UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                            ------------------------
                                    FORM 10-K
               (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended: December 31, 2002

                                       OR
            ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                         COMMISSION FILE NUMBER 1-10173

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

                           LIFE SCIENCES RESEARCH INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                                    MARYLAND
                 (JURISDICTION OF INCORPORATION OR ORGANIZATION)

            PO BOX 2360, METTLERS ROAD, EAST MILLSTONE, NJ 08875-2360
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 732 649-9961
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

-----------------------------       --------------------------------------------
  TITLE OF EACH CLASS                        NAME OF EACH EXCHANGE ON WHICH
                                                   REGISTERED
Voting Common Stock $0.01 par value                   OTCBB


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or Section  15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such report),  and (2) has been subject to such
filing requirements for the past 90 days.

                 Yes X                     No __

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment of this Form 10-K. [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12-b-2 of the Act)

                  Yes _                     No X


The aggregate market value of the Voting Common Stock held by  non-affiliates of
the Registrant at March 18, 2003 was  approximately  $20,104,399  based on a per
share price of $2.20, the closing market price of the Voting Common Stock on the
OTCBB.

Indicate the number of outstanding shares of each of the Registrant's classes of
common stock as of the latest practicable date.

        11,932,338 Voting Common Stock of $0.01 each as at March 18, 2003


<PAGE>

<TABLE>
TABLE OF CONTENTS
<CAPTION>

ITEM                                                                                               PAGE
<S>     <C>                                                                                        <C>

                                     PART I

1.       Business ........................................................................           3

2.       Properties ......................................................................          11

3.       Legal Proceedings ...............................................................          11

4.       Submission of Matters to a Vote of Security Holders..............................          11

                                     PART II

5.       Market For Registrant's Common Equity and Related Stockholder Matters............          12

6.       Selected Financial Data .........................................................          16

7.       Management's Discussion and Analysis of Financial Condition and Results
         of Operations ...................................................................          17

7A.      Quantitative and Qualitative Disclosures About Market Risk.......................          28

8.       Financial Statements and Supplementary Data .....................................          29

9.       Changes in and disagreements with Accountants on Accounting and Financial
         Disclosure ......................................................................          52

                                    PART III

10.      Directors and Executive Officers of the Registrant...............................          53

11.      Executive Compensation ..........................................................          54

12.      Security Ownership of Certain Beneficial Owners and Management...................          58

13.      Certain Relationships and Related Transactions ..................................          59

14.      Controls and Procedures .........................................................          60

                                     PART IV

15.      Exhibits, Financial Statements, Schedules and Reports on Form 8-K................          61

</TABLE>

<PAGE>


PART I

ITEM 1.  BUSINESS

INTRODUCTION

Life  Sciences  Research,  Inc.  ("LSR")  and  subsidiaries  (collectively,  the
"Company")  is a  global  Contract  Research  Organization,  offering  worldwide
pre-clinical and non-clinical  testing for biological safety evaluation research
services to pharmaceutical,  biotechnology, agrochemical and industrial chemical
companies.  The Company  serves the rapidly  evolving  regulatory and commercial
requirements to perform safety evaluations on new  pharmaceutical  compounds and
chemical  compounds  contained  within the products that man uses,  eats, and is
otherwise exposed to. In addition,  it tests the effect of such compounds on the
environment  and also  performs  work on  assessing  the safety and  efficacy of
veterinary products.

As the Company continues to build on improving fundamentals, the Company has the
following strategy and goals:

o    To grow to significant  profitability and improved return on investment for
     our shareholders.
o    To be appreciated as the listening,  understanding  and reliable partner in
     creative compound development and safety assessment; to be the first choice
     for the industries we serve.
o    To provide our employees with the opportunity for individual development in
     a  caring,  rewarding  and safe  working  environment.
o    To be recognized positively in the local communities in which we operate.

LSR was incorporated on July 19, 2001 as a Maryland  corporation.  It was formed
specifically  for the  purpose  of making a  recommended  all share  offer  (the
"Offer") for Huntingdon  Life Sciences Group plc  ("Huntingdon").  The Offer was
made on October 16, 2001 and was declared  unconditional on January 10, 2002, at
which time LSR acquired  approximately 89% of the outstanding ordinary shares of
Huntingdon in exchange for approximately 5.3 million shares of LSR Voting Common
Stock.  The  subsequent  offer period expired on February 7, 2002, by which time
approximately  92% of the  outstanding  ordinary  shares  had been  offered  for
exchange.  LSR completed its  compulsory  purchase under UK law of the remaining
outstanding  ordinary  shares  of  Huntingdon  on March 26,  2002 at which  time
Huntingdon  became a wholly owned  subsidiary of LSR, in exchange for a total of
approximately  5.9  million  shares of LSR Voting  Common  Stock (the  "Exchange
Offer").

Under accounting principles generally accepted in the United States ("US GAAP"),
the  Company  whose  stockholders  retain the  majority  interest  in a combined
business must be treated as the acquirer for accounting  purposes.  Accordingly,
the  Exchange  Offer is accounted  for as a reverse  acquisition  for  financial
reporting purposes.  The reverse acquisition is deemed a capital transaction and
the net assets of Huntingdon  (the  accounting  acquirer) are carried forward to
LSR (the legal acquirer and the reporting entity) at their carrying value before
the combination.  Although Huntingdon was deemed to be the acquiring corporation
for financial accounting and reporting purposes,  the legal status of LSR as the
surviving corporation does not change. The relevant acquisition process utilizes
the capital  structure of LSR and the assets and  liabilities  of Huntingdon are
recorded  at  historical  cost.  The equity of LSR is the  historical  equity of
Huntingdon, retroactively restated to reflect the number of shares issued in the
Exchange Offer.

LSR's executive office is based at the Princeton  Research Center in New Jersey,
US.

<PAGE>


HISTORY

Huntingdon was originally  incorporated in the UK in 1951 as a limited liability
company  to  provide  contract  research  services  to  the  UK  pharmaceutical,
agrochemical  and food  industries.  In 1964 it was  acquired by the US company,
Becton Dickinson. Over the next 20 years it successfully established itself as a
leading  CRO with  business  across a number  of  sectors  and with a number  of
leading pharmaceutical and agrochemical companies. In April 1983, Huntingdon was
re-registered  as a public  limited  company  and in 1988 it was  floated on the
London Stock Exchange. In early 1989 Huntingdon obtained a listing for its ADR's
on the New York Stock Exchange.

In  1995,  it  acquired  the  toxicology   business  of  APBI,   which  included
laboratories near Princeton, New Jersey and Newcastle and Eye, Suffolk in the UK
for a total  consideration  of $43 million.  Immediately upon  acquisition,  the
toxicology  business  of  APBI in the UK was  merged  with  that  of  Huntingdon
Research  Center Limited and the name of that company changed to Huntingdon Life
Sciences Limited.  The US business acquired operates as Huntingdon Life Sciences
Inc.

In the first half of 1997 allegations were made relating to animal care and Good
Laboratory Practice (GLP) against Huntingdon's  operating subsidiaries in the UK
and US. Those  allegations and the UK Government's  subsequent  statement in the
House of  Commons in July 1997 about its  investigation  into those  allegations
caused  the  cancellation  of  booked  orders  and  a  decline  in  new  orders.
Significant trading losses and cash outflows resulted during the period from mid
1997 through 1998. Given the medium to long term element of many of Huntingdon's
activities  and the  reluctance of clients to place new work until it's finances
were stabilized,  Huntingdon required a substantial injection of finance to both
initially restore confidence and then to fund operations during the period until
it returned to profitability.

On September 2, 1998 a group of new investors  subscribed (pound)15 million ($25
million)  for 120  million  ordinary  shares  while  existing  shareholders  and
institutional  investors  took up a  further  57  million  shares,  contributing
(pound)7.1  million ($11.8 million).  After expenses of (pound)1.7 million ($2.9
million), the issue of shares raised (pound)20.4 million ($33.9 million). On the
same date  Huntingdon's  bankers  agreed to confirm  Huntingdon's  facilities at
(pound)24.5  ($40.8  million)  million until August 31, 2000 and this amount was
fully drawn  down.  This debt was  refinanced  on January 20, 2001 by means of a
loan from HLSF LLC, a subsidiary  company of the Stephens  Group Inc., a related
party at the time,  which has since  transferred  the debt to an unrelated third
party. It is now repayable on June 30, 2006.

Since the  involvement of the new investor  group in 1998, the management  team,
led by Brian Cass,  believes  that LSR has  successfully  addressed  many of the
Company's past difficulties. Relationships with customers have been restored and
sales are growing at an encouraging rate.

In  November  1999,  a new so  called  "animal  rights"  group  known  as  "Stop
Huntingdon  Animal  Cruelty"  (SHAC) was formed in the UK with Huntingdon as its
target.  Since then, the activists have  continued  focusing on Huntingdon  (now
LSR), its staff and directors, but also many other stakeholders in the business,
including shareholders,  financial institutions,  other suppliers and customers.
For further  details see Other  Information  Pertaining  to the Company - Animal
Rights Activism, below.

In October 2001, LSR commenced the Offer for Huntingdon,  which was completed in
March 2002 with Huntingdon becoming a wholly owned subsidiary of LSR. The effect
of the Offer was to  effectively  re-domicile  Huntingdon's  corporate and legal
existence to the US. As a US and  Maryland  company,  LSR  benefits  from a more
hospitable  corporate  environment,  including corporate  governance and privacy
rules  and  regulations  that  benefit  LSR  security  holders.   Moreover,  the
investment  community in the US is more familiar  with the CRO  industry,  since
most publicly traded CRO's are domiciled in the US. Additionally,  the companies
responsible  for  developing  new  pharmaceutical,  agrochemical  and industrial
compounds  are  increasingly  concentrated  in the US and as a result,  LSR's US
operations have enjoyed substantial growth in the last few years.

In March 2002, LSR completed a private  placement of  approximately  5.1 million
shares of Voting  Common  Stock at a per share  subscription  price of $1.50 per
share.

In June 2002,  LSR began  trading  its common  stock on the US Over the  Counter
Bulletin Board (OTCBB).

DESCRIPTION OF BUSINESS

LSR provides pre-clinical and non-clinical biological safety evaluation research
services  to  most  of  the  world's  leading   pharmaceutical,   biotechnology,
agrochemical  and  industrial  chemical  companies.  The  purpose of this safety
evaluation is to identify risks to humans,  animals or the environment resulting
from the use or  manufacture  of a wide range of chemicals,  which are essential
components  of our clients'  products.  LSR's  services are designed to meet the
regulatory requirements of governments around the world.

The Company's aim is to develop its business  within these markets,  principally
through organic growth. In doing so, LSR will benefit from strong drug pipelines
in the pharmaceutical  industry,  a growing trend towards outsourcing as clients
focus more internal  resources on research in the search for new compounds,  and
the growing amount of legislation concerning the safety and environmental impact
of agrochemicals and industrial chemicals.

The Company's sales and marketing functions are specifically focused on two main
groups, pharmaceutical and non-pharmaceutical customers. As much of the research
activity conducted for these two customer groups is similar,  LSR believes it is
appropriate, operationally, to view this as one business.

Pharmaceuticals and Biopharmaceuticals

The Pharmaceutical research and development pathway is shown below:
<TABLE>
<CAPTION>

----------------------------- ---------------------------------------------------------------------- ----------------
       DRUG DISCOVERY                                   DRUG DEVELOPMENT                                MARKETING
----------------------------- ---------------------------------------------------------------------- ----------------
   <S>                       <C>                   <C>  <C>           <C>             <C>           <C>
                              NON-CLINICAL                             CLINICAL
                                  Pre-Clinical
                              Toxicology
                              Pharmacology
                              Drug Metabolism
                              Pharmacokinetics
     Chemical Synthesis                                  Phase I          Phase II      Phase III       Phase IV
                                                         Safety           Efficacy      Long Term    Post marketing
                                                                                         efficacy     surveillance
                                                    ------------------ --------------- -------------
                                                    LONG TERM SAFETY STUDIES

                              ----------------------------------------------------------------------
</TABLE>

LSR performs  non-clinical  testing in support of the drug development  process.
This primarily  consists of  pre-clinical  outsourcing  from the  pharmaceutical
industry,  as well as further  longer term  non-clinical  safety testing that is
performed in parallel to human clinical testing (such as carcinogenicity studies
and safety studies  relating to reproductive  implications).  Essentially all of
this work is  performed  as a result  of  regulatory  requirements  that seek to
minimize  the  risks  associated  with  the  ultimate  testing  and use of these
compounds in humans.  Pre-clinical  testing includes studies  conducted prior to
the  compound  exposure  to  humans.  This helps to  evaluate  both how the drug
affects the body as well as how the body  affects the drug.  Utilizing  advanced
laboratory  and  toxicological  evaluations,  this work  helps  assess  safe and
appropriate  dose regimens.  Non-clinical  testing,  which includes  longer term
studies often conducted concurrently with clinical (human) testing, can focus on
identifying and avoiding the longer term cancer  implications of exposure to the
compound,  or relating to the potential of possible  reproductive  implications.
Approximately  two  thirds  of  the  Company's  orders  are  derived  from  this
pharmaceutical sector. The Company views its non-clinical market as extending to
"proof of concept"  in man (Phase 2A) and to  analytical  chemistry  support for
clinical  trials.  Since 1999, LSR has had  collaborative  relationships  with a
number  of  Phase  I  clinical  trial  units  and  offers  centralized  clinical
laboratory services in support of clinical trials.

LSR has also actively pursued  opportunities to extend its range of capabilities
supporting late stage drug  discovery,  focused around invitro and invivo models
for lead candidate drug characterization and optimization. This growing range of
biological services is intended to position the Company to take advantage of the
knowledge  arising from the Human Genome  Project as the  identification  of new
molecular  disease  targets is expected to lead to the  development of increased
numbers of potential therapies which will require evaluation.

The outsourced market for the late stage clinical trials (Phase 3 and beyond) is
relevant  to LSR,  but the margins  are less  attractive  and it is subject to a
greater degree of volatility driven by the size of individual  contracts.  While
LSR does not preclude  entering this market in the future,  it has no plan to do
so in the  foreseeable  future,  as it is a very  different  business and one in
which a number of major companies are already firmly established.
Market Growth

It is estimated that the pharmaceutical industry annual research and development
(R & D)  spending is over $30 billion per year and is growing at around 6-8% per
annum.  Approximately  one  quarter  of this is devoted  solely to  pre-clinical
testing.  The Company believes that  approximately  20-25% of this is outsourced
which means that the Company is today  competing in a market which  exceeds $1.3
billion.  It is widely believed that the percent, as well as the absolute dollar
that is outsourced should continue to grow.

The market  for these  services  is  growing,  among  other  things,  due to the
following:

o    The  Company  estimates  that new drug  discovery  is growing at 10-15% per
     annum,  fueled by new  technologies  and strong profits.  Use of techniques
     like combinatorial chemistry and high throughput screening are dramatically
     increasing the efficiency and  effectiveness  of the discovery  process for
     new molecules.

o    Preclinical development services should experience the higher growth first,
     as they are at the front end to receive  the  anticipated  wave of new drug
     candidates generated by advances in drug discovery technologies.

o    The need to  replace  earnings  from  drugs  coming  off  patent is driving
     increases in the number of drugs being put into development.

o    It is estimated there has been a 50% increase in the numbers of projects in
     the R & D pipeline versus five years ago.

o    There is also a growing trend towards the  outsourcing of development  work
     as clients focus more internal resource on discovery research in the search
     for new lead compounds.

o    The biotechnology  industry has become a significant source of business for
     the Company.  The number of drugs produced by the  biotechnology  industry,
     which  require US Food and Drug  Administration  (FDA)  approval  has grown
     substantially  over the past  decade.  Many  biotechnology  companies  have
     strategically  chosen  not to invest  in asset  intensive  development  and
     regulatory safety evaluation,  but rather to outsource major areas of R & D
     and utilize contract research organizations to perform these services. This
     frees them from the inefficient utilization of in-house capabilities due to
     their sporadic and varied demand for these capabilities.

o    The process of  consolidation  within the  pharmaceutical  industry is also
     accelerating  the move  towards  outsourcing.  While there is a  short-term
     negative impact from mergers with development  pipelines being rationalized
     and a focus on integration rather than development,  longer-term  resources
     are  increasingly  invested in in-house  facilities  for discovery and lead
     optimization rather than development and regulatory safety evaluation.  The
     outsourcing  of  development  and safety  evaluation is the Company's  core
     business.

As a result of these,  amongst  other  factors,  it is believed that the overall
market for  outsourced  services is estimated to be growing at an annual rate of
in the range of 10-15%.

Non-Pharmaceuticals

LSR has  historically  generated one third or more of its orders from safety and
efficacy  testing  of  compounds  for  the  agrochemical,  industrial  chemical,
veterinary  and food  industries.  The work involved has many  similarities  and
often uses many of the same facilities, equipment, and scientific disciplines to
those employed in pre-clinical testing of pharmaceutical compounds.

LSR's  business  in these  areas  is again  driven  by  governmental  regulatory
requirements.  The Company's  services  address  safety  concerns  surrounding a
diverse range of products,  spanning such areas as  agricultural  herbicides and
other pesticides, medical devices, veterinary medicines, and specialty chemicals
used  in the  manufacture  of  pharmaceutical  intermediates,  and  manufactured
foodstuffs  and  products.  The Company  believes it is a clear market leader in
programs  designed to assess the safety,  environmental  impact and  efficacy of
agricultural chemicals as well as in programs to take new specialty chemicals to
market.

Market Growth

It is estimated that the worldwide market for outsourced  contract research from
non-pharmaceutical  industries  is  around  $300  million.  The  growth  in  the
non-pharmaceutical  business  is  driven  both  by  the  introduction  of  novel
compounds  and   increasingly   by   legislation   concerning   the  safety  and
environmental impact of existing products.

The Company  believes that many market  segments  included in this broad area of
business have the potential for substantial  growth in coming years,  due to the
following:

o    Recent  introduction  of new  testing  requirements  for  `high  production
     volume' (HPV) chemical  products in the US, and similar  programs in Europe
     and Japan.

o    Increasing  scrutiny of any compound,  which is used in the  manufacture of
     products to which members of the public,  especially  children are exposed,
     either  infrequently or on a day-to-day basis (e.g.  phthalates used in the
     plastic of children's toys).

o    More stringent regulations affecting compounds, which have the potential to
     adversely, effect the environment, e.g. biocides and endocrine disrupters.

o    Growth in  concerns  over  food  safety,  e.g.  additives  and  genetically
     modified foods, and the introduction of `nutraceuticals'.

o    The  requirement to register or re-register  pesticides on lists 2 and 3 to
     meet  the  European  Directive  91/414/EEC.   The  Company  has  unrivalled
     experience  with  the  chemicals  which  were  included  on  list  1 of the
     Directive.

Safety  testing in these  industries  is also more likely to be  outsourced  as,
unlike the pharmaceutical  industry, fewer companies have comprehensive internal
laboratory  facilities.  While overall R & D is growing at approximately  3%, we
believe that this coupled with increased outsourcing could provide market growth
of up to 5% per annum over the next five years.

COMPETITION

Competition in both the  pharmaceutical and  non-pharmaceutical  market segments
ranges from the in-house R&D divisions of large pharmaceutical, agrochemical and
industrial chemical companies who perform their own safety assessments, to "full
service"  providers - contract  research  organizations  like LSR, who provide a
full  range of  services  to the  industries  (such as Covance  Inc.,  Inveresk,
Quintiles Transnational Corp., Charles River Laboratories  International,  Inc.)
and "niche"  suppliers  focussing on specific  services or  industries  (such as
Bioreliance Corporation).

GOVERNMENT REGULATION OF OPERATIONS

Regulatory agencies

Since  the  services  provided  by  LSR  are  used  to  support  pharmaceutical,
biotechnological,  chemical or agrochemical product approval  applications,  its
laboratories are subject to both formal and informal  inspections by appropriate
regulatory  and  supervisory  authorities,  as well as by  representatives  from
client  companies.  The  Company  is  regularly  inspected  by US,  Japan and UK
governmental  agencies  because of the number and complexities of the studies it
undertakes.  In 1979, the US Food and Drug Administration  (FDA) promulgated the
Good Laboratory  Practice (GLP) regulations,  defining the standards under which
biological safety evaluations are to be conducted.  Other governmental  agencies
such as the  Environmental  Protection  Agency (EPA),  the Japanese  Ministry Of
Health  and  Welfare,  the  Japanese  Ministry  of  Agriculture,   Forestry  and
Fisheries,    and   the   UK    Department    of   Health,    have    introduced
compliance-monitoring  programs  with similar GLP  standards.  During 2002,  the
Company had two inspections in the UK and one inspection in the US, and overall,
35 such inspection visits and audits since 1985.

LSR's  laboratory  in the US is  subject  to the  United  States  Department  of
Agriculture  (USDA)  Animal  Welfare  Regulations  (Title  9,  Code  of  Federal
Regulations,  Subchapter  A). The  laboratory  is  regularly  inspected  by USDA
officials for compliance with these  regulations.  Compliance is assured through
an  Institutional  Animal Care and Use Committee,  comprising staff from a broad
range of disciplines within the Company and including  external  representation.
Furthermore,  in the US there is a  voluntary  certification  program  run by an
independent and  internationally  recognized  organization,  the Association for
Assessment and Accreditation of Laboratory  Animal Care (AAALAC).  The Company's
laboratory  in the US is  accredited  under  this  program.  LSR's  pre-clinical
services  are subject to  industry  standards  for the  conduct of research  and
development  studies that are embodied in the  regulations  for GLP. The FDA and
other  regulatory  authorities  require  the  test  results  submitted  to  such
authorities  be based on studies  conducted in accordance  with GLP. The Company
must also maintain reports for each study for specified  periods for auditing by
the study sponsor and by FDA or limited regulatory authorities.

LSR's operations in the UK are regulated by the Animals (Scientific  Procedures)
Act 1986. This legislation, administered by the UK Home Office, provides for the
control of scientific  procedures carried out on animals and regulation of their
environment. Personal licenses (the Company has approximately 250 licensees) are
issued by the UK Home Office to personnel who are competent to perform regulated
procedures  and each program of work must be  authorized in advance by a Project
Licensee.  Premises  where  procedures  are  carried  out must also be  formally
designated by the UK Home Office.  Consultations  and  inspections are regularly
undertaken  in  order  to  ensure  continued   compliance  with  regulatory  and
legislative  requirements.  Typically,  the  Company  has  20  such  inspections
annually.

At each of its  research  centers,  the  Company  ensures  the  availability  of
suitably experienced and qualified veterinary staff backed by a 24-hour call out
system.

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

While the Company  conducts its  business to comply with  certain  environmental
regulations,  compliance with such regulations does not impact  significantly on
its earnings or competitive  position.  Management  believes that its operations
are  currently  in  material   compliance  with  all  applicable   environmental
regulations.

OTHER INFORMATION PERTAINING TO THE COMPANY

Human Resources

LSR's most  important  resource is its people,  they have created the  Company's
knowledge  base,  its  expertise  and  its  excellent   scientific   reputation.
Scientists from the Company are represented at the highest levels in several US,
UK and international  committees on safety and toxicity  testing.  Several staff
members are  considered  leaders in their  respective  fields.  They  frequently
lecture at  scientific  seminars and  regularly  publish  articles in scientific
journals. This recognition has resulted in frequent assignments from clients for
consultation  services.  Some of the  Company's  staff  serve by  invitation  or
election on a number of scientific and industrial  advisory panels and groups of
certain  organizations  and agencies such as the FDA, the EPA, the UK Department
of Health, and the World Health Organization.

To ensure that this  experience  and  expertise is  transmitted  throughout  the
organization, the Company conducts training programs. For example, the Company's
Introductory and Advanced Graduate Training Programs train graduate staff in all
phases  of  toxicology.  Also,  in  conjunction  with the  Institute  of  Animal
Technology,  the  Company  maintains  what it  believes to be one of the largest
animal   technician   training  programs  in  the  world.  The  Company  employs
approximately 250 licensed personnel.

