1,650,000 (notional amount of $1,586,365 at
December 31, 2003) 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, 2003, the
fixed rate exceeded the 30-day LIBOR by 4.27%

     In the second quarter of 2003, Liberty entered into an interest rate swap
agreement in connection with mortgage notes which had an original notional
amount of $10,598,000 (notional amount of $10,418,000 at December 31, 2003). The
swap expires concurrently with the mortgage notes on June 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 fixed rate exceeds
the 30-day LIBOR rate by 0.78%. Both of these interest rate swap agreements have
been accounted for as cash flow hedges pursuant to SFAS No. 133.

     The fair market value of the swaps at December 31, 2003 and December 31,
2002, of approximately $10,107 and ($125,948), respectively is included in other
assets and other long-term liabilities, respectively in Liberty's consolidated
balance sheet, while the change in the aggregate fair value of the swaps, net of
minority interest, is reflected in the determination of comprehensive income for
the reporting periods.

     Liberty has no other off-balance sheet arrangements.

                                        12
<PAGE>

  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:

     - Liberty's continued tax status as a REIT;

     - the imposition in Ohio on August 1, 2003, of a sales tax on self-storage
       facility customers, affecting Liberty's ability to increase occupancy and
       rental rates at its self-storage facilities;

     - 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 proposed expansion in Ravenna,
       Ohio and the acquisition near Columbus, Ohio;

     - 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, 2003. 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 shareholders. 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.

                                        13
<PAGE>

  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred and a corresponding increase in the carrying amount of the related
long-lived asset. SFAS No. 143 is effective for fiscal years beginning after
September 15, 2002. Adoption of SFAS No. 143 as of January 1, 2003 had no effect
on the financial position or results of operations of Liberty.

     In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 is effective for exit
or disposal activities initiated after December 31, 2002. Liberty had no such
exit or disposal activities in 2003.

     In January 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003) ("FIN 46R"), "Consolidation of Variable Interest Entities." FIN
46R revises 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 May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity"
("SFAS 150"), which changes the accounting for certain financial instruments
that, under previous guidance, issuers could account for as equity. SFAS 150
became effective immediately for financial instruments entered into or modified
after May 31, 2003, and became effective for interim periods beginning after
June 15, 2003 for financial instruments entered into before May 31, 2003. SFAS
150 requires that those instruments be classified as liabilities in statements
of financial position. Adoption of SFAS 150 had no effect on the results of
operations or financial position of Liberty.

ITEM 7.  FINANCIAL STATEMENTS

     Liberty's Report of Independent Accountants 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, 2003, the date of this report, Liberty carried out an
evaluation under the supervision and with the participation of Liberty's
management, including Liberty's Chairman and 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 President and Chief Financial Officer concluded
that, as of December 31, 2003, Liberty's disclosure controls and procedures are
effective to ensure that material information relating to Liberty and its
consolidated subsidiaries is recorded, processed, summarized and reported in a
timely manner.

     Further, there were no significant changes in Liberty's internal controls
or, to our knowledge, in other factors that could significantly affect such
controls subsequent to December 31, 2003.

                                        14
<PAGE>

                                    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 2004 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 April
29, 2004.

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.

                      EQUITY COMPENSATION PLAN INFORMATION

<Table>
<Caption>
                                                                                       NUMBER OF SECURITIES
                                     NUMBER OF SECURITIES                             REMAINING AVAILABLE FOR
                                         TO BE ISSUED          WEIGHTED-AVERAGE        FUTURE ISSUANCE UNDER
                                       UPON EXERCISE OF       EXERCISE PRICE OF      EQUITY COMPENSATION PLANS
                                     OUTSTANDING OPTIONS,    OUTSTANDING OPTIONS,      (EXCLUDING SECURITIES
                                     WARRANTS AND RIGHTS     WARRANTS AND RIGHTS     REFLECTED IN COLUMN (A))
                                             (A)                     (B)                        (C)
                                     --------------------   ----------------------   -------------------------
<S>                                  <C>                    <C>                      <C>
Equity compensation plans approved
  by security holders..............        170,000                 $0.5473                    130,000
                                           -------                 -------                    -------
Equity compensation plans not
  approved by security holders.....             --                      --                         --
                                           -------                 -------                    -------
  Total............................        170,000                 $0.5473                    130,000
                                           =======                 =======                    =======
</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