The number of  employees  in the Company at  December  31, 2002 and 2001 were as
follows:

                                           2002                2001
US ..............................           224                 216
UK...............................         1,205               1,161
Japan............................            10                  10
                                     -----------         -----------
                                          1,439               1,387
                                     -----------         -----------

Management and Labor Relations

The Company's  labor force is non-union and there has never been any  disruption
of the business through strikes or other employee action.  The Company regularly
reviews its pay and benefits  packages and  believes  that its labor  relations,
policies and practices and management  structure are  appropriate to support its
competitive position.

Research and Development

In addition to  experience  gained  through  research  activities  performed for
clients,  the Company  engages in  research in order to respond to the  changing
needs of clients and to maintain  competitiveness within the industries in which
it operates.  Most of the research  undertaken,  however, is an inherent part of
the research carried out on behalf of clients in completing  studies and as such
it is not identified separately.

Know-how and Patents

The Company  believes that its  proprietary  know-how plays an important role in
the success of its business.  Where the Company considers it appropriate,  steps
are  taken to  protect  its  know-how  through  confidentiality  agreements  and
protection  through  registration  of title or use.  However  the Company has no
patents, trademarks, licenses, franchises or concessions, which are material and
upon which any of the services offered is dependent.

Quality Assurance

The Company maintains extensive quality assurance  programs,  designed to ensure
that all testing  programs  meet client  requirements,  as well as all  relevant
codes,  standards  and  regulations.   Based  on  a  Master  Schedule,  periodic
inspections are conducted as testing  programs are performed to assure adherence
to  project  specifications  or  protocols  and final  reports  are  extensively
inspected to ensure consistency with data collected.

Animal Rights Activism

In  parallel   with  an  increase  in  so  called   "animal   rights"   activity
internationally  targeting  organizations  in the  CRO,  academic,  and  medical
research  community,  a new campaign  group (Stop  Huntingdon  Animal Cruelty or
SHAC) was formed in the UK during  November 1999 with  Huntingdon as its target.
SHAC's broad aim is to end all animal research, while its immediate and publicly
stated goal at that time was to "shut HLS down within three years". During 2000,
this  campaign  intensified  with  any  stakeholder  in  Huntingdon  becoming  a
potential  target;  this included staff,  directors,  institutional and personal
shareholders,   customers,  financial  institutions  and  other  suppliers.  The
protests  took  many  forms,  including  demonstrations  outside  the  Company's
facilities and in local towns;  distribution of propaganda;  abuse, intimidation
and threats directed at many of the stakeholders listed above; and in some cases
violence.  The worst acts of violence  have been targeted at members of staff of
the Company.  These have taken the form of nighttime arson attacks on employees'
cars outside  their homes and physical  attacks on two of the  Company's  senior
managers as they returned home from work.

During  2001 and 2002 the  incidents  of violent  protest in the UK  appeared to
partly diminish. However, activists increased the focus of protest activities on
the  Company's  financial  institutions,  in  unsuccessful  attempts  to deprive
Huntingdon of its bank financing and to defeat the re-domiciling  transaction to
the US.  During  the  same  period,  in  large  part  due to the  successful  US
re-domiciling, animal rights activities of SHAC and the other groups expanded to
the US, with a focus on the Company's  stakeholders and suspected  stakeholders,
market makers and senior staff and directors.

To counter this "animal rights" campaign, LSR has adopted a strategy of openness
and  direct  cooperation  with all its  stakeholders,  the  media  and the local
communities. The Company has taken every opportunity to promote the value of the
work it does in  helping  its  customers  bring to  market  safe  and  effective
products.  Members of the media, schools,  local groups and national bodies have
visited the Company's facilities, toured the animal facilities and laboratories,
and talked with staff. These visitors have been consistently  impressed with the
Company's  ethics,  standards of animal welfare and the  professionalism  of its
staff.  As  a  consequence  of  the  Company's  high  profile  public  relations
activities and the  irrationality  of the "animal  rights"  messages,  the media
coverage  has  become  increasingly  positive  throughout  the  duration  of the
campaign,  particularly in the US where the media coverage, when it even exists,
has consistently condemned the actions of the SHAC campaign.

As a result of and in conjunction  with the Company's  leadership on this issue,
there has been a marked  increase  in  communication  campaigns  to educate  the
general population about the invaluable  benefits of animal based research,  the
commitment to and progress in development of non-animal based alternatives,  and
the high  standard  of  animal  welfare  in which  this work is  conducted.  Our
clients'   recognition  for  our  scientific  and  professional   integrity  and
leadership  was evident in the  granting in October 2001 of the  prestigious  UK
Pharma  Industry  Individual  Achievement  Award to Brian  Cass,  the  Company's
President and Managing  Director.  In June 2002, in further  recognition  of his
contribution to science and professional achievements, Mr. Cass was appointed as
a Commander in the Most Excellent Order of the British Empire (CBE).  The highly
prestigious  CBE is awarded on merit,  for  exceptional  achievement or service;
they are  recommended  by the Prime Minister of England but decided by the Queen
of England.

In the UK the  Company  has  successfully  lobbied  politicians  and the British
parliament,   with  great  support  from  industry  trade  bodies  such  as  the
Association of the British  Pharmaceutical  Industry,  Bioindustry  Association,
Chemical  Industry  Association and Research Defence Society.  As a result,  the
British  Government has made very positive  statements in support of the Company
and has been  extremely  critical of the illegal  acts of some  "animal  rights"
supporters.  The Government has introduced  legislation to offer more protection
to those targeted and is encouraging  the police and courts to ensure the law is
enforced.  This national  initiative  continues to develop,  particularly as the
government  and  police  deal  with  protecting  other  animal  rights  targets,
including academic institutions, in England.

Although the animal rights movement is more recent and undeveloped in the US and
appears to enjoy less public  support than in the UK, the Company is  addressing
it  proactively  with actions  similar to those it has utilized in the UK. These
steps  include a strategy of openness  and media  cooperation;  legislative  and
regulatory  lobbying in association with industry trade bodies such as Americans
for Medical  Progress,  National  Association  for  Biomedical  Research and the
Foundation  for  Biomedical   Research;   and  legal  actions   including  close
cooperation  with  law  enforcement  authorities  at all  levels.  For  example,
following  incidents  of vandalism at or  following  home  protests  against the
Company's US employees,  the Company  obtained orders of the New Jersey Superior
Court and the New York Supreme Court,  placing  restrictions on home protests by
animal  rights  activists  as well as  limits on the  scope of  protests  at the
Company's Princeton Research Center. In recent months, criminal indictments have
been brought  against SHAC  extremists  in New York City and Boston.  In the New
York prosecution,  felony convictions,  including prison terms, have been handed
down.  In  Washington   D.C.,   legislation   was  enacted  in  May  2002  which
significantly  increased the penalties under the Animal Enterprise Terrorism Act
for acts of  vandalism  against  medical  research  and  animal  based  research
facilities.

Management  recognizes  that there has long been,  and  expects  that there will
continue to be,  individuals  with strong views that animals  should not be used
under any  circumstances  for the  betterment of humanity,  including for animal
based research. Regardless of whether there continues to be a direct impact from
this  political  issue on the  Company's  business,  LSR  remains  committed  to
continuing its initiatives to educate the community to the value of animal based
medical  research,  to advancing the important  strides our industry has made in
animal  welfare,  and to supporting with state of the art science and techniques
our  clients'  desire  to  maximize  the  safety of vital  new  compounds  being
developed for the betterment of society.


ITEM 2.  PROPERTIES

The Company's head office is situated  within the Princeton  Research  Center in
New Jersey.

The Company believes that its facilities,  described below, are adequate for its
operations  and that  suitable  additional  space will be  available if and when
needed.

The  following  table  shows the  location  of the  facilities  of the  Company,
approximate size, based on occupancy,  and the principal activities conducted at
such facilities each of which is owned by the Company.

<TABLE>
<CAPTION>
                                    Laboratories
Location                            and Offices       Size         Principal Activities
--------                            -----------       ----         --------------------
<S>                                <C>               <C>          <C>
Princeton Research Center, East     135,000 sq.ft.    53.5 acres   Laboratories, animal accommodation and
Millstone, NJ, US                                                  offices
Huntingdon Research Center,         559,000 sq.ft.    80 acres     Laboratories, animal accommodation and
Huntingdon, England                                                offices
Eye Research Center, Eye, England   257,000 sq.ft.    28 acres     Laboratories, animal accommodation and
                                                                   offices
</TABLE>


ITEM 3.  LEGAL PROCEEDINGS

The Company is party to certain legal  actions  arising out of the normal course
of its  business.  In  management's  opinion,  none of these actions will have a
material effect on the Company's  operations,  financial condition or liquidity.
No  form  of  proceedings  has  been  brought,  instigated  or  is  known  to be
contemplated against the Company by any governmental agency.


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

None


<PAGE>


PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

LSR's Voting Common Stock trades on the Over the Counter  Bulletin Board (OTCBB)
Market under the symbol  "LSRI".  The closing  market price of the Voting Common
Stock on March 18, 2003 was $2.20 per share.

On July 10,  2000 the Company  changed  its ADS ratio from one ADS  representing
five Ordinary Shares to one ADS representing  twenty-five  Ordinary Shares.  The
ratio  change  was  implemented  to ensure  compliance  with the New York  Stock
Exchange's listing  requirement that ADS's trade at a minimum price of $1.00 per
share.

Until January 24, 2002  Huntingdon's  Ordinary  Shares were listed on the London
Stock Exchange Ltd., under the Stock Exchange Automated  Quotation symbol "HTD".
The company completed its re-domiciling  from the UK to the US on March 26, 2002
and commenced trading of LSR common stock on the OTCBB on April 8, 2002.

The  Company's  common  stocks  traded on the OTCBB  and/or the Other OTC Market
(Pink Sheets)  between  January 24, 2002 and July 8, 2002 and on the OTCBB since
July 8, 2002.

The high and low quarterly sales price of LSR's common stock on the OTCBB or the
Other OTC Market as  applicable  from April 8, 2002 to December 31, 2002 were as
follows:

                                  HIGH SALES               LOW SALES
PERIOD AND QUARTER ENDED             PRICE                   PRICE
------------------------        ------------------      -----------------
                                       $                       $
June 30, 2002 (A)                    2.25                    0.50
September 30, 2002                   2.85                    1.80
December 31, 2002                    2.35                    1.40

(A): Until April 8, 2002, no  information is publicly  available for trades, if
     any, that were executed for the LSR stock.

The high and low sales price of Huntingdon  ordinary  shares on the London Stock
Exchange  between January 1, 2002 and January 24, 2002 (when the ordinary shares
ceased trading on the London Stock Exchange) were as follows:

                                            HIGH SALES             LOW SALES
DATE                                           PRICE                 PRICE
----                                    ------------------    -----------------
                                             (pound)               (pound)
January 1, 2002 to January 24, 2002        0.045 ($0.064)       0.0325 ($0.047)

The Company has not paid any cash  dividends in the two most recent fiscal years
and does not expect to declare or pay cash  dividends  on the  Company's  Voting
Common  Stock in the near  future.  The Board of Directors  will  determine  the
extent to which legally available funds will be used to pay dividends. In making
decisions regarding dividends, the Board will exercise its business judgment and
will take into  account  such  matters as results of  operations  and  financial
condition and any then-existing or proposed commitments for the use of available
funds.

See Item 7 for  discussion  of  restrictions  impacting  the export or import of
capital  or that  affect  the  remittance  of  dividends  or other  payments  to
non-resident holders of the Company's equity.

As of March 18, 2003, LSR had 2,039 holders of record of Voting Common Stock.

Warrants to purchase shares of LSR Voting Common Stock

On October 9, 2001, on behalf of  Huntingdon,  LSR issued to Stephens Group Inc.
warrants  to  purchase  up to  704,425  shares of LSR Voting  Common  Stock at a
purchase price of $1.50 per share.  The LSR warrants are exercisable at any time
and will expire on October 9, 2011.  These  warrants  arose out of  negotiations
regarding  the  refinancing  of the  bank  loan  by  the  Stephens  Group  Inc.,
(Stephens'  Loan) in  January  2001.  In  accordance  with APB  Opinion  No. 14,
Accounting for  Convertible  Debt and Debt Issued with Stock  Purchase  Warrants
("APB 14") the warrants  were recorded at their pro rata fair values in relation
to the proceeds received on the date of issuance.  As a result, the value of the
warrants were $430,000.  Stephens Group Inc.  subsequently  sold the warrants to
independent third parties.

On June 11, 2002 LSR issued to FHP warrants to purchase up to 410,914  shares of
LSR Voting Common Stock at a purchase price of $1.50 per share. The LSR warrants
are  exercisable  at any time and will expire on June 11, 2012.  These  warrants
arose out of  negotiations  regarding  the  provision  of the $2.9  million loan
facility made  available to the Company on September 25, 2000 by Mr. Baker,  who
controls FHP. In  accordance  with APB 14 the loan and warrants were recorded at
their pro rata fair values in relation to the  proceeds  received.  As a result,
the value of the warrants were $250,000.

On March 28, 2002, LSR closed the sale in a private placement of an aggregate of
5,085,334  shares of voting  Common Stock at a price of $1.50 per share.  Of the
aggregate proceeds of approximately $7.6 million, $4.4 million was in cash, $2.4
million  represented  conversion  into  equity of debt owed to Mr.  Baker  ($2.1
million) and Focused Healthcare Partners ("FHP") ($0.3 million) and $825,000 was
paid with promissory notes. $222,000 of such promissory notes were repaid during
2002.

Equity Incentive Plans

LSR 2001 Equity Incentive Plan (the "LSR 2001 Equity Incentive Plan")

The LSR Board has adopted the LSR 2001 Equity  Incentive  Plan.  Adoption of the
LSR 2001 Equity  Incentive  Plan will enable LSR to use stock options (and other
stock-based  awards) as a means to attract,  retain and motivate key  personnel.
This stock option plan was  approved by the  shareholders  of LSR,  prior to the
acquisition of Huntingdon.

Awards  under the LSR 2001 Equity  Incentive  Plan may be granted by a committee
designated  by the LSR  Board  pursuant  to the  terms  of the LSR  2001  Equity
Incentive  Plan and may  include:  (i) options to purchase  shares of LSR Voting
Common Stock,  including  incentive stock options ("ISOs"),  non-qualified stock
options or both; (ii) stock appreciation rights ("SARs"), whether in conjunction
with  the  grant  of  stock  options  or  independent  of such  grant,  or stock
appreciation  rights  that  are only  exercisable  in the  event of a change  in
control or upon other events;  (iii)  restricted stock consisting of shares that
are subject to  forfeiture  based on the  failure to satisfy  employment-related
restrictions;  (iv) deferred stock,  representing the right to receive shares of
stock in the future;  (v) bonus  stock and awards in lieu of cash  compensation;
(vi) dividend equivalents,  consisting of a right to receive cash, other awards,
or other  property  equal in value to dividends paid with respect to a specified
number of shares of LSR Voting Common Stock or other periodic payments; or (vii)
other awards not  otherwise  provided for, the value of which are based in whole
or in part upon the value of the LSR Voting Common Stock.  Awards  granted under
the LSR 2001 Equity  Incentive Plan are generally not assignable or transferable
except pursuant to a will and by operation of law.

The flexible terms of the LSR 2001 Equity  Incentive Plan are intended to, among
other things, permit the stock option committee to impose performance conditions
with respect to any award,  thereby  requiring  forfeiture of all or part of any
award  if   performance   objectives   are  not  met  or  linking  the  time  of
exercisability  or  settlement  of an award  to the  attainment  of  performance
conditions.  For awards intended to qualify as "performance-based  compensation"
within the meaning of Section 162(m) of the United States Internal  Revenue Code
such  performance  objectives  shall be based  solely  on (i)  annual  return on
capital;  (ii) annual  earnings or earnings  per share;  (iii)  annual cash flow
provided by operations; (iv) changes in annual revenues; (v) stock price; and/or
(vi) strategic business criteria,  consisting of one or more objectives based on
meeting specified revenue,  market  penetration,  geographic  business expansion
goals, cost targets, and goals relating to acquisitions or divestitures.

LSR's  stock  option  committee,  which  will  administer  the 2001  LSR  Equity
Incentive Plan, will have the authority,  among other things, to: (i) select the
directors,  officers and other employees and independent contractors entitled to
receive awards under the 2001 LSR Equity Incentive Plan; (ii) determine the form
of awards, or combinations of awards,  and whether such awards are to operate on
a tandem basis or in conjunction  with other awards;  (iii) determine the number
of shares of LSR Voting Common Stock or units or rights covered by an award; and
(iv) determine the terms and conditions of any awards granted under the 2001 LSR
Equity  Incentive Plan,  including any  restrictions or limitations on transfer,
any vesting schedules or the acceleration of vesting  schedules,  any forfeiture
provision or waiver of the same and including any terms and conditions necessary
or desirable to ensure the optimal tax result for  participating  personnel  and
the  Company  including  by way of example to ensure that there is no tax on the
grant of the rights and that such tax only  arises on the  exercise of rights or
otherwise when the LSR Voting Common Stock  unconditionally  vests and is at the
disposal of such participating  personnel. The exercise price at which shares of
LSR Voting Common Stock may be purchased  pursuant to the grant of stock options
under the 2001 LSR  Equity  Incentive  Plan is to be  determined  by the  option
committee at the time of grant in its discretion,  which discretion includes the
ability  to set an  exercise  price that is below the fair  market  value of the
shares of LSR Voting Common Stock covered by such grant at the time of grant.

The  number  of  shares  of LSR  Voting  Common  Stock  that may be  subject  to
outstanding  awards granted under the 2001 LSR Equity Incentive Plan (determined
immediately  after the  grant of any  award)  may not  exceed 20 per cent of the
aggregate number of shares of LSR Voting Common Stock then outstanding.

The  2001  LSR  Equity  Incentive  Plan  may  be  amended,  altered,  suspended,
discontinued,  or  terminated  by  the  LSR  Board  without  LSR  Voting  Common
Stockholder  approval  unless such  approval is required by law or regulation or
under the rules of any stock exchange or automated quotation system on which LSR
Voting  Common  Stock  is  then  listed  or  quoted.  Thus,  LSR  Voting  Common
Stockholder  approval will not  necessarily  be required for  amendments,  which
might  increase the cost of the plan or broaden  eligibility.  LSR Voting Common
Stockholder approval will not be deemed to be required under laws or regulations
that condition favorable tax treatment on such approval,  although the LSR Board
may,  in its  discretion,  seek LSR Voting  Common  Stockholder  approval in any
circumstances in which it deems such approval advisable.

No awards were  granted  during 2001  pursuant to the 2001 LSR Equity  Incentive
Plan. The LSR Board has designated  the  Compensation  Committee of the Board to
serve as the stock option committee.

LSR made  grants  under the LSR 2001 Equity  Incentive  Plan on March 1, 2002 to
certain directors as of that date, and employees,  including the Named Executive
Officers:

Grants to Directors
Name                          Number Granted
----                          --------------
Gabor Balthazar               20,000
John Caldwell                 20,000
Kirby Cramer                  40,000

Grants to Named Executive Officers
----------------------------------
Name                          Number Granted
----                          --------------
Andrew Baker                  200,000
Brian Cass                    200,000
Frank Bonner                  35,000
Julian Griffiths              60,000
Richard Michaelson            90,000

All such options have  ten-year  terms;  50% of the shares  subject to grant are
immediately  exercisable  with the remaining 50%  exercisable one year after the
grant date (meaning all such options, fully vested as of March 1, 2003); and all
have an exercise  price of $1.50 per share,  the price at which the Company sold
shares  of  Common  Stock in the  Private  Placement.  Options  to  purchase  an
aggregate of 1,177,000  shares of LSR Common Stock  (including  those  specified
above) were granted to employees  and  directors,  on the terms set forth above,
are listed as follows:

Date of Grant               Numbers Granted               Exercise Price
-------------               ---------------               --------------
March 1, 2002               1,142,000                     $1.50
September 3, 2002           20,000                        $2.40
October 21, 2002            15,000                        $2.03

All such options have  ten-year  terms;  50% of the shares  subject to grant are
immediately  exercisable  with the remaining 50%  exercisable one year after the
grant date (meaning all such options, fully vested as of March 1, 2003); and all
have an exercise  price of $1.50 per share,  the price at which the Company sold
shares  of  Common  Stock in the  Private  Placement.  Options  to  purchase  an
aggregate of 1,177,000  shares of LSR Common Stock  (including  those  specified
above) were granted to employees  and  directors,  on the terms set forth above,
are listed as follow:

Date of Grant                Numbers Granted               Exercise Price
-------------                ---------------               --------------
March 1, 2002                1,142,000                     $1.50
September 3, 2002            20,000                        $2.40
October 21, 2002             15,000                        $2.03


                                          Shares           Wtd Avg. Ex Price
                                           (000)
Outstanding at start of period                 -                          $-
Granted                                    1,177                        1.53
                                     ------------ -----------------------------
December 31, 2002                          1,177                       $1.53
                                     ------------ -----------------------------
Exercisable at end of year                   589                       $1.53
Weighted average fair value of
options granted                             $901

Huntingdon Life Sciences Group plc Stock Option Plans

Huntingdon  Life  Sciences  Group plc issued  options prior to December 31, 1997
pursuant to several stock option plans. However, the ability to exercise options
under all such  Huntingdon  plans  lapsed on March 26, 2002 in  connection  with
LSR's  acquisition of Huntingdon,  except for those granted under the Unapproved
Stock Option Plan (the  "Unapproved  Plan").  Under the  Unapproved  Plan,  some
options  technically remain outstanding.  However,  such options are exercisable
only for shares of  Huntingdon,  a 100% wholly owned  subsidiary of LSR, and are
considered to have no value.

Share purchase loan

Brian Cass,  President and Managing  Director of LSR, acquired 400,000 shares of
LSR Common Stock in the Private Placement. Mr. Cass acquired such shares through
the delivery of two promissory  notes.  Both such promissory  notes, each in the
amount of (pound)211,679 ($335,998), are due on March 28, 2007; bear interest at
the rate of 5% per annum;  and are secured by the  200,000  shares of LSR Common
Stock  purchased  with the  proceeds  of each  such  loan.  The due date of each
promissory note would be accelerated if Mr. Cass  voluntarily  resigned from his
employment  with LSR or had his employment  terminated.  Repayment of one of the
promissory notes will be made by automatic deduction of (pound)44,000  ($69,840)
per year from the (pound)66,000 ($104,762) per year pension contribution made by
the Company to a pension plan established by Mr. Cass. The other note is further
collateralized by the (pound)214,500 ($340,476) accrued in such pension account.
In addition,  one-third of any yearly bonus received by Mr. Cass will be used to
reduce  principal  of the  promissory  notes.  Total  amount  of this loan as of
December  31, 2002 is  (pound)400,680  ($645,000  at year-end  foreign  exchange
rates).

Julian Griffiths, a director of LSR and Finance Director of Huntingdon, acquired
50,000  shares of LSR  Common  Stock in the  Private  Placement.  Mr.  Griffiths
acquired such shares through the delivery of a promissory  note in the principal
amount  of  (pound)52,817  ($83,837),  which is due on  March  28,  2007;  bears
interest at the rate of 5% per annum; and is secured by the 50,000 shares of LSR
Common  Stock  purchased  with  the  proceeds  of  the  loan.  Repayment  of the
promissory  note will be made by automatic  monthly  deduction of  (pound)943.56
($1,498) from Mr.  Griffith's  salary.  Total amount of this loan as of December
31, 2002 is (pound)24,230 ($39,000 at year-end foreign exchange rates).


ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

The  selected  consolidated  financial  data  presented  below should be read in
conjunction  with  the  "Management's   Discussion  and  Analysis  of  Financial
Condition and Results of Operations", included elsewhere in this report. For the
purpose of this report,  it is assumed that LSR is the ultimate  parent  company
for  periods  prior  to July  19,  2001,  since  before  this  date,  LSR had no
substantive operations on a stand-alone basis.

The selected consolidated financial information as of December 31, 2001 and 2000
and for each of the two years in the period  ended  December  31,  2001 has been
derived from  Huntingdon's  audited  consolidated  financial  statements and the
related notes  included in this Annual Report on Form 10-K beginning on page 28.
Such financial statements and the selected consolidated financial information as
of December 31, 2002 of LSR have been prepared in accordance with US GAAP.

The selected consolidated financial information as of December 31, 1999 and 1998
and for each of the two years ended December 31, 1999 and 1998 have been derived
from Huntingdon's  consolidated  financial  statements which are not included in
this Annual Report on Form 10-K;  such  financial  statements  were presented in
pounds  sterling and were prepared in accordance  with US GAAP.  These financial
statements have been translated into US dollars as follows:

<TABLE>
<CAPTION>

                                                 As of and for the year ended December 31
                                            ------------- --------------- -------------- ------------- --------------
                                                    2002            2001           2000          1999           1998
                                            -------------------------------------------------------------------------
                                                                 ($000, except per share data)
<S>                                             <C>             <C>             <C>          <C>           <C>
Statement of Operations Data
Revenues                                         115,742          99,206         95,964        94,186         87,196
Operating income/(loss)                            4,264         (1,643)             84       (2,482)       (34,622)
Net income/(loss)                                  2,697         (9,628)        (9,763)       (6,605)       (38,301)
Income/(loss per share)
     - Basic                                        0.25         $(1.64)        $(1.68)       $(1.13)        $(6.58)
     - Diluted                                      0.24         $(1.64)        $(1.68)       $(1.13)        $(6.58)
Weighted average number of shares
outstanding ('000)                                10,679           5,868          5,824         5,820          5,820
Dividends per share                                    -               -              -             -              -
Book value per share                             $(0.73)         $(0.81)          $0.70         $2.55          $3.80


                                                 As of and for the year ended December 31
                                            ------------- --------------- -------------- ------------- --------------
                                                    2002            2001           2000          1999           1998
                                            -------------------------------------------------------------------------
                                                                             ($000)
Balance Sheet Data
Total assets                                     148,410         133,964        146,107       158,970        183,107
Long term debt and related party loans
                                                  84,075          88,123         50,209        50,000         90,853
Total shareholders deficit                       (7,804)         (4,724)          4,066        14,850         22,144
Common stock and paid in capital                  74,614          66,094         65,330        65,242         65,242

Other Financial Data
Depreciation and amortization                      8,108           8,307          9,093         9,675         17,719
Capital expenditures                               4,177           3,295          3,648         4,893          4,025

</TABLE>



ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

GENERAL

The following  should be read in conjunction  with the  consolidated  financials
statements of LSR as presented in "Item 8, Financial Statements and Supplemental
Data".

LSR is one of the world's  leading  providers of pre-clinical  and  non-clinical
safety  testing  services to the  pharmaceutical,  agrochemical  and  industrial
chemical industries.  The Company provides those services under contracts, which
may range from one day to three years. Income from these contracts is recognized
as services are rendered towards the preparation of the final report.  Contracts
are  generally  terminable  upon  notice by the  client  with the  client  being
responsible  for  reimbursing the Company for the value of work performed to the
date of cancellation  plus the value of work required to wind down a study on an
orderly basis.

The Company's business is characterized by high fixed costs, in particular staff
and facility related costs. Such a high proportion creates favorable  conditions
for the Company as excess capacity is utilized, such as has been the case during
the last two years.  However,  during  periods  of  declining  revenue,  careful
planning  is  required  to reduce  costs  without  impairing  revenue-generating
activities.

RESULTS OF OPERATIONS

Year ended December 31, 2002 compared with the year ended December 31, 2001

Revenues in the year ended December 31, 2002 were $115.7 million, an increase of
17% on  revenues of $99.2  million for the year ended  December  31,  2001.  The
underlying increase,  after adjusting for the impact of the movement in exchange
rates was 13%; with the UK showing a 15% increase and the US a 7% increase.  The
year 2002 saw a record  growth in orders,  representing  an increase of 25% over
last year. At December 31, 2002, backlog amounted to approximately $95 million.

Cost of sales in the year  ended  December  31,  2002  were  $93.4  million,  an
increase of 11% on cost of sales of $84.1  million  for the year ended  December
31,  2001.  This  increase  was partly due to  exchange  rate  movements,  which
increased  cost of sales in the year by $3.0 million.  Without  these  movements
cost of sales would have  increased by 8%. In the UK cost  increases in sterling
were only 8%,  which is lower  than the  revenue  growth as  capacity  is filled
without the  corresponding  increase in fixed  costs.  The main  increase was in
labor costs  reflecting  actions taken to adjust salaries to allow retention and
recruitment of key employees.  Increases in costs in the US were only 3%, mainly
due to lower increases in direct materials costs compared to the UK.

Selling and  administrative  expenses  rose by 13% to $18.1 million for the year
ended  December 31, 2002 from $16.0 million in the year ended December 31, 2001.
Of this increase,  $0.6 million related to exchange rate movements.  This growth
was due to a continuation  of the build-up of the sales activity during the year
and higher labor costs.

There were no other  operating  expenses in the year ended  December  31,  2002,
compared  with $0.75  million in the year ended  December 31, 2001.  In the year
ended  December 31, 2001,  other  operating  expenses  comprised $0.4 million in
connection  with specific  legal actions taken against  animal rights groups and
$0.35  million in  connection  with the write off of foreign  exchange  dealings
resulting from the bankruptcy of an exchange broker.

Interest  expense declined by 5% to $6.3 million for the year ended December 31,
2002 from $6.6 million in the year ended December 31, 2001. The main reasons for
the reduction are the repayment of the former Stephens' loan and Baker loan, the
repurchase of $2.4 million (principal amount) of the bonds,  together with lower
interest  rates on the  non-bank  debt (down from an average in 2001 of 7.13% to
5.77% in 2002).

Other income of $4.9 million for the year ended December 31, 2002 comprised $5.0
million from the non-cash  foreign  exchange  remeasurement  gain on the Capital
Bonds  denominated  in US dollars  (the  functional  currency  of the  financing
subsidiary that holds the bonds is UK sterling); a $1.2 million gain was made on
the partial  repurchase of the Capital  Bonds;  offset  against these was a $1.3
million charge  relating to the  finalization of the Exchange Offer. In the year
ended  December  31, 2001 there were other  operating  expenses of $4.5  million
which comprised of non-cash foreign exchange  remeasurement  loss on the Capital
Bonds of $1.4 million;  $2.9 million  relating to the Exchange  Offer;  and $0.2
million to the write off of the unamortized refinancing costs.

Taxation  charge on income for the year ended December 31, 2002 was $0.3 million
representing  a charge at 8%  compared  to a taxation  benefit  of $3.0  million
representing   benefit  at  26%  for  the  year  ended   December  31,  2001.  A
reconciliation  between  the US  statutory  tax rate and the  effective  rate of
income tax benefit on losses before income taxes for the year ended December 31,
2002 and December 31, 2001 is shown below:
<TABLE>
<CAPTION>

                                                          % of income/(loss)
                                                          before income taxes
                                                               2002               2001
                                                                 %                  %
<S>                                                             <C>               <C>
US statutory rate                                                  35               (35)
Foreign rate differential                                          (9)                6
Non-deductible items including foreign exchange loss              (31)                3
State taxes                                                         2                 -
Prior year adjustments                                             11                 -
                                                       ----------------    -------------
Effective tax rate                                                  8               (26)
                                                       ----------------    --------------
</TABLE>

The overall  net income for the year ended  December  31, 2002 was $2.7  million
compared to a loss of $9.6  million in the year ended  December  31,  2001.  The
diluted income per share for the year ended December 31, 2002 was $0.24 compared
to a diluted loss per share of $(1.64) for the year ended December 31, 2001.

Excluding  other income and expense,  net of income tax, the  income/(loss)  per
share  would  have  been a net loss  per  share of  $(0.20)  for the year  ended
December 31, 2002 and $(0.96) for the year ended December 31, 2001.

Year ended December 31, 2001 compared with year ended December 31, 2000

Revenues for the year ended December 31, 2001 at $99.2 million were just over 3%
above the  revenues  for the year  ended  December  31,  2000 of $96.0  million,
continuing the  improvement  shown in the prior year.  The underlying  increase,
after adjusting for the impact of the movement in exchange rates, was nearly 9%.
2001 saw a 9% growth in orders  with the return of client  confidence  after the
refinancing   in  January  2001.  The  backlog  at  the  end  of  the  year  was
approximately $73 million.

Cost of sales for the year ended  December  31, 2001 of $84.1  million  compared
with $80.7  million for the year ended  December 31,  2000,  an increase of just
over 4%. Again, after allowing for the impact of the movement in exchange rates,
the underlying increase was approximately 10%. The main reasons for the increase
in  costs  relate  to  the  increase  in  business  volume,   salary  increases,
particularly  in  the  UK,  to  reflect  market  rates,  and  recruitment  costs
reflecting the shortage of qualified staff in the market place.

Selling and  administration  costs for the year ended December 31, 2001 at $16.0
million  were 6% up on the costs for the year ended  December  31, 2000 of $15.1
million. After allowing for the impact of exchange rate movements the underlying
cost increase was 11%. The increase was mainly due to increased  sales  activity
with  additional  staff of $0.4 million ;  increases in insurance  costs of $0.2
million; and banking costs of $0.1 million.  Excluding these items, the increase
was just over 1%.

In 2001,  other  operating  expenses  comprised a write off in  connection  with
foreign exchange dealings resulting from the bankruptcy of an exchange broker of
$0.35 million and specific legal and other costs incurred in connection with the
Animal Rights campaign of $0.4 million.

Net  interest  costs for the year  ended  December  31,  2001 were $6.5  million
compared with $7.2 million for the year ended  December 31, 2000.  The effect of
exchange  rates  movements  reduced the charge for the year by $0.4  million;  a
reduction in the facility  renewal fees once the  refinancing had been completed
in January 2001 reduced the charge by a further $0.6 million.  These were offset
by an increase in interest costs of $0.3 million  resulting from the increase in
borrowings from $85.5 million to $88.1 million.

Other expense of $4.5 million for the year ended  December 31, 2001 comprised of
non-cash foreign exchange  remeasurement losses on the Capital Bonds denominated
in US  dollars  of  $1.4  million.  The  functional  currency  of the  financing
subsidiary  that  holds  the bonds is the UK pound  sterling.  In  addition,  it
includes $2.9 million  relating to the Exchange Offer and $0.2 million  relating
to the write off of the unamortized  refinancing  costs.  This expense  compares
with other expense of $5.4 million for the year ended  December 31, 2000,  which
comprised  costs of $1.8 million  incurred in the  refinancing  of the Company's
bank debt, and $3.6 million,  which was the result of non-cash  foreign exchange
remeasurement losses on the Capital Bonds.

Taxation benefit on loss for the year ended December 31, 2001 was $3.0 million
representing benefit at 26% compared to $2.7 million representing benefit at 22%
in the previous year. A reconciliation between the US statutory tax rate and the
effective rate of tax benefit on losses before taxes for the year ended December
31, 2001 and December 31, 2000 is shown below.

                                                    % of loss before
                                                       income taxes
                                                  2001             2000
                                                    %               %
US statutory rate                                  35               35
Foreign rate differential                          (6)             (5)
Non deductible foreign exchange loss               (3)             (4)
Prior year adjustments                              -              (4)
                                               ------------     -----------
                                                   26               22
                                               ------------     -----------

The  resultant  net loss for the year ended  December  31, 2001 was $9.6 million
compared  with $9.8  million the previous  year.  Diluted loss per share for the
year ended  December  31, 2001 was $1.64  compared  with $1.68 in the year ended
December 31, 2000.

SEGMENT ANALYSIS

The analysis of the Company's  revenues and operating loss between  segments for
the three years ended December 31, 2002 is as follows:
<TABLE>
<CAPTION>

Company                                          2002             2001              2000
                                                 $000             $000              $000
<S>                                         <C>              <C>               <C>
Revenues
           UK                                  90,851           75,705            73,035
           US                                  24,891           23,501            22,929
                                           -----------    -------------     -------------
                                             $115,742          $99,206           $95,964
                                           -----------    -------------     -------------

Operating income/(loss) before other
   operating  expenses
           UK                                   3,963            (784)           (1,615)
           US                                     301            (109)             1,699
                                           -----------    -------------     -------------
                                               $4,264           $(893)               $84
                                           -----------    -------------     -------------
Other operating expense
           UK                                       -            (750)                 -
           US                                       -                -                 -
                                           -----------    -------------     -------------
                                                   $-           $(750)                $-
                                           -----------    -------------     -------------
Operating income/(loss)
           UK                                   3,963          (1,534)           (1,615)
           US                                     301            (109)             1,699
                                           -----------    -------------     -------------
                                               $4,264         $(1,643)               $84
                                           -----------    -------------     -------------
</TABLE>

The  performance  of each  segment is  measured  by  revenues  and by  operating
income/(loss) before other operating expenses.

UK

Revenues  increased by 20% in the year ended  December 31, 2002  compared to the
year ended  December 31, 2001.  After  allowing for the effect of exchange  rate
movements  the increase was over 15%.  This was a result of continued  growth in
orders.

The operating income before other operating (expenses)/income for the year ended
December 31, 2002 was $4.0 million compared to an operating loss of $0.8 million
in the year to December 31, 2001.  The increase in revenues had the major impact
on the improvement in operating income, with the filling of capacity without the
corresponding  increase  in fixed  costs.  There  were  some  additional  costs,
including  salary  increases both to reflect  market rates and additional  staff
($2.6 million); and a reduction in exchange gains ($0.2 million).

Revenues  increased by 4% in the year ended  December  31, 2001  compared to the
year ended  December 31, 2000.  After  allowing for the effect of exchange  rate
movements, revenues increased by 9%.

The operating loss before other  operating  expenses for the year ended December
31, 2001 was $0.8 million  compared to $1.6  million in the year ended  December
31, 2000.  The increase in revenues  reduced the losses,  but this was partially
offset by additional  costs.  These included salary  increases to reflect market
rates;  recruitment  costs  reflecting  the shortage of  qualified  staff in the
market place; increased sales activity with additional staff ($0.35 million) and
a reduction in exchange gains ($0.9 million).

US

Revenues  increased by 5.9% in the year ended  December 31, 2002 compared to the
year ended  December 31, 2001.  This  increase in the rate of growth of revenues
was due to a recovery in orders after the  reduction  level last year.  Revenues
from the US toxicology  operations remained constant,  but revenues derived from
the  analysis  of samples  from  clinical  trials  returned to their more normal
levels following the decrease last year.

Operating  (loss)/income  before other operating expense improved from a loss of
$0.1 million in the year ended  December 31, 2001 to a income of $0.3 million in
the  year  ended  December  31,  2002.  This was as a  result  of the  increased
revenues.

Revenues  increased by 2.5% in the year ended  December 31, 2001 compared to the
year ended  December 31, 2000.  This reduction in the rate of growth of revenues
was due to a decline in orders after two years of rapid  growth.  Revenues  from
the US toxicology  operations  continued to grow, but revenues  derived from the
analysis of samples from  clinical  trials  declined  with the  completion  of a
number of major studies.

Operating (loss)/income before other operating expense declined from a income of
$1.7  million in the year ended  December  31, 2000 to a loss of $0.1 million in
the year ended  December  31,  2001.  Apart from  inflationary  cost  increases,
additional  security  expenses of $0.5 million  were  incurred in the year ended
December 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES

Bank Loan and Non-Bank Loans

On January 20, 2001,  the  Company's net non-bank  loan of  (pound)22.4  million
($36.0 million approximately),  was refinanced by Stephens' Group Inc. and other
parties.  It is now repayable on June 30, 2006 and interest is payable quarterly
at LIBOR plus  1.75%.  At the same time the  Company  was  required  to take all
reasonable   steps  to  sell  off  such  of  its  real  estate  assets   through
sale/leaseback  transactions  and/or obtaining mortgage financing secured by the
Company's  real  estate  assets  to  discharge  this  loan.  The loan is held by
Huntingdon  Life  Sciences  Group plc and is  secured by the  guarantees  of the
wholly owned  subsidiaries  of the Company  including,  Huntingdon Life Sciences
Group plc, Huntingdon Life Sciences Ltd., and Huntingdon Life Sciences Inc., and
collateralized  by all the assets of these  companies.  The loan was transferred
from Stephens  Group Inc., to an unrelated  third party  effective  February 11,
2002.

On October 9, 2001, on behalf of  Huntingdon,  LSR issued to Stephens Group Inc.
warrants  to  purchase  up to  704,425  shares of LSR Voting  Common  Stock at a
purchase price of $1.50 per share.  The LSR warrants are exercisable at any time
and will expire on October 9, 2011.  These  warrants  arose out of  negotiations
regarding  the  refinancing  of the bank loan by the  Stephens  Group  Inc.,  in
January 2001. In accordance with APB Opinion No. 14,  Accounting for Convertible
Debt and Debt Issued with Stock  Purchase  Warrants ("APB 14") the warrants were
recorded at their pro rata fair values in relation to the  proceeds  received on
the date of issuance.  As a result, the value of the warrants was $430,000.  The
warrants were subsequently transferred to an unrelated third party.

Convertible Capital Bonds

The remainder of the Company's  long term  financing is provided by  Convertible
Capital  Bonds  repayable in September  2006.  At the time of the issue in 1991,
these bonds were for $50 million par. They carry  interest at a rate of 7.5% per
annum,  payable biannually in March and September.  During the year, the Company
repurchased and cancelled $2,410,000 principal amount of such bonds resulting in
a  $1.2  million  gain  recorded  in  other  income/expense.  Subsequent  to the
year-end,  the Company  further  repurchased  and cancelled  $945,000  principal
amount  of  such  bonds  resulting  in a gain of $0.5  million.  At the  current
conversion  rate,  the number of shares of Voting  Common  Stock to be issued on
conversion and exchange of each unit of $10,000 comprised in a Bond would be 49.
The conversion rate is subject to adjustment in certain circumstances.

Related Party Loans

Other  financing  has been  provided  by a $2.952  million  loan  facility  made
available on September  25, 2000 by a director,  Mr. Baker.  In connection  with
this financing,  the company authorized,  subject to shareholder  approval,  the
issuance of warrants to purchase  410,914  shares of LSR Voting  Common Stock at
purchase  price of $1.50 per share to FHP, a company  controlled  by Mr.  Baker.
Such  shareholder  approval  was granted on June 12, 2002.  Additionally,  other
financing  also includes a $2.8 million  facility  from the Stephens  Group Inc.
made available on July 19, 2001.  Effective February 11, 2002 the Stephens Group
Inc. debt was transferred to an unrelated third party. Both facilities have been
fully drawn down.  $550,000 of the loan from Mr.  Baker was  transferred  to and
assumed by FHP in March 2001.  These loans from Mr. Baker and FHP are  repayable
on demand  although they are  subordinated  to the bank debt, they are unsecured
and interest is payable  monthly at a rate of 10% per annum.  On March 28, 2002,
$2.1 million of Mr.  Baker's loan was  converted  into  1,400,000  shares of LSR
Voting Common Stock and $300,000 of FHP's loan was converted into 200,000 shares
of LSR Voting Common Stock;  in each case as part of LSR's private  placement of
approximately  5.1 million  shares of Voting Common  Stock.  As a result of such
conversions,  $302,000 remains payable to Mr. Baker and $250,000 remains payable
to FHP. Net of warrants, as discussed below, the corresponding amount payable on
the FHP loan is $56,000.  The former  Stephens  Group Inc.  secured  facility is
subordinated to the bank loan. Interest was payable monthly at a rate of 10% per
annum. With the consent of the bank lender,  one half of the facility was repaid
on July 1, 2002, and the remainder was repaid on October 1, 2002.

As noted  above,  on June 11, 2002 LSR issued to FHP  warrants to purchase up to
410,914  shares of LSR  Voting  Common  Stock at a  purchase  price of $1.50 per
share.  The LSR warrants are exercisable at any time and will expire on June 11,
2012.  These warrants arose out of  negotiations  regarding the provision of the
$2.9 million loan facility  made  available to the Company on September 25, 2000
by Mr. Baker,  who controls FHP. In accordance with APB 14 the loan and warrants
were  recorded  at their  pro rata  fair  values  in  relation  to the  proceeds
received. As a result, the value of the warrants was $250,000.

Common Shares

On January 10, 2002, LSR issued 99,900 shares of Voting Common Stock and 900,000
shares of Non-Voting Common Stock at a price of $1.50 per share (or an aggregate
of $1.5  million).  Effective  July 25, 2002,  all of the 900,000  shares of the
Non-Voting  Common Stock were  converted  into 900,000  shares of Voting  Common
Stock.

On March 28, 2002, LSR closed the sale in a private placement of an aggregate of
5,085,334  shares of Voting  Common Stock at a price of $1.50 per share.  Of the
aggregate proceeds of approximately $7.6 million, $4.4 million was in cash, $2.4
million  represented  conversion  into  equity of debt owed to Mr.  Baker  ($2.1
million) and FHP ($0.3  million) and  $825,000 was paid with  promissory  notes.
$222,000 of such promissory notes were repaid during 2002.

Cash flows

During the year ended  December  31, 2002 funds  generated  were $12.4  million,
increasing cash in hand and on short-term  deposit from $2.2 million at December
31,  2001 to $14.6  million  at  December  31,  2002.  The cash  generated  from
operating,  investing and  financing  activities  were  generated as follows (in
millions):
<TABLE>
<CAPTION>

                                                      2002                2001              2000

<S>                                                  <C>                <C>               <C>
Operating  income/(loss)  before
  other  operating  (expense)/income                  $4.3               $(0.9)            $(0.1)
Depreciation                                           8.1                8.3                9.1
Working capital movement                               9.0                0.2               (2.7)
Interest                                              (6.1)              (6.5)              (7.2)
Capital expenditure                                   (4.2)              (3.3)              (3.6)
Other (expense)/income                                (1.2)              (3.1)              (1.8)
Shares issued net of loan repayments                   1.7                5.0                1.8
Effect of exchange rate changes on cash                0.8               (0.7)              (0.7)
                                                  --------------      -------------     --------------
                                                      $12.4              $(1.0)            $(5.2)
                                                  --------------      -------------     --------------

</TABLE>

Net days sales outstanding (DSOs) at December 31, 2002 were 9 days, down from 46
days at December 31, 2001.  DSO is calculated  as a sum of accounts  receivable,
unbilled  receivables and fees in advance over total revenue. The improvement is
in part due to a dedicated  initiative at the Company  throughout this past year
to improve  the  processes  that affect  this.  The impact on  liquidity  from a
one-day change in DSO is approximately $350,000.

At December 31, 2002, the Company had a working capital  deficiency of $844,000.
The Company  believes that projected cash flow from  operations will satisfy its
contemplated cash requirements for at least the next 12 months.

Commitment and Contingencies

Operating leases

Operating lease expenses were as follows:

                                    2002        2001        2000
                                    $000        $000        $000
Hire of plant and equipment          904        924         1184
Other operating leases               392        127          69

The Company has commitments payable under operating leases as follows:


               Year ended December 31                 $000

               2003                                    956
               2004                                    417
               2005                                     95
               2006                                     51
               2007                                      1
                                          -----------------
                                                    $1,520
                                          -----------------
Capital Leases

                                                      $000
               2003                                    225
               2004                                    100
                                         ------------------
                                                      $325
                                         ------------------

Contingencies

The Company is party to certain legal  actions  arising out of the normal course
of its  business.  In  management's  opinion,  none of these actions will have a
material effect on the Company's  operations,  financial condition or liquidity.
No  form  of  proceedings  has  been  brought,  instigated  or  is  known  to be
contemplated against the Company by any government agency.