     (In accordance with Item 601 of Regulation S-B)

<Table>
<Caption>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<C>           <S>
    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.)
</Table>

                                        15
<PAGE>

<Table>
<Caption>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<C>           <S>
    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.)

   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.)

   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

     On November 14, 2003, Liberty issued a press release containing Liberty's
financial results for the third quarter of 2003.

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.

                                        16
<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 24, 2004                          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
                   ---------                                     -----                       ----
<S>                                               <C>                                   <C>


/s/ RICHARD M. OSBORNE                            Chairman, Chief Executive Officer     March 24, 2004
------------------------------------------------  and Director (Principal Executive
Richard M. Osborne                                Officer)


/s/ THOMAS J. SMITH                               President, Chief Operating Officer    March 24, 2004
------------------------------------------------  and Director
Thomas J. Smith


/s/ MARC C. KRANTZ                                Secretary and Director                March 24, 2004
------------------------------------------------
Marc C. Krantz


/s/ C. JEAN MIHITSCH                              Chief Financial Officer (Principal    March 24, 2004
------------------------------------------------  Financial and Accounting Officer)
C. Jean Mihitsch


/s/ MARK D. GROSSI                                Director                              March 24, 2004
------------------------------------------------
Mark D Grossi


/s/ STEVEN A. CALABRESE                           Director                              March 24, 2004
------------------------------------------------
Steven A. Calabrese
</Table>

                                        17
<PAGE>

To the Shareholders and Board of Directors of
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, 2003
and 2002, and the related consolidated statements of operations and
comprehensive loss, shareholders' 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the 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, 2003 and 2002, 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.

     As discussed in Note 2 to the consolidated financial statements, Liberty
Self-Stor, Inc. and Subsidiary adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, on January 1, 2002.

/s/ GRANT THORNTON LLP

Cleveland, Ohio
February 20, 2004

                                        18
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

                    DECEMBER 31, 2003 AND DECEMBER 31, 2002

<Table>
<Caption>
                                                                 2003          2002
                                                              -----------   -----------
<S>                                                           <C>           <C>
                           ASSETS
CURRENT ASSETS:
  Cash......................................................  $   534,346   $   263,795
  Accounts receivable.......................................      105,924        81,226
  Accounts receivable from related parties..................       82,748        16,500
  Other current assets......................................       17,229        38,375
                                                              -----------   -----------
     Total current assets...................................      740,247       399,896
PROPERTY AND EQUIPMENT:
  Land......................................................    4,189,306     4,189,306
  Buildings and improvements................................   31,015,501    30,992,608
  Furniture and equipment...................................      246,669       251,467
                                                              -----------   -----------
                                                               35,451,476    35,433,381
  Less -- Accumulated depreciation..........................    4,886,775     3,587,309
                                                              -----------   -----------
                                                               30,564,701    31,846,072
OTHER ASSETS................................................      230,030       226,804
                                                              -----------   -----------
     Total assets...........................................  $31,534,978   $32,472,772
                                                              ===========   ===========
            LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
  Current maturities of long-term debt......................  $   983,347   $   955,848
  Notes payable to related party............................           --     1,300,000
  Accounts payable..........................................      131,389       159,409
  Accounts payable to related parties.......................      377,881       295,553
  Accrued expenses..........................................    1,174,698     1,027,030
                                                              -----------   -----------
       Total current liabilities............................    2,667,315     3,737,840
LONG-TERM DEBT, net of current maturities:
  Related party.............................................    1,300,000       500,000
  Third party...............................................   25,476,343    25,920,504
OTHER LONG-TERM LIABILITIES.................................       17,370       148,593
MINORITY INTEREST LIABILITY.................................    1,448,924     1,513,244
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...........................  (25,111,937)  (24,822,717)
  Retained earnings -- current year loss....................      (68,382)     (289,220)
  Accumulated other comprehensive income(loss) --
     Fair value of cash flow hedges.........................        3,033       (37,784)
       Total shareholders' equity...........................      625,026       652,591
                                                              -----------   -----------
       Total liabilities and shareholders' equity...........  $31,534,978   $32,472,772
                                                              ===========   ===========
</Table>