ORDERS

The year 2002 saw order growth of over 25% over the prior year.  The increase in
orders was driven by the Company's  pharmaceutical business, which was 35% up on
2001. Non-pharmaceutical orders also grew in 2002 (5% ahead of 2001 orders), but
declined as a percent of total company sales to 30%.

EXCHANGE RATE FLUCTUATIONS AND EXCHANGE CONTROLS

The Company operates on a worldwide basis and generally  invoices its clients in
the currency of the country in which the Company  operates.  Thus,  for the most
part, exposure to exchange rate fluctuations is limited as sales are denominated
in the same currency as costs.  Trading  exposures to currency  fluctuations  do
occur  as a  result  of  certain  sales  contracts,  performed  in the UK for US
clients, which are denominated in US dollars and contribute approximately 11% of
total revenues. Management has decided not to hedge against this exposure.

Also,  exchange  rate  fluctuations  may have an  impact on the  relative  price
competitiveness  of the Company vis a vis  competitors  who trade in  currencies
other than  sterling or dollars.  Such  fluctuations  also have an impact on the
translation of the 7.5% convertible capital bonds payable in September 2006.

Finally,  the  consolidated  financial  statements of LSR are  denominated in US
dollars.  Changes in exchange  rates  between the UK pound  sterling  and the US
dollar will affect the translation of the UK subsidiary's financial results into
US dollars for the purposes of reporting the consolidated financial results. The
process by which each foreign subsidiary's financial results are translated into
US dollars is as follows:  income  statement  accounts are translated at average
exchange  rates for the period;  balance sheet asset and liability  accounts are
translated at end of period exchange  rates;  and equity accounts are translated
at historical  exchange  rates.  Translation of the balance sheet in this manner
affects the  stockholders'  equity account referred to as the accumulated  other
comprehensive  loss  account.  Management  has decided not to hedge  against the
impact of exposures giving rise to these translation  adjustments as such hedges
may impact upon the Company's cash flow compared to the translation  adjustments
which do not affect cash flow in the medium term.

Exchange rates for translating US dollars into sterling were as follows:

                         At December 31       Average rate (1)
         2000                0.6760                0.6520
         2001                0.6800                0.6950
         2002                0.6212                0.6664


(1)  Based on the  average of the  exchange  rates on the last day of each month
     during the period.

On March 18, 2003 the noon buying rate for sterling was $1.00 = (pound)0.64.

The  Company  has  not  experienced  difficulty  in  transferring  funds  to and
receiving funds remitted from those  countries  outside the US or UK in which it
operates and management expects this situation to continue.

While the UK has not at this time  entered  the  European  Monetary  Union,  the
Company has ascertained  that its financial  systems are capable of dealing with
Euro denominated transactions.

The  following  table  summarizes  the  financial  instruments   denominated  in
currencies  other  than the US  dollar  held by LSR and its  subsidiaries  as of
December 31, 2002:
<TABLE>
<CAPTION>
                                                            Expected Maturity Date
                                      2002    2003    2004   2005      2006  Thereafter    Total  Fair Value
(In US Dollars, amounts in thousands)
<S>              <C>                <C>                            <C>                  <C>        <C>
Cash              - Pound Sterling   8,051                                                 8,051      8,051
                  - Euro               731                                                   731        731
Accounts
receivable        - Pound Sterling  14,103                                                14,103     14,103
                  - Euro               629                                                   629        629
Debt              - Pound Sterling                                 (36,385)             (36,385)   (36,385)

</TABLE>

COMPETITION

Competition in both the  pharmaceutical and  non-pharmaceutical  market segments
ranges from in-house research and development divisions of large pharmaceutical,
agrochemical  and industrial  chemical  companies,  who perform their own safety
assessments to contract research  organizations like the Company,  who provide a
full  range of  services  to the  industries  and niche  suppliers  focusing  on
specific services or industries.

This competition  could have a material adverse effect on LSR's net revenues and
net income,  either through  in-house  research and development  divisions doing
more work internally to utilize capacity or through the loss of studies to other
competitors.  As the Company  operates on an international  basis,  movements in
exchange rates,  particularly against sterling, can have a significant impact on
its price competitiveness.

CONSOLIDATION WITHIN PHARMACEUTICAL INDUSTRY

The process of consolidation  within the  pharmaceutical  industry  continues to
accelerate the move towards outsourcing work to contract research  organizations
in the longer term as resources are increasingly invested in in-house facilities
for discovery and lead  optimization,  rather than  development  and  regulatory
safety evaluation.  However, in the short-term,  there is a negative impact with
development  pipelines being rationalized and a focus on integration rather than
development.  This can have a  material  adverse  impact  on the  Company's  net
revenues and net income.

ANIMAL RIGHTS ACTIVISM

Refer to the detailed discussion under Item 1, on pages 9 to 10.

INFLATION

While most of the Company's net revenues are earned under fixed price contracts,
the effects of inflation do not generally have a material  adverse effect on its
operations  or  financial  condition  as only a minority of the  contracts  have
duration in excess of one year.

SIGNIFICANT ACCOUNTING POLICIES

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance  with US GAAP.  The Company  considers the following
accounting policies to be significant accounting policies.

Revenue recognition

The majority of the  Company's  net revenues  have been earned under  contracts,
which generally range in duration from a few months to three years. Revenue from
these  contracts  is  generally  recognized  over the term of the  contracts  as
services are rendered. Contracts may contain provisions for renegotiation in the
event of cost  overruns due to changes in the level of work scope.  Renegotiated
amounts  are  included in net revenue  when earned and  realization  is assured.
Provisions  for losses to be incurred on contracts are recognized in full in the
period in which it is determined that a loss will result from performance of the
contractual arrangement.  Most service contracts may be terminated for a variety
of reasons by the Company's  customers,  either  immediately or upon notice of a
future date. The contracts  generally require payments to the Company to recover
costs  incurred,  including  costs to wind down the study,  and  payment of fees
earned to date,  and in some cases to provide the Company  with a portion of the
fees or income that would have been earned  under the  contract had the contract
not been terminated early.

Unbilled  receivables  are  recorded  for  revenue  recognized  to date  that is
currently  not  billable to the  customer  pursuant  to  contractual  terms.  In
general,  amounts become billable upon the achievement of certain aspects of the
contract  or  in  accordance  with  predetermined  payment  schedules.  Unbilled
receivables  are  billable  to  customers  within  one year from the  respective
balance sheet date. Fees in advance are recorded for amounts billed to customers
for which,  revenue has not been  recognized  at the balance sheet date (such as
upfront  payments  upon  contract   authorization,   but  prior  to  the  actual
commencement of the study).

If the Company does not accurately  estimate the resources required or the scope
of work to be  performed,  or does not manage its projects  properly  within the
planned  periods of time or satisfy its  obligations  under the contracts,  then
future  margins  may be  significantly  and  negatively  affected  or  losses on
existing contracts may need to be recognized.  Any such resulting  reductions in
margins  or  contract  losses  could be  material  to the  Company's  results of
operations.

Use of estimates

The  preparation  of financial  statements in  conformity  with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the dates of the financial  statements and the results of operations  during the
reporting periods. These also include management estimates in the calculation of
pension  liabilities  covering  discount rates,  return on plan assets and other
actuarial assumptions. Although these estimates are based upon management's best
knowledge of current events and actions,  actual results could differ from those
estimates.

Taxation

The Company  accounts  for income  taxes under the  provisions  of  Statement of
Financial  Accounting  Standards ("SFAS") No. 109, "Accounting For Income Taxes"
("SFAS  109").  SFAS  109  requires  recognition  of  deferred  tax  assets  and
liabilities for the estimated future tax consequences of events  attributable to
differences  between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carry  forwards.  Deferred tax assets and liabilities are measured using enacted
rates in  effect  for the year in  which  the  differences  are  expected  to be
recovered  or settled.  The effect on  deferred  tax assets and  liabilities  of
changes in tax rates is  recognized in the statement of operations in the period
in which the enactment  date changes.  Deferred tax assets and  liabilities  are
reduced  through the  establishment  of a valuation  allowance  at such time as,
based on  available  evidence,  it is more likely than not that the deferred tax
assets will not be realized.  While the Company has  considered  future  taxable
income and ongoing prudent and feasible tax planning strategies in assessing the
need  for the  valuation  allowance,  in the  event  that  the  Company  were to
determine  that it would not be able to realize all or part of its net  deferred
tax assets in the future,  an  adjustment  to the  deferred  tax assets would be
charged to income in the period such  determination was made.  Likewise,  should
the Company  determine  that it would be able to realize its deferred tax assets
in the  future  in excess  of its net  recorded  amount,  an  adjustment  to the
deferred tax assets would increase income in the period such  determination  was
made.

NEW ACCOUNTING STANDARDS

In July 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
141 "Business Combinations." ("SFAS 141"). SFAS 141 requires the purchase method
of  accounting  for  business  combinations  initiated  after June 30,  2001 and
eliminates  the  pooling-of-interests  method.  The  adoption of SFAS 141 had no
impact on LSR's results of operations, financial position or cash flows.

In July 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets".  This  statement  applies to  intangibles  and goodwill  acquired after
September 30, 2001,  as well as goodwill and  intangibles  previously  acquired.
Under this statement,  goodwill as well as other intangibles  determined to have
an  infinite  life will no longer be  amortized;  however  these  assets will be
reviewed for  impairment on a periodic  basis.  This statement was effective for
LSR for the first  quarter  of the fiscal  year ended  December  31,  2002.  The
adoption  of this  statement  had no  impact  on LSR's  results  of  operations,
financial position or cash flows.

In August 2001, the FASB issued SFAS No. 143,  "Accounting for Asset  Retirement
Obligations" ("SFAS 143"). This statement is effective for financial  statements
issued for fiscal years  beginning on or after June 15, 2002.  SFAS 143 requires
entities  to  record  the fair  value  of a  liability  for an asset  retirement
obligation in the period in which it is incurred.  When a liability is initially
recorded, the entity capitalizes a cost by increasing the carrying amount of the
related  long-lived  asset.  Over time, the liability is accreted to its present
value each period,  and the capitalized cost is depreciated over the useful life
of the related asset. Upon settlement of the liability, an entity either settles
the obligation for its recorded amount or incurs a gain or loss upon settlement.
LSR does not believe  that the adoption of this  statement  will have a material
impact on LSR's results of operations, financial position or cash flows.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of  Long-Lived"  Assets.  This  statement is effective for fiscal years
beginning after December 15, 2001 and interim periods within those fiscal years.
These new rules on asset impairment  supersede SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" and
portions  of APB  Opinion  30,  "Reporting  the  Results  of  Operations".  This
statement  provides  a single  accounting  model  for  long-lived  assets  to be
disposed of and significantly  changes the criteria that would have to be met to
classify  an asset  as  held-for-sale.  Classification  as  held-for-sale  is an
important  distinction  since such assets are not  depreciated and are stated at
the  lower of fair  value or  carrying  amount.  This  statement  also  requires
expected future operating losses from discontinued operations to be displayed in
the  period(s)  in  which  the  losses  are  incurred,  rather  than  as of  the
measurement  date as presently  required.  The adoption of this statement had no
impact on LSR's results of operations, financial position or cash flows.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4, 44, and 64,  Amendment of FASB  Statement No. 13, and Technical  Corrections"
("SFAS 145").  This statement is effective  fiscal years beginning after May 15,
2002.  SFAS  145  rescinds  SFAS  No.  4,  "Reporting   Gains  and  Losses  from
Extinguishment  of Debt"  (SFAS 4),  which  required  all gains and losses  from
extinguishment  of debt to be  aggregated  and, if  material,  classified  as an
extraordinary  item, net of related income tax effect. As a result, the criteria
in Opinion 30 will now be used to classify those gains and losses. SFAS 145 also
amends  Statement  13 to require  that  certain  lease  modifications  that have
economic effects similar to sale-leaseback  transactions be accounted for in the
same  manner as  sale-leaseback  transactions.  The  Company  early  adopted the
provisions of this statement,  resulting in the inclusion of a $1.2 million gain
in other income/(expense) in 2002.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal Activities" (SFAS 146). SFAS 146 requires that a liability
for a cost associated  with an exit or disposal  activity be recognized when the
liability is incurred.  SFAS 146 eliminates the definition and  requirement  for
recognition  of exit costs in Emerging  Issues Task Force  (EITF) Issue No. 94-3
where a liability  for an exit costs was  recognized  at the date of an entity's
commitment  to an exit plan.  This  statement is effective  for exit or disposal
activities  initiated  after  December 31,  2002.  LSR does not believe that the
adoption  of this  statement  will  have a  material  impact on its  results  of
operations, financial position or cash flows.

In June 2002, the FASB issued  Statement No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure,  an amendment of FASB Statement No.
123" ("SFAS 148"). This statement amends FASB Statement No. 123,  Accounting for
Stock-Based  Compensation,  to provide  alternative  methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.  In  addition,  this  statement  amends  the  disclosure
requirements  of Statement 123 to require  prominent  disclosures in both annual
and interim financial  statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
amendments to Statement 123 of this  statement  shall be effective for financial
statements for fiscal years ending after December 15, 2002. The adoption of this
statement had no impact on LSR's results of  operations,  financial  position or
cash flows.

In  November  2002,  the FASB issued FASB  interpretation  No. 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  including  Indirect
Guarantees of  Indebtedness  of Others".  In the normal course of business,  the
Company  does  not  issue  guarantees  to  third  parties;   accordingly,   this
interpretation has no effect on the Company's financial  statements.  In January
2003, the FASB issued FASB  Interpretation  No. 46,  "Consolidation  of Variable
Interest  Entities".  The Company has no  arrangements  that would be subject to
this interpretation.

FORWARD LOOKING STATEMENTS

Statements in this Management's  Discussion and Analysis of Financial  Condition
and  Results of  Operations,  as well as in certain  other  parts of this Annual
Report on Form 10-K (as well as information included in oral statements or other
written statements made or to be made by the Company) that look forward in time,
are forward looking  statements  made pursuant to the safe harbor  provisions of
the Private  Litigation Reform Act of 1995.  Forward looking  statements include
statements concerning plans,  objectives,  goals,  strategies,  future events or
performance,  expectations,  predictions,  and assumptions and other  statements
which are other than  statements  of  historical  facts.  Although  the  Company
believes  such  forward-looking  statements  are  reasonable,  it  can  give  no
assurance that any  forward-looking  statements  will prove to be correct.  Such
forward-looking  statements  are subject  to, and are  qualified  by,  known and
unknown risks,  uncertainties and other factors that could cause actual results,
performance or achievements to differ materially from those expressed or implied
by those statements.  These risks,  uncertainties and other factors include, but
are not limited to the Company's  ability to estimate the impact of  competition
and of industry  consolidation  and risks,  uncertainties  and other factors set
forth in the  Company's  filings with the  Securities  and Exchange  Commission,
including without limitation this Annual Report on Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

LSR is subject to market  risks  arising  from  changes  in  interest  rates and
foreign currency exchange rates.

Non-Bank Loans

The Company's $36.0 million credit facility is sterling denominated and does not
contribute to transaction gains and losses on the income statement.  Interest on
all outstanding borrowings under this credit facility is based upon LIBOR plus a
margin,  approximately  5.77% per annum for the year ended December 31, 2002. At
December 31, 2002 this credit facility was fully drawn down.

In the year ended December 31, 2002, a 1% change in LIBOR would have resulted in
a fluctuation in interest expense of $365,000.

Revenue

For the year ended  December 31, 2002,  approximately  68% of the  Company's net
revenues  were from outside the US. The Company does not engage in derivative or
hedging activities related to its potential foreign exchange exposures.

Convertible Capital Bonds

The Company's $47.6 million principal amount of Convertible Capital Bonds are US
dollar  denominated,  but are held by a non-US  subsidiary of the Company.  As a
result,  with respect to these bonds, the Company  experiences  exchange related
gains and losses which only has a non-cash  impact on the financial  statements,
based on the movement of exchange  rates.  Hence,  the Company does not take any
actions to hedge against such risks. The Company is unable to predict whether it
will experience future gains or future losses from such  exchange-related  risks
on the bonds.

See Management's  Discussion and Analysis of financial  Condition and Results of
Operations.

<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                               Page


Independent Auditors' Report                                               30

Consolidated Statements of Operations-
Years ended December 31, 2002, 2001 and 2000                               31

Consolidated Balance Sheets - December 31, 2002 and 2001                   32

Consolidated Statements of Shareholders' (Deficit)/Equity and
Comprehensive Loss - Years ended December 31, 2002, 2001 and 2000          34

Consolidated Statements of Cash Flows - Years ended
December 31, 2002, 2001 and 2000                                           35

Notes to Consolidated Financial Statements                                 36


<PAGE>


INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of Life Sciences  Research,  Inc. and
Subsidiaries, East Millstone, New Jersey

We have audited the  accompanying  consolidated  balance sheets of Life Sciences
Research,  Inc. and  Subsidiaries  (the  "Company")  as of December 31, 2002 and
2001,  and the related  consolidated  statements  of  operations,  shareholders'
(deficit)/equity  and  comprehensive  loss, and cash flows for each of the three
years in the period ended December 31, 2002. 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,  such consolidated  financial  statements present fairly, in all
material respects,  the financial  position of Life Sciences Research,  Inc. and
Subsidiaries  as of  December  31,  2002  and  2001,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2002, in conformity with accounting  principles  generally accepted
in the United States of America.

/s/ Deloitte & Touche LLP

Princeton, New Jersey
March 26, 2003

<PAGE>
<TABLE>

Life Sciences Research Inc. and Subsidiaries
Consolidated Statements of Operations
Dollars in (000's), except per share amounts
<CAPTION>

                                                                      Year Ended December 31,
                                                                  2002                  2001                2000
<S>                                                         <C>                    <C>                 <C>
Revenues                                                      $115,742               $99,206             $95,964
Cost of sales                                                 (93,403)              (84,133)            (80,740)
                                                    -------------------     -----------------     ---------------
Gross profit                                                    22,339                15,073              15,224
Selling and administrative expenses                           (18,075)              (15,966)            (15,140)
Other operating expense                                              -                 (750)                   -
                                                    -------------------     -----------------     ---------------
Operating income/(loss)                                          4,264               (1,643)                  84
Interest income                                                     66                   104                 181
Interest expense                                               (6,304)               (6,614)             (7,385)
Other income/(expense)                                           4,922               (4,471)             (5,363)
                                                    -------------------     -----------------     ---------------
Income/(loss) before income taxes                                2,948              (12,624)            (12,483)
Income tax (expense)/benefit                                     (251)                 2,996               2,720
                                                    -------------------     -----------------     ---------------
Net income/(loss)                                               $2,697              $(9,628)            $(9,763)
                                                    ===================     =================     ===============

Income/(loss) per share
 -basic                                                          $0.25               $(1.64)             $(1.68)
 -diluted                                                        $0.24               $(1.64)             $(1.68)

Weighted average number of common stock outstanding
 -basic                                                     10,678,890             5,868,421           5,824,121
 -diluted                                                   11,083,416             5,868,421           5,824,121


<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

</FN>
</TABLE>

<PAGE>
<TABLE>

Life Sciences Research Inc. & Subsidiaries
Consolidated Balance Sheets
Dollars in (000's), except per share amounts
<CAPTION>

                                                                                December 31,
ASSETS                                                                          2002             2001
<S>                                                                        <C>             <C>
Current assets:
Cash and cash equivalents                                                    $14,644           $2,240
Accounts receivable, net of allowance of $287
   and $164 in 2002 and 2001, respectively                                    20,176           18,257
Unbilled receivables                                                           9,108           13,920
Inventories                                                                    1,556            1,275
Prepaid expenses and other current assets                                      3,075            2,850
                                                                        -------------   --------------
                                                                        -------------   --------------
Total current assets                                                         $48,559          $38,542
                                                                        -------------   --------------
                                                                        -------------   --------------
Property and equipment, net                                                   94,574           90,353
Investments                                                                      248              202
Unamortized capital bonds issue costs                                            563              691
Deferred income taxes                                                          4,466            4,176
                                                                        -------------   --------------
Total assets                                                                $148,410         $133,964
                                                                        -------------   --------------
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable                                                              $8,574           $9,899
Accrued payroll and other benefits                                             1,773            2,323
Accrued expenses and other liabilities                                        12,990           10,494
Fees invoiced in advance                                                      26,066           17,722
                                                                        -------------   --------------
                                                                        -------------   --------------
Total current liabilities                                                    $49,403          $40,438
                                                                        -------------   --------------
Long-term debt                                                                83,717           59,302
Related party loans                                                              358           28,821
Pension liabilities                                                           17,712              174
Deferred income taxes                                                          5,024            9,953
                                                                        -------------   --------------
Total liabilities                                                           $156,214         $138,688
                                                                        -------------   --------------

LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)

Commitments and contingencies
Shareholders' equity/(deficit)
Voting Common Stock, $0.01 par value. Authorized: 50,000,000
Issued and outstanding at December 31, 2002: 11,932,338
(December 31, 2001: 5,870,305)                                                   119               59
Non-Voting Common Stock, $0.01 par value. Authorized: 5,000,000
Issued and outstanding: None                                                       -                -
Preferred Stock, $0.01 par value. Authorized: 5,000,000
Issued and outstanding: None                                                       -                -
Paid in capital                                                               75,098           66,035
Less: Promissory notes for issuance of common stocks                           (684)                -
Accumulated comprehensive loss, including minimum pension
liability of $(13,507) in 2002 ($0 in 2001) - deficiency on UK
defined benefit pension plan, net of                                        (18,576)          (4,360)
deferred tax
Accumulated deficit                                                         (63,761)         (66,458)
                                                                        -------------    -------------
                                                                        -------------    -------------
Total shareholders' (deficit)                                               $(7,804)         $(4,724)
                                                                        -------------    -------------
                                                                        -------------    -------------
Total liabilities and shareholders' equity/(deficit)                        $148,410         $133,964
                                                                        -------------    -------------

<FN>

The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>

<PAGE>
<TABLE>

Life Sciences Research Inc. and Subsidiaries
Consolidated Statements of Shareholders' (Deficit)/Equity and Comprehensive Loss
<CAPTION>

            (000's)               Common    Common      Promissory    Additional  Accum-ulateAccum-ulated   Total
                                  Stock      Stock      Notes for       Paid in    Deficit   Other
                                            at Par     Issuance of      Capital              Compre-hensive
                                                       Common Stock                          Loss

<S>                                <C>         <C>             <C>       <C>      <C>            <C>       <C>
Balance, January 1, 2000             5,833       $58               $-     $65,184  $(47,067)      $(3,325)  $14,850
Issue of shares                          -         -                -          88          -             -       88
Accumulated
comprehensive loss:
-  Net loss for the year                 -         -                -           -    (9,763)             -
-  Translation adjustments               -         -                -           -          -       (1,109)
Total Comprehensive Loss                                                                                    (10,872)

                                ------------------------------------------------------------------------------------
Balance, December 31, 2000           5,833       $58               $-     $65,272  $(56,830)      $(4,434)   $4,066
Issues of shares                        14         1                -          83          -             -       84
Issue of warrants (note 5)               -         -                -         680          -             -      680
Accumulated
comprehensive loss:
-  Net loss for the year                 -         -                -           -    (9,628)             -
-  Translation adjustments               -         -                -           -          -            74
Total Comprehensive Loss                                                                                    (9,554)
                                ------------------------------------------------------------------------------------
Balance, December 31, 2001           5,847       $59               $-     $66,035  $(66,458)      $(4,360) $(4,724)

Issue of Shares                      5,585        55                -       8,384          -             -    8,439
Promissory notes for issuance
of common stock                        500         5            (684)         679          -             -        -
Accumulated
comprehensive loss:
-  Net income for the year               -         -                -           -      2,697             -
-  Minimum pension                                                                                 (13,507)
   liability, net of $5,903
   tax -Deficiency on UK
   defined benefit pension
   plan, net of deferred tax             -         -                -           -          -
-  Translation                           -         -                -           -          -         (709)
   adjustments
Total Comprehensive Loss                                                                                   (11,519)

                                ------------------------------------------------------------------------------------
Balance, December 31, 2002          11,932      $119           $(684)     $75,098  $(63,761)     $(18,576) $(7,804)
                                ------------------------------------------------------------------------------------

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>

<PAGE>

<TABLE>

Life Sciences Research Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Dollars in (000's)
<CAPTION>


                                                                               Year Ended December 31,
                                                                         2002           2001          2000
<S>                                                                  <C>           <C>           <C>
Cash flows from operating activities:
Net income/(loss)                                                      $2,697       $(9,628)      $(9,763)
Adjustments to reconcile net income/(loss) to net cash from
operating activities
Depreciation                                                            8,108          8,307         9,093
Foreign exchange (gain)/loss on Capital Bonds                         (4,977)          1,272         3,713
Deferred income taxes/(benefits)                                          188        (2,996)       (2,720)
Gain on repurchase of Capital Bonds                                   (1,191)              -             -
Provision for losses on accounts receivable                               123             80           108
Amortization of capital bonds issue costs                                 191            157           163
Amortization of warrants                                                  156              -             -
Changes in operating assets and liabilities:
Accounts receivable, unbilled receivables and prepaid expenses          4,605        (8,329)       (2,909)
Inventories                                                             (127)             44         (157)
Accounts payable, accrued expenses and other liabilities              (1,728)          7,131       (2,479)
Fees invoiced in advance                                                5,988          1,898         2,337
                                                                  ------------   ------------  ------------
Net cash provided by/(used in) operating activities                   $14,033       $(2,064)      $(2,614)
                                                                  ------------   ------------  ------------
Cash flows from investing activities:
Purchase of property, plant and equipment                             (4,177)        (3,295)       (3,648)
                                                                  ------------   ------------  ------------
Net cash used in investing activities                                $(4,177)       $(3,295)      $(3,648)
                                                                  ------------   ------------  ------------
Cash flows from financing activities:
Proceeds from issue of common shares                                    6,039             84            88
Proceeds from issue of warrants                                             -            680             -
Proceeds from long-term borrowings                                        334          4,321         1,728
Repayments of long-term borrowings                                    (4,627)           (93)             -
                                                                  ------------   -----------   -----------
Net cash provided by financing activities                              $1,746         $4,992        $1,816
                                                                  ------------   ------------  ------------
Effect of exchange rate changes on cash and cash equivalents              802          (679)         (743)
                                                                  ------------   ------------  ------------
Increase/(decrease) in cash and cash equivalents                       12,404        (1,046)       (5,189)
Cash and cash equivalents at beginning of year                          2,240          3,286         8,475
                                                                  ------------   ------------  ------------
Cash and cash equivalents at end of year                              $14,644         $2,240        $3,286
                                                                  ------------   ------------  ------------
                                                                  ------------   ------------  ------------
Supplementary disclosures:
Interest paid                                                        $(6,110)       $(6,267)      $(6,797)

Non-cash transactions:
Conversion of debt to equity                                           $2,400             $-            $-
Issuance of common stocks for promissory notes                           $684             $-            $-

<FN>

The  accompanying  notes are an integral  part of these  consolidated  financial
statement.
</FN>
</TABLE>

<PAGE>

Life Sciences Research Inc. and Subsidiaries
Notes to Consolidated Financial Statements December 31, 2002, 2001 and 2000

1.       THE COMPANY AND ITS OPERATIONS

Life  Sciences  Research  Inc.  ("LSR")  and  subsidiaries  (collectively,   the
"Company")  is a leading  contract  research  organization,  offering  worldwide
pre-clinical and non-clinical  testing for biological safety evaluation research
services to pharmaceutical,  biotechnology, agrochemical and industrial chemical
companies.  The Company  serves the rapidly  evolving  regulatory and commercial
requirements to perform safety evaluations on new  pharmaceutical  compounds and
chemical  compounds  contained  within the products that man uses,  eats, and is
otherwise exposed to. In addition,  it tests the effect of such compounds on the
environment  and also  performs  work on  assessing  the safety and  efficacy of
veterinary products.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies, is set out below:

Basis of Presentation

These  financial  statements  are  prepared in  conformity  with the  accounting
principles generally accepted in the United States of America ("US GAAP"). Under
US GAAP, the  company  whose  stockholders  retain  the majority  interest  in a
combined  business  must be treated as the  acquirer  for  accounting  purposes.
Accordingly,  the Exchange Offer is accounted for as a "reverse acquisition" for
financial  reporting  purposes.  The  reverse  acquisition  is  deemed a capital
transaction   and  the  net  assets  of  Huntingdon   Life  Sciences  Group  plc
("Huntingdon")  (the accounting  acquirer) are carried forward to LSR (the legal
acquirer  and  the  reporting   entity)  at  their  carrying  value  before  the
combination.  Although Huntingdon was deemed to be the acquiring corporation for
financial  accounting  and  reporting  purposes,  the legal status of LSR as the
surviving corporation does not change. The relevant acquisition process utilizes
the capital  structure of LSR and the assets and  liabilities  of Huntingdon are
recorded at historical  cost. In these financial  statements,  Huntingdon is the
operating entity for financial  reporting purposes and the financial  statements
for all periods presented represent  Huntingdon's financial position and results
of  operations.  The  equity  of LSR is the  historical  equity  of  Huntingdon,
retroactively  restated to reflect the number of shares  issued in the  Exchange
Offer.  Certain  reclassifications  and  eliminations  have been recorded in the
current year presentation to retroactively consolidate Huntingdon and LSR.

Principles of consolidation

The consolidated  financial statements  incorporate the accounts of LSR and each
of its  subsidiaries.  All  inter-company  balances  have been  eliminated  upon
consolidation.

Cash and cash equivalents

Cash and cash equivalents include all highly liquid investments with an original
maturity  date of three  months  or less at the  date of  purchase  and  consist
principally of amounts temporarily invested in money market funds.

Inventories

Inventories  are valued on a FIFO  (first-in,  first out) method at the lower of
cost, or market value. They comprise materials and supplies.

Property and Equipment

Property and equipment, stated at cost, is depreciated over the estimated useful
lives of the assets on a  straight-line  basis.  Estimated  useful  lives are as
follows:

         Buildings and facilities            15 - 50 years
         Plant and equipment                 4 - 25 years
         Vehicles                            5 years
         Computers and software              3 - 5 years

Income Taxes

The Company  accounts  for income  taxes under the  provisions  of SFAS No. 109,
"Accounting  For Income Taxes" ("SFAS 109").  SFAS 109 requires  recognition  of
deferred tax assets and liabilities for the estimated future tax consequences of
events  attributable  to differences  between the financial  statement  carrying
amounts of existing assets and  liabilities  and their  respective tax bases and
operating  loss  and  tax  credit  carry  forwards.   Deferred  tax  assets  and
liabilities are measured using enacted rates in effect for the year in which the
differences are expected to be recovered or settled.  The effect on deferred tax
assets and liabilities of changes in tax rates is recognized in the statement of
operations  in the period in which the  enactment  date  changes.  Deferred  tax
assets and  liabilities  are reduced  through the  establishment  of a valuation
allowance at such time as, based on available  evidence,  it is more likely than
not that the deferred tax assets will not be realized.

Revenue recognition

The majority of the  Company's  net revenues  have been earned under  contracts,
which generally range in duration from a few months to three years. Revenue from
these  contracts is  recognized  over the term of the  contracts as services are
rendered.  Contracts may contain  provisions for  renegotiation  in the event of
cost  overruns due to changes in the level of work scope.  Renegotiated  amounts
are included in net revenue when earned and  realization is assured.  Provisions
for losses to be incurred on contracts  are  recognized in full in the period in
which  it is  determined  that  a  loss  will  result  from  performance  of the
contractual arrangement.  Most service contracts may be terminated for a variety
of reasons by the Company's  customers  either  immediately  or upon notice at a
future date. The contracts  generally require payments to the Company to recover
costs  incurred,  including  costs to wind down the study,  and  payment of fees
earned to date,  and in some cases to provide the Company  with a portion of the
fees or profits  that would have been earned under the contract had the contract
not been  terminated  early.  Unbilled  receivables  are  recorded  for  revenue
recognized  to date that is currently  not billable to the customer  pursuant to
contractual  terms. In general,  amounts become billable upon the achievement of
certain  aspects of the contract or in  accordance  with  predetermined  payment
schedules.  Unbilled  receivables are billable to customers within one year from
the  respective  balance  sheet date.  Fees in advance are  recorded for amounts
billed to customers  for which  revenue has not been  recognized  at the balance
sheet date (such as upfront payments upon contract  authorization,  but prior to
the actual commencement of the study).

Foreign currencies

Transactions in currencies other than the functional  currency of the entity are
recorded  at the  rates of  exchange  at the date of the  transaction.  Monetary
assets and  liabilities  in currencies  other than the  functional  currency are
translated  at the rates of exchange  at the balance  sheet date and the related
transaction  gains and losses are  reported  in the  statements  of  operations.
Exchange gains and losses on foreign currency transactions are recorded as other
income  or  expense.  Certain  intercompany  loans  are  determined  to  be of a
long-term   investment  nature.  The  Company  records  gains  and  losses  from
remeasuring such loans as a component of other comprehensive income.

Upon  consolidation,  the results of operations of  subsidiaries  and associates
whose  functional  currency is other than the US dollar are  translated  into US
dollars at the average  exchange rate and assets and  liabilities are translated
at year-end exchange rates and shareholders'  equity is translated at historical
exchange rate. Translation  adjustments are presented as a separate component of
other accumulated comprehensive loss in the financial statements.

Leased assets

Assets  held under the terms of capital  leases are  included  in  property  and
equipment and are  depreciated on a  straight-line  basis over the lesser of the
useful life of the asset or the term of the lease.  Obligations for future lease
payments, less attributable finance charges are shown within liabilities and are
analyzed between amounts falling due within and after one year.  Operating lease
rentals are charged to the Consolidated Statement of Operations as incurred.

Pension costs

During the year the Company had a defined  benefit  pension plan and two defined
contribution  plans. One of the defined  contribution plans covers all employees
in the US; the other, those employees in the UK not eligible to join the defined
benefit plan. The defined  benefit  pension plan provided  benefits to employees
based on their final  pensionable  salary.  As of December 31, 2002, the defined
benefit pension plan was curtailed. The gain on curtailment is recognized in the
Statement of Operations  according to SFAS No. 88,  "Employees'  Accounting  for
Settlements  and   Curtailments  of  Deferred   Benefit  Pension  Plan  and  for
Termination  Benefits".  The  pension  cost  of the  plan  is  accounted  for in
accordance  with SFAS No. 87,  "Employers'  Accounting  For  Pensions".  Pension
information  is  presented  in  accordance   with  SFAS  No.  132,   "Employers'
Disclosures About Pensions And Other Post Retirement Benefits". The net asset at
transition,  prior  service cost and net  (loss)/gain  subject to  amortization,
outside the corridor,  are being amortized on a straight-line basis over periods
of 15 years,  10 years and 10 years  respectively.  The Company  recognized  all
actuarial  gains and losses  immediately for the purposes of its minimum pension
liability.

Use of estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the dates of the financial
statements and the results of operations during the reporting periods.  Although
these estimates are based upon management's best knowledge of current events and
actions, actual results could differ from those estimates.

Income/(loss) per share

Income/(loss)  per share is computed in accordance with SFAS No. 128,  "Earnings
Per  Share".   Basic  income/(loss)  per  share  is  computed  by  dividing  net
income/(loss) available to common stockholders by the weighted average number of
common  shares   outstanding   during  the  year.  The  computation  of  diluted
income/(loss) per share is similar to the computation of basic income/(loss) per
share,  except  that the  denominator  is  increased  to  include  the number of
additional  common  shares  that would  have been  outstanding  if the  dilutive
potential  common  shares  had been  issued.  Diluted  income/(loss)  per  share
reflects the  potential  dilution  that could occur if dilutive  securities  and
other  contracts to issue common stock were  exercised or converted  into common
shares or  resulted  in the  issuance  of common  shares that then shared in the
losses of the Company.

Segment analysis

In  accordance  with the  Statement of Financial  Accounting  Standards No. 131,
"Disclosures  About  Segments of an Enterprise  and Related  Information"  (SFAS
131), the Company  discloses  financial and  descriptive  information  about its
reportable   operating  segments.   Operating  segments  are  components  of  an
enterprise about which separate financial information is available and regularly
evaluated  by the chief  operating  decision  maker in deciding  how to allocate
resources and in assessing performance.

Loans and Warrants

In  accordance  with  Accounting   Principles   Board  ("APB")  Opinion  No.  14
"Accounting for Convertible Debt and Debt issued with Share Purchase  Warrants",
loans and warrants are recorded at their pro-rata fair values in relation to the
proceeds  received with the portion  allowable to the warrants  accounted for as
paid-in-capital.  The costs of raising long-term financing are capitalized as an
asset and are amortized,  using the effective interest method,  over the term of
the debt.

Stock-based compensation

The  Company  accounts  for  its  stock  option  and  stock-based   compensation
arrangements plans using the intrinsic-value  method.  Under the intrinsic value
method,  the difference between the amount the employee will pay the Company for
stock acquired under the Company's incentive plans and the stock's fair value on
the date of grant Is charged to expense.  Since  employees  must pay the Company
the grant date fair value for stock  options,  no expense is recorded  for stock
options. Alternatively, since employees do not pay for stock issued for deferred
stock units granted, their grant date fair value is recorded as expense.

The following  table  reconciles net income and earnings per common stock (EPS),
as reported, to pro forma net income and EPS, as if the Company had expensed the
grant  date  fair  value of both  stock  options  and  deferred  stock  units as
permitted  by SFAS No. 123,  "Accounting  for Stock Based  Compensation"  ("SFAS
123").  These pro forma amounts may not be  representative of the initial impact
of  adopting  SFAS 123 since,  as  amended,  it permits  alternative  methods of
adoption.
<TABLE>
<CAPTION>

                                                    Year ended              Year Ended        Year Ended December
                                                 December 31, 2002      December 31, 2001          31, 2000
                                              ------------------------ --------------------- ----------------------
<S>                         <C>                   <C>                  <C>                    <C>
                                                       $000                    $000                  $000
Net income/(loss)            As Reported              $2,697                 $(9,628)              $(9,763)
Less: Pro forma expense as
if stock options were
charged against net
income, net of tax
                                                       (59)                  (1,108)                (1,573)

                             Pro forma                 2,638                 (10,736)              (11,336)
Basic and Diluted EPS:       As Reported          $0.25 and $0.24      $(1.64) and $(1.64)    $(1.68) and $(1.68)
                             Pro forma            $0.25 and $0.24      $(1.83) and $(1.83)    $(1.95) and $(1.95)

</TABLE>

The weighted  average fair value of options  granted in 2002 was  $728,419.  The
options granted prior to that are considered to have no value. These fair values
were  estimated  using  the  Black-Scholes  option-pricing  model,  based on the
following assumptions:

                                                     2002
Dividend yield                                       0%
Volatility                                           40%
Risk-free interest rate                              3.72%
Expected term of options (in years)                  10 years

New accounting standards

In July 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
141 "Business Combinations." ("SFAS 141"). SFAS 141 requires the purchase method
of  accounting  for  business  combinations  initiated  after June 30,  2001 and
eliminates  the  pooling-of-interests  method.  The  adoption of SFAS 141 had no
impact on LSR's results of operations, financial position or cash flows.

In July 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets".  This  statement  applies to  intangibles  and goodwill  acquired after
September 30, 2001,  as well as goodwill and  intangibles  previously  acquired.
Under this statement,  goodwill as well as other intangibles  determined to have
an  infinite  life will no longer be  amortized;  however  these  assets will be
reviewed for  impairment on a periodic  basis.  This statement was effective for
LSR for the first  quarter  of the fiscal  year ended  December  31,  2002.  The
adoption  of this  statement  had no  impact  on LSR's  results  of  operations,
financial position or cash flows.

In August 2001, the FASB issued SFAS No. 143,  "Accounting for Asset  Retirement
Obligations" ("SFAS 143"). This statement is effective for financial  statements
issued for fiscal years  beginning on or after June 15, 2002.  SFAS 143 requires
entities  to  record  the fair  value  of a  liability  for an asset  retirement
obligation in the period in which it is incurred.  When a liability is initially
recorded, the entity capitalizes a cost by increasing the carrying amount of the
related  long-lived  asset.  Over time, the liability is accreted to its present
value each period,  and the capitalized cost is depreciated over the useful life
of the related asset. Upon settlement of the liability, an entity either settles
the obligation for its recorded amount or incurs a gain or loss upon settlement.
LSR does not believe  that the adoption of this  statement  will have a material
impact on LSR's results of operations, financial position or cash flows.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of  Long-Lived  Assets".  This  statement is effective for fiscal years
beginning after December 15, 2001 and interim periods within those fiscal years.
These new rules on asset impairment  supersede SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" and
portions  of  APB  Opinion  30  ("Opinion   30"),   "Reporting  the  Results  of
Operations".  This statement  provides a single  accounting model for long-lived
assets to be disposed of and significantly  changes the criteria that would have
to be met to classify an asset as held-for-sale. Classification as held-for-sale
is an important distinction since such assets are not depreciated and are stated
at the lower of fair value or carrying  amount.  This  statement  also  requires
expected future operating losses from discontinued operations to be displayed in
the  period(s)  in  which  the  losses  are  incurred,  rather  than  as of  the
measurement  date as presently  required.  The adoption of this statement had no
impact on LSR's results of operations, financial position or cash flows.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4, 44, and 64,  Amendment of FASB  Statement No. 13, and Technical  Corrections"
("SFAS 145").  This statement is effective  fiscal years beginning after May 15,
2002.  SFAS  145  rescinds  SFAS  No.  4,  "Reporting   Gains  and  Losses  from
Extinguishment  of Debt"  ("SFAS 4"),  which  required all gains and losses from
extinguishment  of debt to be  aggregated  and, if  material,  classified  as an
extraordinary  item, net of related income tax effect. As a result, the criteria
in Opinion 30 will now be used to classify those gains and losses. SFAS 145 also
amends  Statement  13 to require  that  certain  lease  modifications  that have
economic effects similar to sale-leaseback  transactions be accounted for in the
same  manner as  sale-leaseback  transactions.  The  Company  early  adopted the
provisions of this  statement  resulting in the inclusion of a $1.2 million gain
in other income/(expense) in 2002.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with  Exit or  Disposal  Activities"  ("SFAS  146").  SFAS 146  requires  that a
liability for a cost associated with an exit or disposal  activity be recognized
when  the  liability  is  incurred.  SFAS  146  eliminates  the  definition  and
requirement  for  recognition of exit costs in Emerging Issues Task Force (EITF)
Issue No. 94-3 where a liability for an exit costs was recognized at the date of
an entity's  commitment to an exit plan. This statement is effective for exit or
disposal activities initiated after December 31, 2002. LSR does not believe that
the  adoption of this  statement  will have a material  impact on its results of
operations, financial position or cash flows.

In June 2002, the FASB issued  Statement No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure,  an amendment of FASB Statement No.
123" ("SFAS 148"). This statement amends FASB Statement No. 123,  Accounting for
Stock-Based  Compensation,  to provide  alternative  methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.  In  addition,  this  statement  amends  the  disclosure
requirements  of Statement 123 to require  prominent  disclosures in both annual
and interim financial  statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
amendments to Statement 123 of this  statement  shall be effective for financial
statements for fiscal years ending after December 15, 2002. The adoption of this
statement had no impact on LSR's results of  operations,  financial  position or
cash flows.

In  November  2002,  the FASB issued FASB  interpretation  No. 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  including  Indirect
Guarantees of  Indebtedness  of Others".  In the normal course of business,  the
Company  does  not  issue  guarantees  to  third  parties;   accordingly,   this
interpretation has no effect on the Company's financial statements.

In January 2003, the FASB issued FASB  Interpretation No. 46,  "Consolidation of
Variable  Interest  Entities".  The  Company has no  arrangements  that would be
subject to this interpretation.

3.       PROPERTY AND EQUIPMENT

Property and equipment as of December 31 consisted of the following:
<TABLE>
<CAPTION>

                                                                  2002                 2001
                                                                  $000                 $000
<S>                                                         <C>                    <C>
Property and equipment at cost:
Building and facilities                                        105,635               95,967
Plant, equipment, vehicles, computers and software              93,686               87,518
Assets in the course of construction                                47                  283
                                                        ---------------       --------------
                                                               199,368              183,768
Less: Accumulated depreciation                               (104,794)             (93,415)
                                                        ---------------       --------------
Property and equipment, net                                    $94,574              $90,353
                                                        ---------------       --------------

</TABLE>
Depreciation expense aggregated $8,108,000, $8,307,000, and $9,093,000 for 2002,
2001 and 2000 respectively.

The net book value of assets held under capital  leases and included above is as
follows:
                                   Cost       Depreciation   Net book
                                                               Value
                                   $000          $000          $000
At December 31, 2002                848          362            486
At December 31, 2001                514          198            316


4.       INCOME TAXES

The components of income/(loss)  before taxes and the related  (expense)/benefit
for tax for the years ended December 31 are as follows:
<TABLE>
<CAPTION>

Income/(loss) before taxes                                      2002             2001              2000
                                                                $000             $000              $000
<S>                                                          <C>            <C>               <C>
United Kingdom                                                 4,110         (11,036)          (14,182)
United States                                                 (1,162)          (1,588)             1,699
                                                           -------------    -------------     -------------
                                                               $2,948        $(12,624)         $(12,483)
                                                           -------------    -------------     -------------

The (expense)/benefit for income taxes by location               2002             2001             2000
of the taxing jurisdiction for the years ended                   $000             $000             $000
December 31, consisted of the following:
Current Taxation:
-        State Taxes - US                                        (63)                 -                -
Deferred taxation:
-        United Kingdom                                          (45)             2,886            3,108
-        United States                                          (143)               110            (388)
                                                           -------------     -------------    -------------
                                                               $(251)            $2,996           $2,720
                                                          -------------     -------------    -------------

</TABLE>

Reconciliation  between  the US  statutory  rate  and the  effective  rate is as
follows:

                                     % of income/(loss) before income
                                                   taxes
                                           2002        2001        2000
                                              %           %           %
US statutory rate                            35        (35)        (35)
Foreign rate differential                   (9)           6           5
Non-deductible items including
   foreign exchange loss                   (31)           3           4
State taxes                                   2           -           -
Prior year adjustments                       11           -           4
                                    ------------  ----------  ----------
Effective tax rate                            8        (26)        (22)
                                    ------------  ----------  ----------

The tax effects of temporary  differences that give rise to significant portions
of deferred tax assets and liabilities as of December 31 are as follows:

                                                            2002           2001
                                                            $000           $000
Current deferred tax assets:
Accrued liabilities                                            -             73
                                                       ----------     ----------
                                                              $-            $73
                                                       ----------     ----------
Non-current deferred tax assets:
Net operating losses - US                                  4,466          4,176
Net operating losses - UK                                 12,576         12,295
Net pension plan minimum liability adjustment - UK         5,789              -
Capital losses - UK                                       13,729         12,411
Valuation allowance - UK                                (13,729)       (12,411)
                                                       ----------     ----------
Net non-current deferred tax assets                      $22,831        $16,471
                                                       ----------     ----------


Non-current deferred tax liabilities:
Property and equipment                                    23,389         22,248
                                                       ----------     ----------
Total                                                    $23,389        $22,248
                                                       ----------     ----------
Net current deferred tax assets                              $ -            $73
Net non-current deferred tax assets                       $4,466         $4,176

Net non-current deferred tax liabilities                  $5,024         $9,953

In  accordance  with SFAS No. 109, the Company nets all current and  non-current
assets and liabilities by tax jurisdiction.