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.
                                        19
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

<Table>
<Caption>
                                                                 2003         2002
                                                              ----------   ----------
<S>                                                           <C>          <C>
REVENUES:
  Revenues from real estate operations......................  $5,461,033   $5,318,801
  Interest and other........................................       1,976        1,598
                                                              ----------   ----------
     Total revenues.........................................   5,463,009    5,320,399
                                                              ----------   ----------
OPERATING EXPENSES:
  Interest expense..........................................   1,464,255    1,980,269
  Property taxes and insurance..............................     664,090      607,211
  Property operating expenses...............................   1,284,710    1,130,116
  Legal and professional fees...............................     163,016      156,193
  General and administrative, including amounts paid to a
     related party of $48,000 each year.....................     754,478      783,847
  Depreciation and amortization.............................   1,360,399    1,344,109
                                                              ----------   ----------
     Total expenses.........................................   5,690,948    6,001,745
                                                              ----------   ----------
Loss before minority interest and cumulative effect of a
  change in accounting principle............................    (227,939)    (681,346)
Minority interest...........................................     159,557      476,943
                                                              ----------   ----------
Loss before cumulative effect of a change in accounting
  principle.................................................     (68,382)    (204,403)
Cumulative effect of a change in accounting principle, net
  of minority interest of $197,904..........................          --      (84,817)
                                                              ----------   ----------
     Net loss...............................................     (68,382)    (289,220)
                                                              ----------   ----------
Other comprehensive income (loss):
Changes in fair values of cash flow hedges, net of minority
  interest of $95,237 and $88,164...........................      40,817      (37,784)
                                                              ----------   ----------
Comprehensive loss..........................................  $  (27,565)  $ (327,004)
                                                              ==========   ==========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING.................   3,082,668    3,082,688
NET LOSS PER COMMON SHARE -- BASIC AND DILUTED BEFORE
  CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE.......  $    (0.02)  $    (0.06)
NET LOSS PER COMMON SHARE -- BASIC AND DILUTED FOR
  CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE.......          --        (0.03)
                                                              ----------   ----------
NET LOSS PER COMMON SHARE -- BASIC AND DILUTED..............  $    (0.02)  $    (0.09)
                                                              ==========   ==========
</Table>

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

                                        20
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

<Table>
<Caption>
                                                                         ACCUMULATED
                                                           RETAINED         OTHER
                                  COMMON     PAID-IN       EARNINGS     COMPREHENSIVE
                                  STOCK      CAPITAL        (LOSS)          LOSS          TOTAL
                                  ------   -----------   ------------   -------------   ---------
<S>                               <C>      <C>           <C>            <C>             <C>
BALANCE, December 31, 2001......  $3,083   $25,799,229   $(24,822,717)    $     --      $ 979,595
  Net loss......................     --             --       (289,220)          --       (289,220)
  Change in fair value of cash
     flow hedge.................     --             --             --      (37,784)       (37,784)
                                  ------   -----------   ------------     --------      ---------
BALANCE, 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, December 31, 2003......  $3,083   $25,799,229   $(25,180,319)    $  3,033      $ 625,026
                                  ======   ===========   ============     ========      =========
</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 CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