Of the gross amount of net operating losses in the US of $11,165,000, $3,954,000
expires in 2017, $6,163,000 expires in 2018, and $1,048,000 expires in 2021. The
gross  amount  of  net  operating  losses  in  the UK of  $41,920,000,  have  no
expiration  date. The Company has not provided a valuation  allowance on the net
operating  loss carry  forwards  because it believes that it is more likely than
not that those  amounts  will be  realized  through  taxable  income from future
operations.  A full valuation  allowance has been recorded for the total benefit
of capital  losses  incurred in prior years,  as the Company does not anticipate
that  the  benefit  will be  realized  in the  foreseeable  future  through  the
recognition of capital gains.

5.       LONG-TERM DEBT AND RELATED PARTY LOANS

                                              2002                      2001
                                              $000                      $000
Bank loans                                       -                     9,192
Non bank loans                              36,027                         -
Capital leases                                 100                       110
Convertible Capital Bonds                   47,590                    50,000
                                  -----------------           ---------------
                                            83,717                    59,302
Related party loans                            358                    28,821
                                  -----------------           ---------------
                                  -----------------           ---------------
                                           $84,075                   $88,123
                                  -----------------           ---------------

Bank Loans and Non-Bank Loans

On January 20, 2001, the Company's  non-bank loan of (pound)22.4  million ($36.0
million  approximately),  was  refinanced  by  Stephens'  Group  Inc.  and other
parties.  It is now repayable on June 30, 2006 and interest is payable quarterly
at LIBOR plus  1.75%.  At the same time the  Company  was  required  to take all
reasonable   steps  to  sell  off  such  of  its  real  estate  assets   through
sale/leaseback  transactions  and/or obtaining mortgage financing secured by the
Company's  real estate assets to discharge  this loan. The Company is taking all
reasonable steps to conduct these  transactions.  The loan is held by Huntingdon
Life  Sciences  Group plc and is secured by the  guarantees  of the wholly owned
subsidiaries  of the Company  including,  Huntingdon  Life  Sciences  Group plc,
Huntingdon   Life  Sciences  Ltd  and   Huntingdon   Life  Sciences   Inc.,  and
collateralized  by all the assets of these  companies.  The loan was transferred
from  Stephens  Group Inc. to an unrelated  third party  effective  February 11,
2002.

On October 9, 2001, on behalf of  Huntingdon,  LSR issued to Stephens Group Inc.
warrants  to  purchase  up to  704,425  shares of LSR Voting  Common  Stock at a
purchase price of $1.50 per share.  The LSR warrants are exercisable at any time
and will expire on October 9, 2011.  These  warrants  arose out of  negotiations
regarding  the  refinancing  of the bank loan by the  Stephens  Group  Inc.,  in
January 2001. In accordance with APB Opinion No. 14,  Accounting for Convertible
Debt and Debt Issued with Stock  Purchase  Warrants ("APB 14") the warrants were
recorded at their pro rata fair values in relation to the  proceeds  received on
the date of issuance and treated as a debt  discount.  The value of the warrants
was $430,000.  The warrants were subsequently  transferred to an unrelated third
party.

Convertible Capital Bonds

The remainder of the Company's  long term  financing is provided by  Convertible
Capital  Bonds  repayable in September  2006.  At the time of the issue in 1991,
these bonds were for $50 million par. They carry  interest at a rate of 7.5% per
annum,  payable  biannually  in March and  September.  During 2002,  the Company
repurchased and cancelled $2,410,000 principal amount of such bonds resulting in
a $1.2 million  gain  recorded in other  income/expense.  In January  2003,  the
Company further  repurchased  and cancelled  $945,000  principal  amount of such
bonds resulting in a gain of $0.5 million.  At the current  conversion rate, the
number of shares of Voting Common Stock to be issued on conversion  and exchange
of each unit of $10,000  comprised in a Bond would be 49. The conversion rate is
subject to adjustment in certain circumstances.

Related Party Loans

Other financing has been provided by a $2.9 million loan facility made available
on  September  25,  2000 by a  director,  Mr.  Baker.  In  connection  with this
financing, the company authorized, subject to shareholder approval, the issuance
of warrants to purchase  410,914  shares of LSR Voting  Common Stock at purchase
price of $1.50  per  share to FHP,  a  company  controlled  by Mr.  Baker.  Such
shareholder approval was granted on June 12, 2002. Additionally, other financing
also  includes  a $2.8  million  facility  from the  Stephens  Group  Inc.  made
available on July 19, 2001.  Effective February 11, 2002 the Stephens Group Inc.
debt was  transferred to an unrelated  third party.  Both  facilities  have been
fully drawn down.  $550,000 of the loan from Mr.  Baker was  transferred  to and
assumed by FHP in March 2001.  These loans from Mr. Baker and FHP are  repayable
on demand  although they are  subordinated  to the bank debt, they are unsecured
and interest is payable  monthly at a rate of 10% per annum.  On March 28, 2002,
$2.1 million of Mr.  Baker's loan was  converted  into  1,400,000  shares of LSR
Voting Common Stock and $300,000 of FHP's loan was converted into 200,000 shares
of LSR Voting Common Stock;  in each case as part of LSR's private  placement of
approximately  5.1 million  shares of Voting Common  Stock.  As a result of such
conversions,  $302,000 remains payable to Mr. Baker and $250,000 remains payable
to FHP. Net of warrants, as discussed below, the corresponding amount payable on
the FHP loan is $56,000.  The former  Stephens  Group Inc.  secured  facility is
subordinated to the bank loan. Interest was payable monthly at a rate of 10% per
annum. With the consent of the bank lender,  one half of the facility was repaid
on July 1, 2002, and the remainder was repaid on October 1, 2002.

As noted  above,  on June 11, 2002 LSR issued to FHP  warrants to purchase up to
410,914  shares of LSR  Voting  Common  Stock at a  purchase  price of $1.50 per
share.  The LSR warrants are exercisable at any time and will expire on June 11,
2012.  These warrants arose out of  negotiations  regarding the provision of the
$2.9 million loan facility  made  available to the Company on September 25, 2000
by Mr. Baker,  who controls FHP. In accordance with APB 14 the loan and warrants
were  recorded  at their  pro rata  fair  values  in  relation  to the  proceeds
received. As a result, the value of the warrants was $250,000.

6.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The  Company's   principal   financial   instruments   comprise  cash  and  cash
equivalents,  accounts receivables, unbilled receivables and long-term debt. The
Company does not hold financial instruments for trading purposes.

The estimated fair value of the Company's  financial  instruments as of December
31, 2002 and 2001 is summarized  below.  Certain  estimates  and judgments  were
required to develop the fair value  amounts.  The fair value amounts shown below
are not  necessarily  indicative  of the amounts that the Company  would realize
upon disposition nor do they indicate the Company's intent or ability to dispose
of the financial instrument.
<TABLE>
<CAPTION>
                                                                    2002                          2001
                                                             Carrying       Estimated        Carrying    Estimated
                                                                Value      Fair Value           Value   Fair Value
                                                                 $000            $000            $000         $000
<S>                                                          <C>              <C>             <C>          <C>
Primary financial instruments held or
issued to finance the Company's operations:
Cash and cash equivalents                                      14,644          14,644           2,240        2,240
Accounts receivable                                            20,176          20,176          18,257       18,257
Capital leases - short-term                                       225             225             158          158
Accounts payable                                                8,574           8,574           9,899        9,899
Fees invoiced in advance                                       26,066          26,066          17,722       17,722
Long-term debt (excluding the Convertible Capital
Bond)                                                          36,485          36,485          38,123       38,123
Convertible Capital Bond                                       47,590          23,500          50,000       17,000

</TABLE>

The following methods and assumptions were used by the Company in estimating its
fair value disclosure for financial instruments:

Cash and cash  equivalents,  capital leases - short term,  accounts  payable and
fees  invoiced  in  advance:   The  estimated  fair  value  of  these  financial
instruments approximates their carrying values due to their short maturities.

Accounts  receivables:  The estimated fair value of these financial  instruments
approximates  their  carrying  value  due to their  short  maturities,  less any
provision for bad debt.

Long-term debt: The carrying value of these financial  instruments  approximates
to the fair value due to their variable interest rates.

Convertible Capital Bond: The estimates fair values of the Company's Convertible
Capital Bond is based on market prices at year-end.

7.       OTHER INCOME/(EXPENSE)
<TABLE>
<CAPTION>

                                                                2002           2001           2000
                                                                $000           $000           $000

<S>                                                         <C>           <C>             <C>
    Exchange gain/(loss) on capital bonds                      4,977        (1,386)        (3,544)
    Gain on partial repurchase of Capital Bonds                1,191              -              -
    Exchange offer costs                                     (1,246)        (2,868)              -
    Refinancing costs                                              -          (217)        (1,819)
                                                      ---------------    -----------    -----------
                                                              $4,922       $(4,471)       $(5,363)
                                                      ---------------    -----------    -----------
</TABLE>

8.       COMMITMENTS AND CONTINGENCIES

Operating leases

Operating lease expenses were as follows:
                                       2002        2001        2000
                                       $000        $000        $000
Plant and equipment                     904        924         1184
Other operating leases                  392        127          69

The Company has commitments payable under operating leases as follows:

                   Year ended December 31                    $000

                    2003                                       956
                    2004                                       417
                    2005                                        95
                    2006                                        51
                    2007                                         1
                                                  -----------------
                                                            $1,520
                                                  -----------------
Capital Leases
                                                             $000
                    2003                                      225
                    2004                                      100
                                                  ------------------
                                                             $325
                                                  ------------------

Contingencies

The Company is party to certain legal  actions  arising out of the normal course
of its  business.  In  management's  opinion,  none of these actions will have a
material effect on the Company's  operations,  financial condition or liquidity.
No  form  of  proceedings  has  been  brought,  instigated  or  is  known  to be
contemplated against the Company by any government agency.

9.       SHAREHOLDERS' EQUITY

Common Stock

As of December 31, 2002 and 2001, LSR had 11,932,338 and 5,870,305 respectively,
of Voting Common Stock of par value of $0.01 each.

Warrants issued in conjunction with long-term debt and related party loans

On October 9, 2001, on behalf of  Huntingdon,  LSR issued to Stephens Group Inc.
warrants  to  purchase  up to  704,425  shares of LSR Voting  Common  Stock at a
purchase price of $1.50 per share.  The LSR warrants are exercisable at any time
and will expire on October 9, 2011.  These  warrants  arose out of  negotiations
regarding  the  refinancing  of the bank loan by the  Stephens  Group  Inc.,  in
January 2001. In accordance with APB Opinion No. 14,  Accounting for Convertible
Debt and Debt Issued with Stock  Purchase  Warrants ("APB 14") the warrants were
recorded at their pro rata fair values in relation to the  proceeds  received on
the date of issuance.  As a result, the value of the warrants was $430,000.  The
warrants were subsequently transferred to an unrelated third party.

On June 11, 2002 LSR issued to FHP warrants to purchase up to 410,914  shares of
LSR Voting Common Stock at a purchase price of $1.50 per share. The LSR warrants
are  exercisable at any time and will expire on October 9, 2011.  These warrants
arose out of  negotiations  regarding  the  provision  of the $2.9  million loan
facility made  available to the Company on September 25, 2000 by Mr. Baker,  who
controls FHP. In  accordance  with APB 14 the loan and warrants were recorded at
their pro rata fair values in relation to the  proceeds  received.  As a result,
the value of the warrants was $250,000.

Share option plans

LSR 2001 Equity Incentive Plan (the "LSR 2001 Equity Incentive Plan")

The LSR 2001  Equity  Incentive  Plan was  adopted  effective  October  4, 2001.
Adoption  of the LSR 2001  Equity  Incentive  Plan will  enable LSR to use stock
options  (and  other  stock-based  awards)  as a means to  attract,  retain  and
motivate key personnel.  This stock option plan was approved by the shareholders
of LSR, prior to the acquisition of Huntingdon.

Awards  under the LSR 2001 Equity  Incentive  Plan may be granted by a committee
designated  by the LSR  Board  pursuant  to the  terms  of the LSR  2001  Equity
Incentive  Plan  (which  has  designated  the  Compensation  Committee  for such
purpose) and may include:  (i) options to purchase  shares of LSR Voting  Common
Stock,  including incentive stock options ("ISOs"),  non-qualified stock options
or both; (ii) stock  appreciation  rights ("SARs"),  whether in conjunction with
the grant of stock options or independent of such grant,  or stock  appreciation
rights  that are only  exercisable  in the event of a change in  control or upon
other events;  (iii)  restricted  stock consisting of shares that are subject to
forfeiture based on the failure to satisfy employment-related restrictions; (iv)
deferred stock, representing the right to receive shares of stock in the future;
(v)  bonus  stock  and  awards  in  lieu  of cash  compensation;  (vi)  dividend
equivalents,  consisting  of a right to receive  cash,  other  awards,  or other
property equal in value to dividends paid with respect to a specified  number of
shares of LSR Voting  Common Stock or other  periodic  payments;  or (vii) other
awards not  otherwise  provided for, the value of which are based in whole or in
part upon the value of the LSR Voting Common Stock. Awards granted under the LSR
2001 Equity  Incentive Plan are generally not assignable or transferable  except
pursuant to a will and by operation of law.

The flexible terms of the LSR 2001 Equity  Incentive Plan are intended to, among
other things, permit the stock option committee to impose performance conditions
with respect to any award,  thereby  requiring  forfeiture of all or part of any
award  if   performance   objectives   are  not  met  or  linking  the  time  of
exercisability  or  settlement  of an award  to the  attainment  of  performance
conditions.  For awards intended to qualify as "performance-based  compensation"
within the meaning of Section 162 (m) of the United States Internal Revenue Code
such  performance  objectives  shall be based  solely  on (i)  annual  return on
capital;  (ii) annual  earnings or earnings  per share;  (iii)  annual cash flow
provided by operations; (iv) changes in annual revenues; (v) stock price; and/or
(vi) strategic business criteria,  consisting of one or more objectives based on
meeting specified revenue,  market  penetration,  geographic  business expansion
goals, cost targets, and goals relating to acquisitions or divestitures.

LSR's  Compensation  Committee,  which administers the 2001 LSR Equity Incentive
Plan,  has the  authority,  among other  things,  to: (i) select the  directors,
officers and other  employees and  independent  contractors  entitled to receive
awards under the 2001 LSR Equity  Incentive  Plan;  (ii)  determine  the form of
awards,  or combinations of awards,  and whether such awards are to operate on a
tandem basis or in conjunction with other awards;  (iii) determine the number of
shares of LSR Voting  Common Stock or units or rights  covered by an award;  and
(iv) determine the terms and conditions of any awards granted under the 2001 LSR
Equity  Incentive Plan,  including any  restrictions or limitations on transfer,
any vesting schedules or the acceleration of vesting  schedules,  any forfeiture
provision or waiver of the same and including any terms and conditions necessary
or desirable to ensure the optimal tax result for  participating  personnel  and
the  Company  including  by way of example to ensure that there is no tax on the
grant of the rights and that such tax only  arises on the  exercise of rights or
otherwise when the LSR Voting Common Stock  unconditionally  vests and is at the
disposal of such participating  personnel. The exercise price at which shares of
LSR Voting Common Stock may be purchased  pursuant to the grant of stock options
under the 2001 LSR Equity Incentive Plan is to be determined by the Compensation
Committee at the time of grant in its discretion,  which discretion includes the
ability  to set an  exercise  price that is below the fair  market  value of the
shares of LSR Voting Common Stock covered by such grant at the time of grant.

The  number  of  shares  of LSR  Voting  Common  Stock  that may be  subject  to
outstanding  awards granted under the 2001 LSR Equity Incentive Plan (determined
immediately  after the grant of any  award),  may not  exceed 20  percent of the
aggregate number of shares of LSR Voting Common Stock then outstanding.

The  2001  LSR  Equity  Incentive  Plan  may  be  amended,  altered,  suspended,
discontinued,  or  terminated  by the LSR Board  without LSR Common  Stockholder
approval  unless such  approval is  required by law or  regulation  or under the
rules of any stock  exchange or automated  quotation  system on which LSR Voting
Common Stock is then listed or quoted.  Thus,  LSR Common  Stockholder  approval
will not necessarily be required for  amendments,  which might increase the cost
of the plan or broaden eligibility.  LSR Common Stockholder approval will not be
deemed to be required  under laws or regulations  that  condition  favorable tax
treatment on such approval,  although the LSR Board may, in its discretion, seek
LSR Common  Stockholder  approval  in any  circumstances  in which it deems such
approval advisable.

LSR made  grants  under the LSR 2001 Equity  Incentive  Plan on March 1, 2002 to
certain directors as of that date, and employees,  including the Named Executive
Officers:

Grants to Directors
Name                                     Number Granted
----                                     --------------
Gabor Balthazer                          20,000
John Caldwell                            20,000
Kirby Cramer                             40,000

Grants to Named Executive Officers
Name                                     Number Granted
----                                     --------------
Andrew Baker                             200,000
Brian Cass                               200,000
Frank Bonner                             35,000
Julian Griffiths                         60,000
Richard Michaelson                       90,000

All such options have  ten-year  terms;  50% of the shares  subject to grant are
immediately  exercisable  with the remaining 50%  exercisable one year after the
grant date (meaning all such options, fully vested as of March 1, 2003); and all
have an exercise  price of $1.50 per share,  the price at which the Company sold
shares  of  Common  Stock in the  Private  Placement.  Options  to  purchase  an
aggregate of 1,177,000  shares of LSR Common Stock  (including  those  specified
above) were granted to employees  and  directors,  on the terms set forth above,
are listed as follow:

Date of Grant            Numbers Granted           Exercise Price
-------------            ---------------           --------------
March 1, 2002            1,142,000                 $1.50
September 3, 2002        20,000                    $2.40
October 21, 2002         15,000                    $2.03


                                          Shares       Wtd Avg. Ex Price
                                           (000)
Outstanding at start of period                 -                     $-
Granted                                    1,177                   1.53
                                     ----------------------------------
December 31, 2002                          1,177                  $1.53
                                     ----------------------------------
Exercisable at end of year                   589                  $1.53
Weighted average fair value of
options granted                             $901

Huntingdon Life Sciences Group plc Stock Option Plan

Huntingdon  Life  Sciences  Group plc issued  options prior to December 31, 1997
pursuant to several stock option plans. However, the ability to exercise options
under all such  Huntingdon  plans  lapsed on March 26, 2002 in  connection  with
LSR's  acquisition of Huntingdon,  except for those granted under the Unapproved
Stock Option Plan (the  "Unapproved  Plan").  Under the  Unapproved  Plan,  some
options  technically remain outstanding.  However,  such options are exercisable
only for shares of  Huntingdon,  a 100% wholly owned  subsidiary of LSR, and are
considered to have no value.

10.  EMPLOYEE BENEFITS

During the year, the Company  operated the Huntingdon Life Sciences  Pension and
Life Assurance  Scheme (the "HLS Defined Benefit Pension Plan") a funded pension
plan providing benefits,  based on final pensionable salary, for certain Company
employees in the UK. This Plan was closed to new entrants from April 5, 1997. As
of December 31, 2002 management decided to permanently  suspend the accumulation
of plan benefits of vested employees in the plan, and therefore, the HLS Defined
Benefit Pension Plan was curtailed.  This  suspension of benefits  resulted in a
gain on  curtailment  of $8.41  million at  December  31,  2002,  which has been
recorded as a reduction of the Company's unrecognized net actuarial loss.

The  components  of the net  periodic  benefit  cost of the HLS Defined  Benefit
Pension Plan for the years ended December 31, are as follows:
<TABLE>
<CAPTION>
                                                                      2002                2001                2000
                                                                      $000                $000                $000
<S>                                                               <C>                 <C>                 <C>
Service cost, benefits earned during the year                        1,466               1,493               1,548
Interest cost on projected benefit obligation                        5,581               5,720               5,823
Expected return on plan assets                                     (6,455)             (7,071)             (7,757)
Amortization of prior service cost                                       -                  44                  90
Amortization of transition asset                                     (238)               (230)               (237)

                                                               -------------       ------------       -------------
Net periodic benefit/(cost)                                            $354              $(44)              $(533)
                                                               -------------       ------------       -------------
The major assumptions used in calculating
the pension expense were:
                                                                      2002                2001                 2000
Discount rate                                                        5.75%               6.00%                6.00%
Rate of increase of future compensation                                N/A               3.75%                3.75%
Long-term rate of return on plan assets                              8.25%               7.25%                7.25%

</TABLE>


A reconciliation of the projected benefit obligation for the HLS Defined Benefit
Pension  Plan to the accrued  pension  expense  recorded as of December 31 is as
follows:
<TABLE>
<CAPTION>


                                                                      2002                2001                 2000
                                                                      $000                $000                 $000
<S>                                                              <C>                 <C>                   <C>
Projected benefit obligation                                      (99,068)            (91,467)             (99,003)
Plan assets at market value                                         81,356              86,492              100,083
                                                               ------------       -------------       --------------
                                                               ------------       -------------       --------------

Funded status                                                     (17,712)             (4,975)                1,080
Unrecognized net actuarial loss/(gain)                              19,678               5,712              (1,733)
Adjustment for minimum liability - pretax                         (19,296)                   -                    -
Unrecognized prior service cost                                          -                   -                   45
Unrecognized net asset at transition                                 (382)               (563)                (826)
                                                               ------------       -------------       --------------
(Accrued)/prepaid pension expense                                  $17,712                $174             $(1,434)
                                                               ------------       -------------       --------------
                                                               ------------       -------------       --------------
Change in plan assets
Fair value of assets, beginning of year                             86,492             100,083              110,740
Foreign currency changes                                             8,238             (2,573)              (8,101)
Actual loss on plan assets                                        (13,299)            (10,571)              (2,571)
Employer contributions                                               1,654               1,517                1,622
Employee contributions                                                 752                 728                  708
Benefit payments                                                   (2,481)             (2,692)              (2,315)
                                                               ------------        ------------       --------------
                                                               ------------        ------------       --------------
Fair value of assets, end of year                                  $81,356             $86,492             $100,083
                                                               ------------        ------------       --------------
                                                               ------------        ------------       --------------
Change in projected benefits obligation
Projected benefit obligation, beginning of year                     91,467              99,003              101,755
Foreign currency changes                                            10,013             (2,545)              (7,445)
Service cost                                                         1,466               1,493                1,548
Interest cost                                                        5,581               5,720                5,823
Actuarial (gains)/losses                                               681            (10,240)              (1,071)
Gain on curtailment                                                (8,411)                   -                    -
Employee contributions                                                 752                 728                  708
Benefit payments                                                   (2,481)             (2,692)              (2,315)
                                                               ------------        ------------       --------------
                                                               ------------        ------------       --------------
Projected benefit obligation, end of year                          $99,068             $91,467              $99,003
                                                               ------------        ------------       --------------

</TABLE>

On April 6, 1997 the Company established a defined  contribution plan, the Group
Personal Pension Plan, for Company employees in the UK. Additionally,  a defined
contribution  plan (401-K plan) is also  available  for employees in the US. The
retirement  benefit expense for these plans for the year ended December 31, 2002
was $1.3 million (2001, $1.3 million and 2000, $0.8 million).

11.  GEOGRAPHICAL ANALYSIS

During each of the years ended  December  31, 2002,  2001 and 2000,  the Company
operated  from within two segments  based on  geographical  markets,  the United
Kingdom and the United States. The Company had one continuing activity, Contract
Research, throughout these periods.

The  accounting  policies  of the  operating  segments  are the  same  as  those
described  in the  summary  of  significant  accounting  policies.  Transactions
between segments, which are immaterial, are carried out on an arms-length basis.
Interest  income,  interest expense and income taxes are also not reported on an
operating  segment  basis  because they are not  considered  in the  performance
evaluation by the Company's chief operating decision-maker.

Geographical segment information is as follows:
<TABLE>
<CAPTION>

                                                     US                 UK              Total
                                                   $000               $000               $000
  <S>                                           <C>                <C>               <C>
   2002 Revenues                                 24,891             90,851            115,742
        Operating income before other
        operating expense                           301              3,963              4,264
        Operating income                            301              3,963              4,264
        Long-lived assets (A)                    20,437            112,776            133,203
        Property and equipment, net               9,615             84,959             94,574
        Depreciation & amortization               1,335              6,773              8,108
        Capital expenditure
                                                    996              3,181              4,177
        Total assets                             23,483            124,927            148,410

   2001 Revenues                                 23,501             75,705             99,206
        Operating (loss) before other
        expense/income                            (109)              (784)              (893)
        Other operating expense                       -              (750)              (750)
        Operating (loss)                          (109)            (1,534)            (1,643)
        Long-lived assets (A)                    19,693            111,138            130,831
        Property and equipment, net              10,132             80,221             90,353
        Depreciation & amortization               1,416              6,891              8,307
        Capital expenditure                       1,151              2,144              3,295
        Total assets                             20,929            113,035            133,964

   2000 Revenues                                 22,929             73,035             95,964
        Operating income/(loss) before other
        expense/ income                           1,699            (1,615)                 84
        Operating income/(loss)                   1,699            (1,615)                 84
        Long-lived assets (A)                    20,324            121,395            141,719
        Property and equipment, net              10,403             87,257             97,660
        Depreciation & amortization               1,598              7,495              9,093
        Capital expenditure                       1,752              1,896              3,648
        Total assets                             21,950            124,157            146,107
<FN>

(A)  Long-lived  assets exclude cash and cash equivalents and unamortized  costs
     of raising long-term debt.

</FN>
</TABLE>

Revenues from customers (based on location of customers)

                              2002               2001             2000
                              $000               $000             $000
United States               37,316             34,705           39,733
Europe                      51,551             39,082           32,919
Rest of World               26,875             25,419           23,312
                      -------------     --------------     ------------
                          $115,742            $99,206          $95,964
                      -------------     --------------     ------------


12.  ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
<TABLE>
<CAPTION>

                                             Balance as of     Exchange      Charged to     Accounts     Balance as
                                             beginning of     Adjustment     operations    written off    of end of
                                                period                                                     period
                                                 $000            $000           $000          $000          $000
<S>                                              <C>             <C>            <C>          <C>            <C>
Allowance for uncollectible accounts
deducted from trade debtors
December 31, 2002                                 164             17            294           (188)          287
December 31, 2001                                 86             (2)             80             0            164
December 31, 2000                                 186            (14)           108           (194)          86

</TABLE>


13.  OTHER RELATED PARTY TRANSACTIONS

Share purchase loan

Brian Cass,  President and Managing  Director of LSR, acquired 400,000 shares of
LSR Common Stock in the Private Placement. Mr. Cass acquired such shares through
the delivery of two promissory  notes.  Both such promissory  notes, each in the
amount of (pound)211,679 ($335,998), are due on March 28, 2007; bear interest at
the rate of 5% per annum;  and are secured by the  200,000  shares of LSR Common
Stock  purchased  with the  proceeds  of each  such  loan.  The due date of each
promissory note would be accelerated if Mr. Cass  voluntarily  resigned from his
employment  with LSR or had his employment  terminated.  Repayment of one of the
promissory notes will be made by automatic deduction of (pound)44,000  ($69,840)
per year from the (pound)66,000 ($104,762) per year pension contribution made by
the Company to a pension plan established by Mr. Cass. The other note is further
collateralized by the (pound)214,500 ($340,476) accrued in such pension account.
In addition,  one-third of any yearly bonus received by Mr. Cass will be used to
reduce  principal  of the  promissory  notes.  Total  amount  of this loan as of
December  31, 2002 is  (pound)400,680  ($645,000  at year-end  foreign  exchange
rates).

Julian Griffiths, a director of LSR and Finance Director of Huntingdon, acquired
50,000  shares of LSR  Common  Stock in the  Private  Placement.  Mr.  Griffiths
acquired such shares through the delivery of a promissory  note in the principal
amount  of  (pound)52,817  ($83,837),  which is due on  March  28,  2007;  bears
interest at the rate of 5% per annum; and is secured by the 50,000 shares of LSR
Common  Stock  purchased  with  the  proceeds  of  the  loan.  Repayment  of the
promissory  note will be made by automatic  monthly  deduction of  (pound)943.56
($1,498) from Mr.  Griffith's  salary.  Total amount of this loan as of December
31, 2002 is (pound)24,230 ($39,000 at year-end foreign exchange rates).

14.  UNAUDITED QUARTERLY FINANCIAL INFORMATION

The following is a summary of unaudited quarterly financial  information for the
12 months ended December 31, 2002 and December 31, 2001.
<TABLE>
<CAPTION>

Year ended December 31, 2002                                        Quarter Ended
                                              March 31            June 30       September 30        December 31
                                                  $000               $000               $000               $000

<S>                                           <C>                <C>                <C>                <C>
Revenues                                        26,135             28,590             29,951             31,066
Cost of sales                                 (21,646)           (23,120)           (24,122)           (24,515)
                                      --------------------------------------------------------------------------
Gross profit                                     4,489              5,470              5,829              6,551
Selling and administrative expenses            (4,302)            (4,324)            (4,538)            (4,911)
                                      --------------------------------------------------------------------------
Operating income                                   187              1,146              1,291              1,640
Interest income                                      6                 27                 20                 13
Interest expense                               (1,627)            (1,524)            (1,522)            (1,631)
Other (expense)/income                         (2,623)              3,241              1,747              2,557
                                      --------------------------------------------------------------------------
(Loss)/income before taxes                     (4,057)              2,890              1,536              2,579
Income tax benefit/(expense)                       742                 26               (34)              (985)
                                      --------------------------------------------------------------------------
Net (loss)/income                             $(3,315)             $2,916             $1,502             $1,594
                                      --------------------------------------------------------------------------
                                      --------------------------------------------------------------------------
(Loss)/earnings per share                      $(0.48)              $0.24              $0.13              $0.13


                                                                    Quarter Ended
Year ended December 31, 2001                  March 31            June 30       September 30        December 31
                                                  $000               $000               $000               $000

Revenues                                        22,689             24,012             25,707             26,798
Cost of sales                                 (20,915)           (20,454)           (21,648)           (21,116)
                                      --------------------------------------------------------------------------
Gross profit                                     1,774              3,558              4,059              5,682
Selling and administrative costs               (4,006)            (4,178)            (3,786)            (3,996)
Other operating (loss)/income                    (174)                169                  -              (745)
                                      --------------------------------------------------------------------------
Operating (loss)/income                        (2,406)              (451)                273                941
Interest income                                     39                 36                 14                 15
Interest expense                               (1,668)            (1,616)            (1,621)            (1,709)
Other (expense)/income                         (2,071)              (346)               1086            (3,140)
                                      --------------------------------------------------------------------------
Loss before taxes                              (6,106)            (2,377)              (248)            (3,893)
Income tax benefit                               1,770                705                300                221
                                      --------------------------------------------------------------------------
Net (loss)/income                             $(4,336)           $(1,672)                $52           $(3,672)
                                      --------------------------------------------------------------------------

(Loss)/earnings per share                      $(0.74)            $(0.28)              $0.09            $(0.63)

</TABLE>


ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE


(i)  LSR announced on February 28, 2003, that its independent auditors, Deloitte
     & Touche LLP ("D&T"),  would not stand for reelection  following completion
     of the 2002 audit. D&T advised LSR that their decision was made as a result
     of harassment  they received  from animal  rights  extremists  and not as a
     result of any accounting  dispute,  disagreement  or concern with LSR as of
     the date of such  announcement.  There have not been any such  disputes  or
     disagreements between LSR and D&T as of the date of such announcement.

(ii) The reports of D&T on LSR's  financial  statements for each of the past two
     fiscal years did not contain an adverse  opinion or a disclaimer of opinion
     and were not  qualified  or  modified  as to  uncertainty,  audit  scope or
     accounting principles.

(iii)D&T advised LSR of its determination that following  completion of its 2002
     audit D&T would not stand for reappointment.

(iv) In connection  with the audits of the Company's  financial  statements  for
     each of its two most  recent  fiscal  years  and  through  the date of this
     report,  there were no disagreements  with D&T on any matters of accounting
     principles or practices,  financial statement disclosure, or auditing scope
     or procedure,  which disagreements,  if not resolved to the satisfaction of
     D&T,  would have caused D&T to make  reference to the matter in  connection
     with its report.

(v)  During  LSR's two most  recent  fiscal  years and  through the date of this
     report,  there were no "reportable  events" as defined in Item 304(a)(1)(v)
     of Regulation S-K.

D&T has furnished  LSR with a letter  addressed to the  Securities  and Exchange
Commission stating that it agrees with the above statements.

LSR has not yet engaged new auditors to replace D&T.


<PAGE>


PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The table  below sets forth  certain  information  with  respect to the  current
directors and executive officers of LSR.

Name                    Age     Office Held

Andrew Baker            54      Director
                                Chairman of the Board & Chief Executive Officer
Gabor Balthazar         61      Director
Brian Cass              55      Director, Managing Director/President
Afonso Junqueiras       46      Director, appointed January 15, 2003.
Richard Michaelson      51      Chief Financial Officer & Secretary
Yaya Sesay              60      Director, appointed January 10, 2003

(a)      Identification of Directors

Andrew Baker became a director and Chairman and Chief  Executive  Officer of LSR
on January 10, 2002.  He was  appointed to the Board of  Huntingdon as Executive
Chairman in  September  1998.  He is a chartered  accountant  and has  operating
experience  in  companies  involved  in the  delivery  of  healthcare  ancillary
services. He spent 18 years until 1992 with Corning Incorporated ("Corning") and
held  the  posts  of  President  and CEO of  MetPath  Inc.,  Corning's  clinical
laboratory  subsidiary,  from  1985 to 1989.  He  became  President  of  Corning
Laboratory Services Inc. in 1989, which at the time controlled MetPath Inc. (now
trading  as  part  of  Quest  Diagnostics   Inc.),  and  Hazleton   Corporation,
G.H.Besselaar  Associates  and  SciCor  Inc.,  all three now  trading as part of
Covance Inc.  Since leaving  Corning in 1992, Mr. Baker has focused on investing
in  and  developing   companies  in  the  healthcare   sector  including  Unilab
Corporation,  a clinical laboratory services provider in California, and Medical
Diagnostics  Management,  which is a US based provider of radiology and clinical
laboratory services to health care payers. In 1997, he formed Focused Healthcare
Partners  ("FHP"),  an investment  partnership  that acts as general partner for
healthcare startup and development companies.

Gabor  Balthazar  became a director of LSR on January 10, 2002. He was appointed
to the Board of Huntingdon as the Senior Independent  Non-Executive  Director in
March  2000.  He has been  active  in  international  marketing  and  management
consulting  for  almost  30  years.  He was a  founding  Board  member of Unilab
Corporation,  serving as President  from 1989 to 1992,  and continuing to sit on
Unilab's Board until November 1999. From 1985 to 1997, Mr. Balthazar served as a
consultant to Frankfurt Consult, the merger/acquisition  subsidiary of BHF-Bank,
Frankfurt,  Germany  and to Unilabs  Holdings  SA, a Swiss  clinical  laboratory
testing holding company, from 1987 to 1992. He is a graduate of the Columbia Law
School and the Columbia Business School in New York City.

Brian Cass, FCMA, CBE, became a director and Managing  Director/President of LSR
on January 10, 2002.  He was  appointed to the Board of  Huntingdon  as Managing
Director/Chief  Operating Officer in September 1998. Prior to joining Huntingdon
he was a Vice  President  of  Covance  Inc.  and  Managing  Director  of Covance
Laboratories Ltd.,  (previously Hazleton Europe Ltd) for nearly 12 years, having
joined  the  company in 1979 as  Controller.  Brian  Cass  worked at  Huntingdon
Research  Center  between 1972 and 1974 and has previous  experience  with other
companies  in the  electronics  and  heavy  plant  industries.  He has also held
directorships  with  North  Yorkshire  Training  &  Enterprise  Council  Ltd and
Business Link North  Yorkshire Ltd. In June 2002, Mr. Cass was also appointed as
a Commander in the Most Excellent Order of the British Empire (CBE).

Afonso  Junqueiras  became a director of LSR on January 15, 2003.  He is a civil
engineer and has been President and a director of a South American private civil
engineering firm since 1997.

Richard Michaelson became Chief Financial Officer and Secretary of LSR effective
January 10, 2002. Mr. Michaelson was Director of Strategic Finance of Huntingdon
from  September  1998 to December  2001.  He served as Senior Vice  President of
Unilab Corporation,  a clinical laboratory testing company based in Los Angeles,
California, from September 1997 to December 1997, Senior Vice President-Finance,
Treasurer and Chief Financial  Officer of Unilab from February 1994 to September
1997,  and Vice  President-Finance,  Treasurer  and Chief  Financial  Officer of
Unilab from November 1993 to February 1994. Mr.  Michaelson  also served as Vice
President of Unilab  beginning in October 1990. Mr.  Michaelson  joined MetPath,
Inc., the clinical laboratory  subsidiary of Corning  Incorporated,  in 1980 and
served as Vice  President  of MetPath  from 1983 and  Treasurer  of Corning  Lab
Services, Inc. from 1990 through, in each case, September 1992.

Yaya Sesay, 60, served as a senior government  official of an African nation for
approximately 25 years, culminating in his service as Financial Secretary of the
Ministry of Finance for three years. For the past five years, Mr. Sesay has been
an   international   businessman   with  an  interest  in  the   development  of
pharmaceutical products.

The  Articles of Amendment  and  Restatement  of LSR provide that the  directors
shall be not less than one in number  and there  shall be no  maximum  number of
directors.  Any director  appointed by the board of directors  holds office only
until the next following annual meeting,  at which time he shall be eligible for
re-election by the  stockholders.  Directors may be removed from office only for
cause.

No  director  or  executive  officer  has a family  relationship  with any other
director or executive officer.


ITEM 11.  EXECUTIVE COMPENSATION

In the 12 months  ended  December  31, 2002 the  aggregate  compensation  of the
Executive Officers as a group, paid or accrued, was $1,254,750.

Employment Agreements

Andrew Baker

The  services  of Mr.  Baker  are  provided  for not less than 100 days per year
through a management  services  contract  between  Huntingdon and FHP. Mr. Baker
controls  FHP.  Under the  contract,  FHP agrees to provide the  services of Mr.
Baker as Chairman and CEO of the Company.  The management services contract will
continue until terminated on 12 months' written notice from either party.

Under  the  management   services   contract  FHP  is  paid  an  annual  fee  of
(pound)200,000.   Mr.  Baker  receives  contributions  to  his  private  pension
arrangements,  equivalent to 33 percent of this basic annual fee. The management
services  contract  may be  terminated  if either FHP or Mr.  Baker is guilty of
serious misconduct or is in material breach of the terms of the contract,  among
other reasons.  In the event of termination  without "cause" following a "change
in control",  as defined,  FHP would  receive a payment equal to 2.99 times this
annualized  fee plus an amount  equal to 2.99 times all  incentive  compensation
earned  or  received  by  FHP  or Mr.  Baker  during  the  12  months  prior  to
termination.

Both  FHP  and  Mr.  Baker  are  bound  by  confidentiality  restrictions  and a
restriction  preventing  Mr. Baker from holding any interests  conflicting  with
those of the Company, without the Company's consent. Mr. Baker has undertaken to
the Company that, during the continuance of the management services contract, he
will not without the prior consent of the Company, be concerned or interested in
any business, which competes, or conflicts with the business of the Company.

Brian Cass

The  services  of Mr.  Cass are  provided  through a service  agreement  between
Huntingdon Life Sciences  Limited (a wholly owned  subsidiary of Huntingdon) and
Mr. Cass, which appoints Mr. Cass as President/Managing Director of the Company.
Mr. Cass' service  agreement can be terminated on two years' written notice from
either party.

Mr. Cass receives a gross salary of (pound)200,000  per annum. Under the service
agreement,  Mr.  Cass is also  entitled  to health  insurance,  life  insurance,
personal accident  insurance and medical expenses  insurance.  Mr. Cass receives
contributions to his private pension  arrangements,  equivalent to 33 percent of
his basic annual salary. He is also entitled to a non-pensionable  car allowance
of  (pound)1,000  gross  per  month and  (pound)2,000  per  month as  relocation
allowance.  Mr. Cass' service agreement also provides for payment to Mr. Cass of
a bonus,  at the absolute  discretion  of the Company's  Board.  In the event of
termination  without "cause"  following a "change in control",  as defined,  Mr.
Cass  would  receive a payment  equal to 2.99 times his  annual  salary  plus an
amount equal to 2.99 times all incentive  compensation earned or received by Mr.
Cass during the 12 months prior to termination.

Mr. Cass'  service  agreement may be terminated if Mr. Cass is guilty of serious
misconduct or is in material breach of the terms of the service  agreement or is
in breach of the model code for securities  transactions  by directors of listed
companies, among other reasons.

Mr. Cass is bound by confidentiality  restrictions and a restriction  preventing
him from being  engaged,  concerned or interested in any business that conflicts
with the business of the Company or any  subsidiary  unless either the Company's
Board  otherwise  consents  or the  interest  is  limited  to a holding or other
interest of no more than 5 percent of the total  amount of shares or  securities
of any company quoted on a recognized investment exchange.

Richard Michaelson

The services of Mr.  Michaelson are provided through a service agreement between
him and Huntingdon Life Sciences Inc. (a wholly owned subsidiary of Huntingdon).
The service  agreement  appoints Mr.  Michaelson as Chief Financial  Officer and
Secretary of the Company. Mr. Michaelson's service agreement will continue until
terminated by Mr.  Michaelson  on thirty days'  written  notice or by Huntingdon
Life Sciences Inc. on 12 months'  written  notice.  In the event of  termination
without  "cause"  following a "change in control",  as defined,  Mr.  Michaelson
would  receive a payment  equal to 2.99 times his annual  salary  plus an amount
equal to 2.99  times  all  incentive  compensation  earned  or  received  by Mr.
Michaelson during the 12 months prior to termination.

Mr.  Michaelson  receives an annual salary of $200,000  gross and is entitled to
health insurance, life insurance,  personal accident insurance, medical expenses
insurance and  participation in the 401(k) Plan of Huntingdon Life Sciences Inc.
Mr.  Michaelson's  service agreement also provides for the payment of a bonus to
Mr. Michaelson in the absolute discretion of the Company's Board.

In addition,  Mr.  Michaelson is entitled to a car allowance of $1,000 gross per
month.

The  agreement  may be  terminated  if  Mr.  Michaelson  is  guilty  of  serious
misconduct  or is in  material  breach  of the terms of the  service  agreement,
amongst other reasons.

Mr.  Michaelson  is  bound by  confidentiality  restrictions  and a  restriction
preventing  him from being  engaged,  concerned  or  interested  in any business
conflicting with the business of the Company or any subsidiary  unless the Board
otherwise  consents or the interest is limited to a holding or other interest of
no more than 5  percent  of the total  amount  of  shares or  securities  of any
company quoted on a recognized investment exchange.

Discretionary bonus plan

The Company operates a discretionary  bonus plan for executive  officers and key
managers  based  upon  improvements  to  operating  income  and  achievement  of
pre-defined targets. No bonus awards were made in respect of 2000, 2001 or 2002.

The  following  table shows the  remuneration  of  Executive  Officers in the 12
Months ended December 31, 2002, 2001, and 2000;
<TABLE>
<CAPTION>

                                               Annual Compensation                        Long Term Compensation
                                                                                                  Awards

   Name And Principal        Year        Salary         Bonus         Other Annual           Number Of Shares
        Position                                                      Compensation          Underlying Options
<S>                         <C>        <C>               <C>            <C>                      <C>
Mr. A H Baker                2002       300,780           -              100,160                  200,000
Chairman and Chief           2001       288,006           -              95,990                      -
Executive Officer            2000       288,000           -              95,040                      -

Dr F W Bonner                2002       221,073           -              20,053                   30,000
Director of Science &        2001       211,680           -              20,395                   10,000
Technology of Huntingdon     2000       211,680           -              19,367                    7,500

Mr. B Cass                   2002       300,780           -              160,327                  200,000
Managing Director            2001       280,741           -              153,311                     -
                             2000       288,800           -              153,936                     -

Mr K Cramer                  2002        36,898           -                 -                     40,000
                             2001        60,000           -                 -                        -
                             2000        60,000           -                 -                        -

Mr. J T Griffiths            2002       187,988           -              54,547                   60,000
Financial Director           2001       120,960           -              40,229                   10,000
Company Secretary of         2000       120,960           -              44,070                    7,500
Huntingdon

Mr. Richard A. Michaelson    2002       196,923           -              11,917                   90,000

</TABLE>


Messrs.  Baker,  Bonner, Cass and Griffiths are paid in UK pounds sterling.  The
amounts  have been  converted  at the rate of  $1.5039  to  (pound)1.00  for the
purposes of the above table.

Dr. Bonner and Mr.  Griffiths did not stand for  re-election as directors of LSR
at the June 10, 2002 Annual Meeting of Stakeholders and accordingly ceased being
directors of LSR as of that date.  Mr. Cramer  resigned as a director  effective
January 19, 2003.

One  Director  is a  member  of the  Group  Personal  Pension  Plan.  The  other
Directors' pension contributions are privately invested.

EQUITY INCENTIVE PLANS

LSR 2001 Equity Incentive Plan (the "LSR 2001 Equity Incentive Plan")

The LSR Board has adopted the LSR 2001 Equity  Incentive  Plan.  Adoption of the
LSR 2001 Equity  Incentive  Plan will enable LSR to use stock options (and other
stock-based  awards) as a means to attract,  retain and motivate key  personnel.
This stock option plan is approved by the shareholders.

Awards  under the LSR 2001 Equity  Incentive  Plan may be granted by a committee
designated  by the LSR  Board  pursuant  to the  terms  of the LSR  2001  Equity
Incentive  Plan and may  include:  (i) options to purchase  shares of LSR Voting
Common Stock,  including  incentive stock options ("ISOs"),  non-qualified stock
options or both; (ii) stock appreciation rights ("SARs"), whether in conjunction
with  the  grant  of  stock  options  or  independent  of such  grant,  or stock
appreciation  rights  that  are only  exercisable  in the  event of a change  in
control or upon other events;  (iii)  restricted stock consisting of shares that
are subject to  forfeiture  based on the  failure to satisfy  employment-related
restrictions;  (iv) deferred stock,  representing the right to receive shares of
stock in the future;  (v) bonus  stock and awards in lieu of cash  compensation;
(vi) dividend equivalents,  consisting of a right to receive cash, other awards,
or other  property  equal in value to dividends paid with respect to a specified
number of shares of LSR Voting Common Stock or other periodic payments; or (vii)
other awards not  otherwise  provided for, the value of which are based in whole
or in part upon the value of the LSR Voting Common Stock.  Awards  granted under
the LSR 2001 Equity  Incentive Plan are generally not assignable or transferable
except pursuant to a will and by operation of law.

The flexible terms of the LSR 2001 Equity  Incentive Plan are intended to, among
other things, permit the stock option committee to impose performance conditions
with respect to any award,  thereby  requiring  forfeiture of all or part of any
award  if   performance   objectives   are  not  met  or  linking  the  time  of
exercisability  or  settlement  of an award  to the  attainment  of  performance
conditions.  For awards intended to qualify as "performance-based  compensation"
within the meaning of Section 162(m) of the United States Internal  Revenue Code
such  performance  objectives  shall be based  solely  on (i)  annual  return on
capital;  (ii) annual  earnings or earnings  per share;  (iii)  annual cash flow
provided by operations; (iv) changes in annual revenues; (v) stock price; and/or
(vi) strategic business criteria,  consisting of one or more objectives based on
meeting specified revenue,  market  penetration,  geographic  business expansion
goals, cost targets, and goals relating to acquisitions or divestitures.