<Table>
<Caption>
                                                                 2003          2002
                                                              -----------   -----------
<S>                                                           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................................  $   (68,382)  $  (289,220)
Adjustments to reconcile net loss to net cash from operating
  activities:
     Depreciation and amortization..........................    1,360,399     1,344,109
     Minority interest......................................     (159,557)     (674,847)
     Loss on disposal of property...........................        3,019            --
     Cumulative effect of change in accounting principle....           --       282,721
Changes in operating assets and liabilities:
  Restricted cash...........................................           --         2,192
  Accounts receivable.......................................      (90,946)      (14,957)
  Other current assets......................................       21,146       (14,088)
  Other assets..............................................      (54,052)     (161,714)
  Accounts payable..........................................       54,308       (13,056)
  Accrued expenses..........................................      147,668        33,770
  Other liabilities.........................................       (5,276)      162,250
                                                              -----------   -----------
       Net cash provided by operating activities............    1,208,327       657,160
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net....................      (38,614)     (101,855)
Proceeds from sale of equipment.............................       17,500            --
                                                              -----------   -----------
     Net cash provided (used) by investing activities.......      (21,114)     (101,855)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable.........................   (1,975,099)   (5,955,986)
Borrowings on notes payable.................................    1,058,437     5,550,000
                                                              -----------   -----------
     Net cash used in financing activities..................     (916,662)     (405,986)
                                                              -----------   -----------
NET INCREASE IN CASH........................................      270,551       149,319
CASH, beginning of period...................................      263,795       114,476
                                                              -----------   -----------
CASH, end of period.........................................  $   534,346   $   263,795
                                                              ===========   ===========
</Table>

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

                                        22
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2003 AND 2002

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, 2003, Liberty and the former members of the
Ohio LLC have 30% and 70% equity interests in LSS, respectively. The minority
interest liability of $1,448,924 at December 31, 2003, 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, 2003, Liberty owned and operated 19
self-storage facilities.

2.  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.
Amounts outstanding longer than the contractual payment terms are considered to
be past due. 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 2003 was $120,461 compared to $118,050
in 2002, while recoveries were $99,908 in 2003 and $87,828 in 2002. 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, 2003 and 2002.

                                        23
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

  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.

     In 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-lived Assets." SFAS No. 144 requires that one accounting model
be used for long-lived assets to be disposed of by sale, whether previously held
and used or newly acquired, and broadens the presentation of discontinued
operations to include more disposal transactions. The adoption of SFAS No. 144
as of January 1, 2002 had no impact on Liberty's operations or financial
position.

     In 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 requires companies reporting goodwill to perform an annual
analysis for a potential impairment in carrying value of the asset. Liberty
completed its transitional impairment test under SFAS No. 142 in the first
quarter of 2002 and wrote off the goodwill associated with the acquisition of
the Ohio LLC and the Springfield facility, which was $282,721, net of
accumulated amortization. Liberty determined that the total goodwill was
impaired based upon the fair market value of its common stock (based upon quoted
prices) in relation to the total shareholders' equity of the company as of
January 1, 2002. At January 1, 2002, the market price of Liberty's common stock
had been at levels considerably lower than at the December 29, 1999
reorganization date for an extended period of time, and Liberty had experienced
recurring net losses. The write-off, net of minority interest, is reflected as a
cumulative effect of a change in accounting.

     The following are changes in the carrying amount of goodwill for the year
ended December 31, 2002:

<Table>
<Caption>
                                                              2002
                                                            --------
<S>                                                         <C>
Balance as of January 1..................................   $282,721
Amortization expense.....................................         --
Impairment loss..........................................   (282,721)
                                                            --------
Balance as of December 31................................   $     --
                                                            ========
</Table>

  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 approximately $260,000 and $244,000 for the years

                                        24
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

ended December 31, 2003 and 2002, respectively. Revenue under these long-term
lease agreements is recognized on a straight-line basis over the respective
lease terms.

     Future minimum lease revenue under non-cancelable leases is as follows at
December 31, 2003:

<Table>
<Caption>
                                                             TOTALS
                                                           ----------
<S>                                                        <C>
2004....................................................   $  240,000
2005....................................................      236,000
2006....................................................      226,000
2007....................................................      215,000
2008....................................................      170,000
Thereafter..............................................      297,000
                                                           ----------
                                                           $1,384,000
                                                           ==========
</Table>

  Comprehensive Income

     "SFAS" No. 130, "Reporting Comprehensive Income" requires disclosure of
comprehensive income and its components in a full set of general-purpose
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.

  Reclassification

     Certain reclassifications have been made to the 2002 financial statements
to conform to 2003 presentation.

  Advertising Costs

     Liberty expenses advertising and promotion costs when incurred. Amounts
expensed for advertising and promotion approximated $166,000 for the year ended
December 31, 2003 compared to $129,000 for the year ended December 31, 2002.

  Employee Benefits

     The 1999 Stock Option Plan ("the Plan"), which was approved by
shareholders, 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 300,000 options or
restricted shares pursuant to the Plan. As of December 31, 2003 and 2002,
170,000 options have been granted. In January 2003, all options had become
vested. There were no options granted, exercised or cancelled in 2003 or 2002.

     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 proforma
effect on compensation expense in 2003 and 2002 related to the stock options
granted is not presented since it is immaterial.

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

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

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

<Table>
<Caption>
                                                        2003                 2002
                                                 ------------------   ------------------
                                                           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......................................       --                   --
Outstanding at end of year.....................  170,000    $0.55     170,000    $0.55
Options available for grant....................  130,000              130,000
Exercisable at end of year.....................  170,000    $0.55     161,666    $0.55
</Table>

  Estimates, Risks and Uncertainties

     The preparation of financial statements in conformity with accounting
principals 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

     Fair value is determined by using available market information and
appropriate valuation methodologies. Liberty's principal financial instruments
are cash, accounts receivable, notes payable, and interest rate swaps. Cash and
accounts receivable, 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, 2003 is approximately $28,065,000 as compared to a carrying
value of $27,759,690. At December 31, 2002, the fair value of long-term debt was
approximately $29,971,000 as compared to a carrying value of $28,676,352. 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 derivatives on the balance sheet as assets and 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 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 value of the swaps at December 31, 2003 and December
31, 2002, of approximately $10,107 and ($125,948), respectively is included in
other assets and other long-term liabilities, respectively, in the accompanying
consolidated balance sheet, while the change in the aggregate fair value of the
swaps, net of minority interest, is reflected in the determination of
comprehensive income for the reporting periods.

  Recently Issued Accounting Pronouncements

     In 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is

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

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

incurred and a corresponding increase in the carrying amount of the related
long-lived asset. SFAS No. 143 is effective for fiscal years beginning after
September 15, 2002. Adoption of SFAS No. 143 as of January 1, 2003 had no effect
on the financial position or results of operations of Liberty.

     In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 is effective for exit
or disposal activities initiated after December 31, 2002. Liberty had no such
exit or disposal activities in 2003.

     In January 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003) ("FIN 46R"), "Consolidation of Variable Interest Entities." FIN
46R revises 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 May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity"
("SFAS 150"), which changes the accounting for certain financial instruments
that, under previous guidance, issuers could account for as equity. SFAS 150
became effective immediately for financial instruments entered into or modified
after May 31, 2003, and became effective for interim periods beginning after
June 15, 2003 for financial instruments entered into before May 31, 2003. SFAS
150 requires that those instruments be classified as liabilities in statements
of financial position. Adoption of SFAS 150 had no effect on the results of
operations or financial position of Liberty.

3.  LONG-TERM DEBT:

     Long-term debt consists of the following:

<Table>
<Caption>
                                                                2003          2002
                                                             -----------   -----------
<S>                                                          <C>           <C>
Mortgage note payable to a bank with monthly installments
  of $23,909, plus interest at 30-day LIBOR plus 2.50%
  (currently 3.67%), amortized over a 20-year period with a
  maturity date of June 1, 2006, secured by certain real
  property and personally guaranteed by a stockholder of
  Liberty..................................................  $ 8,310,037   $ 8,597,966

Mortgage note payable to a bank with monthly installments
  of $706, plus interest at 30-day LIBOR plus 2.50%
  (currently 3.67%), amortized over a nineteen-year period
  with a maturity date of June 1, 2006, secured by certain
  real property and personally guaranteed by a stockholder
  of Liberty...............................................      239,537       248,003

Mortgage note payable to a bank with monthly installments
  of $13,694, including interest at 2.75% above the current
  weekly average yield on U.S. Treasury Securities adjusted
  to the constant maturity of three Years (currently 5.50%)
  amortized over a 20-year period with a maturity date of
  June 4, 2009, secured by certain real property and
  personally guaranteed by a stockholder of Liberty........    1,701,117     1,758,410

Mortgage note payable to individuals in monthly
  installments of $5,207 including interest at 8.50%
  payable on a 20-year amortization, due June 2004, secured
  by certain real property, and personally guaranteed by a
  stockholder of Liberty. Retired in February 2003.........           --       553,379
</Table>

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

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

<Table>
<Caption>
                                                                2003          2002
                                                             -----------   -----------
<S>                                                          <C>           <C>

Mortgage note payable to a bank for construction and term
  financing of real property with monthly installments of
  approximately $10,475, including interest at 30-day LIBOR
  plus 2.50% (currently 3.67%), amortized over a
  fifteen-year period with a maturity date of June 1, 2006,
  secured by certain real property and personally
  guaranteed by a stockholder of Liberty, as amended in
  February 2003 to borrow additional principal in the
  amount of $1,058,437 and reduce the interest rate........  $ 1,116,358   $   135,402

Mortgage note payable to a bank for construction and term
  financing of real property, interest at 30-day LIBOR plus
  2.50% (currently 3.67%), amortized over a fifteen-year
  period with a maturity date of June 1, 2006, secured by
  certain real property and personally guaranteed by a
  stockholder of Liberty...................................      690,242       726,327

Mortgage note payable to a bank for term financing, payable
  in monthly installments of $3,195, plus interest at a
  fixed rate of 9.10%, amortized over a 20-year period with
  a maturity date of June 1, 2005, secured by certain real
  property and personally guaranteed by a stockholder of
  Liberty..................................................    1,479,598     1,516,450

Mortgage note payable to an individual with monthly
  installments of $3,777, including interest at a fixed
  rate of 7.75%, amortized over a 25-year period with a
  maturity date of June 30, 2025, secured by certain real
  property and personally guaranteed by a stockholder of
  Liberty..................................................      473,682       481,941

Mortgage note payable to a bank for construction and term
  financing of real property, payable in monthly
  installments of $17,141, including interest at 0.75% over
  the bank's prime rate (currently 4.75%), amortized over a
  ten-year period with a maturity date of August 1, 2011,
  secured by certain real property and personally
  guaranteed by a stockholder of Liberty...................    2,388,246     2,463,975

Mortgage note payable to a bank for term financing of real
  property, with monthly payments of $16,612, including
  interest at 30-day LIBOR plus 2.50% (currently 3.67%),
  amortized over a 20-year period with a maturity date of
  March 30, 2009, secured by certain real property and
  personally guaranteed by a stockholder of Liberty, as
  amended in February 2003. On April 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...............................................    1,791,699     1,914,744

Mortgage note payable to a bank for term financing of real
  property, with monthly payments of $22,587, including
  interest at U.S. Treasury Constant Maturity Series plus
  2.75%, with a floor of 5.50% and a ceiling of 15.00%
  (currently 5.50%), amortized over a twenty-year period
  with a maturity date of March 25, 2013, secured by
  certain real property and personally guaranteed by a
  stockholder of Liberty...................................    3,433,967     3,514,822
</Table>

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

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

<Table>
<Caption>
                                                                2003          2002
                                                             -----------   -----------
<S>                                                          <C>           <C>

Mortgage note payable to a bank for term financing of real
  property, payable in monthly installments of $10,542,
  including interest at prime rate plus 0.50% (currently
  4.50%), amortized over a 22-year period with a maturity
  date of February 1, 2007, secured by certain real
  property and personally guaranteed by a stockholder of
  Liberty..................................................  $ 1,665,476   $ 1,713,959

Mortgage note payable to a bank for term financing of real
  property, at 30-day LIBOR plus 2.25% (currently 3.42%),
  amortized over a 20-year period with a maturity date of
  April 1, 2006, secured by certain real property and
  personally guaranteed by a stockholder of Liberty........    3,169,731     3,250,974
                                                             -----------   -----------
                                                             $26,459,690   $26,876,352
  Less Current Maturities..................................      983,347       955,848
                                                             -----------   -----------
                                                             $25,476,343   $25,920,504
                                                             ===========   ===========
</Table>

     Future maturities of debt, inclusive of related party notes payable
discussed further in Note 4, are as follows:

<Table>
<S>                                                       <C>
2004...................................................   $   983,347
2005...................................................     3,717,491
2006...................................................    12,998,183
2007...................................................     1,950,522
2008...................................................       472,603
Thereafter.............................................     7,637,544
                                                          -----------
                                                          $27,759,690
                                                          ===========
</Table>

     Liberty entered into an interest rate swap agreement in connection with the
Southold facility mortgage note. This interest rate swap transaction, which had
an original notional amount of $1,650,000 (notional amount of $1,586,365 at
December 31, 2003) 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, 2003, the
fixed rate exceeded the 30-day LIBOR by 4.27%. In the second quarter of 2003,
Liberty entered into an interest rate swap agreement in connection with mortgage
notes which had an original notional amount of $10,598,000 (notional amount of
$10,418,000 at December 31, 2003). The swap expires concurrently with the
mortgage notes on June 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 fixed rate exceeds the 30-day LIBOR rate by 0.78%.
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, 2003 and 2002, Liberty paid $1,491,000
and $2,007,000 of interest on its debt instruments.

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

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

4.  NOTES PAYABLE TO RELATED PARTY:

     Liberty has an unsecured note payable to its Chairman and Chief Executive
Officer in the amount of $1,300,000 at December 31, 2003 and 2002. The note
bears interest at 4.00% and requires monthly interest payments of $4,333 with
the principal due in full on October 30, 2005. Liberty had an unsecured demand
note payable to its Chairman and Chief Executive Officer in the amount of
$500,000 at December 31, 2002. The note was retired in February 2003 with the
proceeds from a new long-term borrowing.

5.  EARNINGS PER SHARE:

     Basic loss per share of common stock for 2003 and 2002 is determined by
dividing net 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 2003 and 2002. Liberty had no dilutive securities outstanding
during 2003 and 2002.

     At December 31, 2003 and 2002, options to purchase 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, 2003 and 2002, Liberty paid no cash
distributions to its shareholders.

6.  INCOME TAXES:

     Liberty has previously elected to be taxed as a REIT pursuant to Section
856 (c) (1) of the Internal Revenue Code of 1986, as amended (the "Code"), and
intends to be taxed as a REIT under the Code for the fiscal year ending December
31, 2003. The REIT provisions of the Code generally allow a REIT to deduct
dividends paid to shareholders in computing the Company's taxable income. In
addition, Liberty has net operating loss carry-forwards for future years of
approximately $5,271,000. 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 shareholders (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 requalified
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 requalification and
to make distributions equal to any earnings accumulated during the period of
non-REIT status.

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

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

7.  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.
For the years ended December 31, 2003 and 2002, Liberty owed Liberty Self-Stor
II, Ltd. $264,992 and $178,664, respectively, associated with these
transactions, as well as with cash advances between the companies, which are
included in accounts payable to related parties in the accompanying consolidated
balance sheet.

     Additionally, Liberty has $10,276, net included in related party payables.
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.

     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 is $4,000 per month. The lease has a five-year term which
expires in December 2004, with a five-year renewal option at $5,000 per month.
For the years ended December 31, 2003 and 2002, $48,000 of this related party
expense is included in general and administrative expenses.

     OsAir, Inc., a company owned by Mr. Osborne as described in the previous
paragraph, 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, 2003 and 2002, OsAir owed Liberty $32,729
and $16,500, respectively, associated with these transactions.

     At December 31, 2003, Liberty is due $50,019 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 as of
December 31, 2003.

     Interest expense on related party notes payable was $54,338 and $70,422 in
2003 and 2002.

     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.

     At December 31, 2002, Liberty had cash of $139,928 at Great Lakes Bank, a
financial institution which at the time was partially owned and could have been
deemed controlled by Mr. Osborne. In late 2003, Great Lakes Bank was merged out
of existence and is no longer controlled by Mr. Osborne. Pursuant to a
requirement of a commercial loan associated with Liberty's Avon self-storage
facility, Liberty also maintained a minimum account balance at Great Lakes Bank.

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

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                           DECEMBER 31, 2003 AND 2002

8.  COMMITMENTS AND CONTINGENCIES:

     The ownership of real estate entails environmental risks and potential
liability to owners, including former owners. Environmental investigation at the
Golden Cove property sold to Meridian Industrial Trust ("MIT") in 1997 indicated
that soil at the property contained volatile organic compounds in concentrations
that exceeded the clean-up goals typically cited by the California Regional
Water Quality Control Board (the "RWQCB"). As part of the sale transaction,
Meridian (Liberty's predecessor) was obligated to fully fund the remediation
costs, for which it had previously accrued $140,000 in 1994. Approximately
$95,000 had been expended for remediation costs through December 31, 2002, and
Liberty does not believe that any additional costs will be incurred. However,
there can be no assurance to that effect. Liberty, as successor to Meridian, may
be entitled to seek contribution and indemnity for the remediation costs against
other potentially responsible parties who may have caused the contamination at
the property.

     In the late 1980's, the San Francisco Bay Region of the RWQCB requested
that Meridian investigate and characterize soil and groundwater contamination at
the Charleston property which was sold by Meridian in August 1997. Meridian
engaged an environmental engineering firm that discovered the presence of
trichloroethlylene and other solvent chemicals in the groundwater. The RWQCB
deferred issuing a Site Cleanup Requirements ("SCRs") order to give Meridian
time to complete the pending sale of the property. As part of the sale, the
purchaser agreed to indemnify Meridian broadly against the pending SCRs and
other types of environmental claims. The indemnity is backed by an environmental
insurance policy placed with Reliance Insurance Company of Illinois. Based on
information received by Liberty from the RWQCB, Liberty believes that this
matter is now closed. Liberty does not believe that it will incur any costs
associated with this property, nor have any further liability. However there can
be no assurance to that effect.

     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.

9.  SUBSEQUENT EVENT:

     In February 2004, Liberty purchased 5.77 acres of land adjacent to its
existing site in Ravenna, Ohio. The cost of the property was approximately
$100,000 which was funded from operations. Plans include building 150 storage
units, a manager office and apartment unit on the acquired site in 2004.

     Also, Liberty purchased a new storage facility in Gahanna, Ohio. The
facility has 258 units totaling 30,525 square feet. Liberty funded the purchase
price with bank borrowings of $787,500 and a related party borrowing from Mr.
Osborne of $250,000. The mortgage note payable to the bank provides for monthly
payments of principal and interest of $5,859 with a balloon payment of $582,968
due upon maturity on March 1, 2009. The loan has a variable rate of interest
using Prime as the index (currently 4%). The related party borrowing also bears
interest at 4% per year.

                                        32