LSR's  stock  option  committee,  which  will  administer  the 2001  LSR  Equity
Incentive Plan, will have the authority,  among other things, to: (i) select the
directors,  officers and other employees and independent contractors entitled to
receive awards under the 2001 LSR Equity Incentive Plan; (ii) determine the form
of awards, or combinations of awards,  and whether such awards are to operate on
a tandem basis or in conjunction  with other awards;  (iii) determine the number
of shares of LSR Voting Common Stock or units or rights covered by an award; and
(iv) determine the terms and conditions of any awards granted under the 2001 LSR
Equity  Incentive Plan,  including any  restrictions or limitations on transfer,
any vesting schedules or the acceleration of vesting  schedules,  any forfeiture
provision or waiver of the same and including any terms and conditions necessary
or desirable to ensure the optimal tax result for  participating  personnel  and
the  Company  including  by way of example to ensure that there is no tax on the
grant of the rights and that such tax only  arises on the  exercise of rights or
otherwise when the LSR Voting Common Stock  unconditionally  vests and is at the
disposal of such participating  personnel. The exercise price at which shares of
LSR Voting Common Stock may be purchased  pursuant to the grant of stock options
under the 2001 LSR  Equity  Incentive  Plan is to be  determined  by the  option
committee at the time of grant in its discretion,  which discretion includes the
ability  to set an  exercise  price that is below the fair  market  value of the
shares of LSR Voting Common Stock covered by such grant at the time of grant.

The  number  of  shares  of LSR  Voting  Common  Stock  that may be  subject  to
outstanding  awards granted under the 2001 LSR Equity Incentive Plan (determined
immediately  after the  grant of any  award)  may not  exceed 20 per cent of the
aggregate number of shares of LSR Voting Common Stock then outstanding.

The  2001  LSR  Equity  Incentive  Plan  may  be  amended,  altered,  suspended,
discontinued,  or  terminated  by  the  LSR  Board  without  LSR  Voting  Common
Stockholder  approval  unless such  approval is required by law or regulation or
under the rules of any stock exchange or automated quotation system on which LSR
Voting  Common  Stock  is  then  listed  or  quoted.  Thus,  LSR  Voting  Common
Stockholder  approval will not  necessarily  be required for  amendments,  which
might  increase the cost of the plan or broaden  eligibility.  LSR Voting Common
Stockholder approval will not be deemed to be required under laws or regulations
that condition favorable tax treatment on such approval,  although the LSR Board
may,  in its  discretion,  seek LSR Voting  Common  Stockholder  approval in any
circumstances in which it deems such approval advisable.

No awards were  granted  during 2001  pursuant to the 2001 LSR Equity  Incentive
Plan. The LSR Board has designated  the  Compensation  Committee of the Board to
serve as the stock option committee.

LSR made  grants  under the LSR 2001 Equity  Incentive  Plan on March 1, 2002 to
certain directors as of that date, and employees,  including the Named Executive
Officers:

Grants to Directors
Name                          Number Granted
----                          --------------
Gabor Balthazar               20,000
John Caldwell                 20,000
Kirby Cramer                  40,000

Grants to Named Executive Officers
----------------------------------
Name                          Number Granted
----                          --------------
Andrew Baker                  200,000
Brian Cass                    200,000
Frank Bonner                  35,000
Julian Griffiths              60,000
Richard Michaelson            90,000

All such options have  ten-year  terms;  50% of the shares  subject to grant are
immediately  exercisable  with the remaining 50%  exercisable one year after the
grant date (meaning all such options, fully vested as of March 1, 2003); and all
have an exercise  price of $1.50 per share,  the price at which the Company sold
shares  of  Common  Stock in the  Private  Placement.  Options  to  purchase  an
aggregate of 1,177,000  shares of LSR Common Stock  (including  those  specified
above) were granted to employees  and  directors,  on the terms set forth above,
are listed as follows:

Date of Grant                  Numbers Granted             Exercise Price
-------------                  ---------------             --------------
March 1, 2002                  1,142,000                   $1.50
September 3, 2002              20,000                      $2.40
October 21, 2002               15,000                      $2.03


                                         Shares            Wtd Avg. Ex Price
                                          (000)
Outstanding at start of period                 -                          $-
Granted                                    1,177                        1.53
                                     ---------------------------------------
December 31, 2002                          1,177                       $1.53
                                     ---------------------------------------
Exercisable at end of year                   589                       $1.53
Weighted average fair value of
options granted                             $901

Huntingdon Life Sciences Group plc Stock Option Plan

Huntingdon  Life  Sciences  Group plc issued  options prior to December 31, 1997
pursuant to several stock option plans. However, the ability to exercise options
under all such  Huntingdon  plans  lapsed on March 26, 2002 in  connection  with
LSR's  acquisition of Huntingdon,  except for those granted under the Unapproved
Stock Option Plan (the  "Unapproved  Plan").  Under the  Unapproved  Plan,  some
options  technically remain outstanding.  However,  such options are exercisable
only for shares of  Huntingdon,  a 100% wholly owned  subsidiary of LSR, and are
considered to have no value.

ITEM 12. SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT AS OF
         MARCH 18, 2003.

The  following  table sets  forth,  as of March 13,  2003,  certain  information
regarding the  beneficial  ownership of the shares of LSR common  stock,  by (a)
each person or entity who is known by LSR to own  beneficially 5% or more of its
outstanding  shares of Common Stock (none other than Mr. Baker and Mr. Cass, who
are each a  Director  and  Executive  Officer  of LSR);  (b)  each  Director  or
Executive  Officer of LSR or principal  subsidiary;  and (c) all  Directors  and
Executive Officers as a group.

<TABLE>
<CAPTION>
                                                                       Percent of
Name                                   Number of Shares            Outstanding Shares
<S>                                          <C>        <C>            <C>
Mr. A. Baker                                  2,710,089  (1)            21.6%
Mr. G. Balthazar                                 20,000  (2)              *
Mr. B. Cass                                     620,000  (3)             5.1%
Mr. J. Griffiths                                110,000  (4)              *
Mr. A. Junqueiras                                    --                  --
Mr. R. Michaelson                               314,800  (5)             2.6%
Mr. Y. Sesay                                         --                  --
All Directors and Executive Officers          3,774,889                 29.0%
as a Group

<FN>

*    Signifies  less  than  1%.  All  percentages  calculated  on the  basis  of
     11,932,338  outstanding  shares of Voting Common Stock.  Shares  subject to
     issuance upon presently exercisable options or Warrants are included in the
     number of  outstanding  shares for purposes of  calculating  that  holder's
     percentage  interest,  as well as the aggregate  percentage interest of all
     directors and Executive Officers as a group.

(1)  Includes  presently  exercisable  options to  purchase  200,000  shares and
     presently  exercisable  warrants to purchase  410,914 shares.  1,335,175 of
     such  shares  are  beneficially  owned by First  Investments  LLC, a Nevada
     limited  liability  company of which Mr.  Baker owns 69% of the  membership
     interests,  with the remaining 31% of the membership  interests being owned
     by Search  for a Cure LLC.  684,000  of such  shares  are owned by  Focused
     Healthcare  Partners Ltd, a Bahamas  corporation  that is controlled by Mr.
     Baker.  490,914 of such shares  (including  the 410,914  shares  subject to
     presently  exercisable  warrants  noted  above) are  beneficially  owned by
     Focused  Healthcare  Partners LLC, a New Jersey limited  liability  company
     that is controlled by Mr. Baker.

(2)  Includes presently exercisable options to purchase 20,000 shares.

(3)  Includes presently exercisable options to purchase 200,000 shares

(4)  Includes  presently  exercisable  options to purchase  60,000 shares,  plus
     50,000  shares  beneficially  owned  by  Morven  LLC,  a  Delaware  limited
     liability company that is controlled by Mr. Griffiths.

(5)  Includes  presently  exercisable  options to purchase  90,000  shares,  and
     175,000  shares  beneficially  owned by Hawk  Investments  LLC,  a Delaware
     limited  liability  company  that Mr.  Michaelson  controls and of which he
     directly owns 100,000 shares.
</FN>
</TABLE>

From  time to time US  depositary  institutions  hold  shares on behalf of their
clients to enable a market to be made in the LSR's shares.  No holdings of 5% or
more have been reported by those institutions at March 18, 2003.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(1)  A $2,910,800  ((pound)2,000,000) facility was made available to the Company
     on September 25, 2000 by a director. Mr. Baker. This has been drawn down in
     full.  The loan is repayable on demand,  although it is  subordinate to the
     bank loan, it is unsecured and interest is payable monthly at a rate of 10%
     per annum. By Amendment No. 2 to that loan facility,  dated March 20, 2001,
     FHP  became  party  to the loan  and  $550,000  of the  amount  loaned  was
     transferred  to FHP. On March 28, 2002 $2.1 million of Mr. Baker's loan was
     converted into 1,400,000  shares of LSR Voting Common Stock and $300,000 of
     FHP's loan was converted into 200,000 shares of LSR Voting Common Stock. As
     a result of such conversions  approximately $302,000 remains payable to Mr.
     Baker and $250,000 remains payable to FHP.

(2)  On January 20, 2001 the  Company's  bank loan was  refinanced by means of a
     loan from HLSF,  LLC a  subsidiary  company of the  Stephens  Group Inc., a
     related  party at the time,  and the other two banks  that were part of the
     original  loan  syndicate.  That  loan was  transferred  to  another  party
     effective February 11, 2002. The loan is now repayable on June 30, 2006 and
     interest is payable in quarterly breaks at a rate of "LIBOR" plus 1.75% per
     annum. The loan is secured by guarantees from LSR, Huntingdon Life Sciences
     Group plc,  Huntingdon  Life Sciences  Limited and Huntingdon Life Sciences
     Inc., collateralized by all the assets of those companies.

(3)  In accordance with the terms of a facility agreement dated July 19 2001 and
     as  amended on October  52001,  the  Stephens  Group Inc.  made  $2,910,800
     ((pound)2,000,000)  available to the  Company,  which was  available  for a
     period of one year from July 19 2001.  That loan was transferred to another
     party  effective  February  11,  2002.  This  amount,  which is secured and
     subordinated to the bank debt, was drawn down in full. Interest was payable
     monthly at a rate of 10% per annum.  With the  consent of the bank  lender,
     one half of the facility was repaid on July 1, 2002,  and the remainder was
     repaid on October 1, 2002.

(4)  In October  2001 the  Company  issued to Stephen  Group  Inc.,  warrants to
     purchase up to 704,425 shares of Common Voting Stock at a purchase price of
     $1.50 per share.  These warrants  arose out of the  refinancing of the bank
     loan by the  Stephens  Group  Inc.  in January  2001.  These  warrants  are
     exercisable  at any time and will expire on October 9, 2011.  The  warrants
     were subsequently transferred to an unrelated third party.

     In  addition  at the  June  11,  2002  shareholders  meeting,  shareholders
     approved the  issuance to FHP of warrants to purchase up to 410,914  shares
     of  Common  Voting  Stock at a  purchase  price of $1.50 per  share.  These
     warrants  arose  out  of  negotiations   regarding  the  provision  of  the
     $2,910,800  ((pound)2,000,000)  loan facility made available to the Company
     on September 25, 2000 by Mr. Baker who controls FHP.

(5)  Brian Cass, President and Managing Director of LSR, acquired 400,000 shares
     of LSR Common Stock in the Private Placement. Mr. Cass acquired such shares
     through the delivery of two promissory  notes.  Both such promissory notes,
     each in the amount of (pound)211,679 ($335,998), are due on March 28, 2007;
     bear  interest at the rate of 5% per annum;  and are secured by the 200,000
     shares of LSR Common Stock  purchased  with the proceeds of each such loan.
     The due date of each  promissory  note  would be  accelerated  if Mr.  Cass
     voluntarily  resigned from his  employment  with LSR or had his  employment
     terminated.  Repayment  of one of the  promissory  notes  will  be  made by
     automatic   deduction  of   (pound)44,000   ($69,840)  per  year  from  the
     (pound)66,000  ($104,762) per year pension contribution made by the Company
     to a pension  plan  established  by Mr.  Cass.  The other  note is  further
     collateralized  by the  (pound)214,500  ($340,476)  accrued in such pension
     account.  In addition,  one-third of any yearly bonus  received by Mr. Cass
     will be used to reduce principal of the promissory  notes.  Total amount of
     this loan as of December 31, 2002 is  (pound)400,680  ($645,000 at year-end
     foreign exchange rates).

(6)  Julian  Griffiths,  a director of LSR and Finance  Director of  Huntingdon,
     acquired  50,000 shares of LSR Common Stock in the Private  Placement.  Mr.
     Griffiths acquired such shares through the delivery of a promissory note in
     the principal amount of (pound)52,817 ($83,837),  which is due on March 28,
     2007;  bears  interest  at the rate of 5% per annum;  and is secured by the
     50,000 shares of LSR Common Stock  purchased with the proceeds of the loan.
     Repayment  of the  promissory  note  will  be  made  by  automatic  monthly
     deduction of  (pound)943.56  ($1,498)  from Mr.  Griffith's  salary.  Total
     amount of this loan as of December  31, 2002 is  (pound)24,230  ($39,000 at
     year-end foreign exchange rates).


ITEM 14.   CONTROLS AND PROCEDURES

Within  the 90 days  prior  to the  date  of  this  report,  we  carried  out an
evaluation,  under the  supervision  and with the  participation  of management,
including  our Chief  Executive  Officer  and Chief  Financial  Officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the
Chief  Executive   Officer  and  Chief  Financial  Officer  concluded  that  our
disclosure  controls and  procedures  are  effective in timely  alerting them to
material  information  relating  to  the  Company  (including  its  consolidated
subsidiaries)  required to be included in our periodic  SEC filings.  There have
been no significant  changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most recent
evaluation.

<PAGE>


PART IV


ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a)     List of documents filed as part of this report
        ----------------------------------------------
(1)     Index to Financial Statements
        Life Sciences Research, Inc.

        Independent Auditors' Report

        Consolidated Statements of Operations- Years ended
        December 31, 2002, 2001, and 2000

        Consolidated Balance Sheets - December 31, 2002 and 2001

        Consolidated Statements of Changes in Shareholders' (Deficit)/Equity
        and Comprehensive Loss - Years ended December 31, 2002, 2001, and 2000

        Consolidated Statements of Cash Flows - Years ended December 31, 2002,
        2001, and 2000

        Notes to Consolidated Financial Statements

(2)     Financial Statement Schedules

        Schedules are omitted because they are not applicable or the required
        information is shown in the consolidated financial statements or notes
        thereto.

<PAGE>

List of Exhibits

Exhibit
 No.     Description of Exhibit

2.1  Letter of Intent,  dated August 27, 2001,  between the  Registrant and HLS.
     INCORPORATED  BY REFERENCE TO REGISTRANT'S  REGISTRATION  STATEMENT ON FORM
     S-4, REGISTRATION NUMBER 333-71408.

3.1  Articles of Amendment and Restatement of the Registrant adopted on November
     7, 2001.  INCORPORATED BY REFERENCE TO REGISTRANT'S  REGISTRATION STATEMENT
     ON FORM S-4, REGISTRATION NUMBER 333-71408.

3.2  Bylaws  of  the  Registrant.  INCORPORATED  BY  REFERENCE  TO  REGISTRANT'S
     REGISTRATION STATEMENT ON FORM S-4, REGISTRATION NUMBER 333-71408.

4.1  Subscription  Agreement  dated  August 1, 1991  among HIH  Capital  Limited
     ("HCL"),  HLS, Chase Manhattan Bank Luxembourg  S.A. (the  "Custodian"),  J
     Henry Schroder Wagg & Co. Limited and Others.  INCORPORATED BY REFERENCE TO
     HLS'  ANNUAL  REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED  SEPTEMBER  30,
     1991.

4.2  Trust  Deed,  dated  August 12, 1991 among HCL,  HLS and The Law  Debenture
     Trust  Corporation  plc  INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT ON
     FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1991.

4.3  Deed  Poll,  dated  August  12,  1991,  executed  by HLS.  INCORPORATED  BY
     REFERENCE  TO HLS'  ANNUAL  REPORT ON FORM 10-K FOR THE  FISCAL  YEAR ENDED
     SEPTEMBER 30, 1991.

4.4  Custodian  Agreement,  dated August 1, 1991 among the  Custodian,  HCL, and
     HLS.  INCORPORATED BY REFERENCE TO HLS'S ANNUAL REPORT ON FORM 10-K FOR THE
     FISCAL YEAR ENDED SEPTEMBER 30, 1991.

4.5  Deed Poll, dated October 16, 2001, executed by Registrant.  INCORPORATED BY
     REFERENCE TO REGISTRANT'S  REGISTRATION STATEMENT ON FORM S-4, REGISTRATION
     NO. 333-71408.

10.1 Security  Agreement  dated April 30, 1998 between  Huntingdon Life Sciences
     Inc., National  Westminster Bank PLC and various other banks.  INCORPORATED
     BY REFERENCE  TO HLS' ANNUAL  REPORT ON FORM 20-F FOR THE FISCAL YEAR ENDED
     DECEMBER 31, 1998.

10.2 An agreement dated August 7, 1998 between, inter alia, HLS, Huntingdon Life
     Sciences  Limited,  Huntingdon Life Sciences Inc. and National  Westminster
     Bank  PLC  replacing  the  facilities   agreement  dated  November,   1995.
     INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT ON FORM 20-F FOR THE FISCAL
     YEAR ENDED DECEMBER 31, 1998.

10.3 An agreement between HLS, Huntingdon Life Sciences Limited, Huntingdon Life
     Sciences Inc. and various banks replacing the third intercreditor agreement
     between the parties dated March 17, 1998. INCORPORATED BY REFERENCE TO HLS'
     ANNUAL REPORT ON FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.

10.4 A  Management  Services  Agreement  dated  August 7, 1998  between  HLS and
     Focused  Healthcare  Partners.  INCORPORATED  BY  REFERENCE  TO HLS' ANNUAL
     REPORT ON FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.

10.5 A Deed  of  Undertaking  between  HLS and  Andrew  Baker.  INCORPORATED  BY
     REFERENCE  TO HLS'  ANNUAL  REPORT ON FORM 20-F FOR THE  FISCAL  YEAR ENDED
     DECEMBER 31, 1998.

10.6 Amendment dated January 26, 2000 to the Management Services Agreement dated
     August 7, 1999 between HLS and Focused Healthcare Partners. INCORPORATED BY
     REFERENCE  TO HLS'  ANNUAL  REPORT ON FORM 10-K FOR THE  FISCAL  YEAR ENDED
     DECEMBER 31, 1999.

10.7 Service Contract dated April 29, 1999 between  Huntingdon Life Sciences Ltd
     and Mr. B Cass INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT ON FORM 20-F
     FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.

10.8 Service Contract dated April 29, 1999 between  Huntingdon Life Sciences Ltd
     and Mr. J Griffiths.  INCORPORATED  BY  REFERENCE TO HLS' ANNUAL  REPORT ON
     FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.

10.9 Service Contract dated April 29, 1999 between  Huntingdon Life Sciences Ltd
     and Dr F Bonner.  INCORPORATED  BY REFERENCE TO HLS' ANNUAL  REPORT ON FORM
     20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.

10.10A  letter  of  appointment  dated  March  21,  2000  between  HLS and Mr. G
     Balthazar. INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT ON FORM 10-K FOR
     THE FISCAL YEAR ENDED DECEMBER 31, 1999.

10.11Option  Deed  dated   September  2,  1998  between  HLS  and  Andrew  Baker
     INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT ON FORM 20-F FOR THE FISCAL
     YEAR ENDED DECEMBER 31, 1998.

10.12Rules of the Huntingdon Life Sciences Group  Unapproved Share Option Scheme
     as amended on June 3, 1998. INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT
     ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.

10.13Rules  of  the  Huntingdon  Life  Sciences  Group  Incentive   Option  Plan
     INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
     YEAR ENDED DECEMBER 31, 1999.

10.14Registrant's  2001 Equity  Incentive  Plan.  INCORPORATED  BY  REFERENCE TO
     REGISTRANT'S  REGISTRATION  STATEMENT  ON  FORM  S-4,  REGISTRATION  NUMBER
     333-71408.

10.15Loan Facility  Letter,  dated  September  25, 2000,  between HLS and Andrew
     Baker. INCORPORATED BY REFERENCE TO HLS' ANNUAL REPORT ON FORM 10-K FOR THE
     FISCAL YEAR ENDED DECEMBER 31, 2000.

10.16Amendment  No. 1 to Loan  Facility  Letter,  dated as of February 22, 2001,
     between HLS and Andrew  Baker.  INCORPORATED  BY  REFERENCE  TO HLS' ANNUAL
     REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000.

10.17Amendment  No. 2 to Loan  Facility  Letter,  dated as of March 20, 2001, by
     and  among  Andrew  Baker,  HLS  and  Focused  Healthcare  Partners.  FILED
     HEREWITH.

10.18Amendment  Agreement  dated  February  19, 2001  relating  to a  Facilities
     Agreement dated August 7, 1998 among HLS,  Huntingdon Life Sciences Limited
     (HLSL),  Huntingdon  Life  Sciences  Inc.  (HLSI),  the Banks  (as  defined
     therein) and  Stephens  Group Inc. as Agent.  INCORPORATED  BY REFERENCE TO
     HLS'  ANNUAL  REPORT ON FORM 10-K FOR THE FISCAL  YEAR ENDED  DECEMBER  31,
     2000.

10.19Fifth  Intercreditor  Agreement,  dated  February  19, 2001 among  Stephens
     Group Inc. (as Agent), HLSF LLC, Allfirst Bank, Comerica Bank, the Company,
     HLSL, HLSI, Andrew Baker and Stephens Group Inc. (as Funder).  INCORPORATED
     BY REFERENCE  TO HLS' ANNUAL  REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
     DECEMBER 31, 2000.

10.20Subscription and Investor Rights Agreement,  dated October 9, 2001, between
     LSR  and  Walter   Stapfer.   INCORPORATED  BY  REFERENCE  TO  REGISTRANT'S
     REGISTRATION   STATEMENT  ON  FORM  S-4,   REGISTRATION   STATEMENT  NUMBER
     333-71408.

10.21Subscription and Investor Rights Agreement,  dated October 9, 2001, between
     LSR and the persons named therein as Investors.  INCORPORATED  BY REFERENCE
     TO REGISTRANT'S  REGISTRATION STATEMENT ON FORM S-4, REGISTRATION STATEMENT
     NUMBER 333-71408.

10.22Warrant,  dated October 9, 2001, issued by the Registrant.  INCORPORATED BY
     REFERENCE TO REGISTRANT'S  REGISTRATION STATEMENT ON FORM S-4, REGISTRATION
     STATEMENT NUMBER 333-71408.

10.23Form of Director's  Irrevocable  Undertaking.  INCORPORATED BY REFERENCE TO
     REGISTRANT'S  REGISTRATION  STATEMENT ON FORM S-4,  REGISTRATION  STATEMENT
     NUMBER 333-71408.

10.24Inducement  Agreement,  dated  October 9, 2001 between the  Registrant  and
     HLS.  INCORPORATED BY REFERENCE TO REGISTRANT'S  REGISTRATION  STATEMENT ON
     FORM S-4, REGISTRATION STATEMENT NUMBER 333-71408.

10.25Warrant,  dated June 11, 2002,  issued by the  Registrant.  INCORPORATED BY
     REFERENCE TO  REGISTRANT'S  PROXY  STATEMENT ON SCHEDULE 14A, DATED MAY 10,
     2002.

10.26Service  Agreement,  dated as of April 1,  2000,  between  Huntingdon  Life
     Sciences, Inc. and Richard Michaelson. FILED HEREWITH.

10.27Amendment No. 1 to Service  Agreement  between  Huntingdon  Life  Sciences,
     Inc. and Richard Michaelson, dated as of April 15, 2002. FILED HEREWITH.

10.28Amendment  No. 1 to Service  Agreement  between  Huntingdon  Life  Sciences
     Limited and Brian Cass, dated as of April 15, 2002. FILED HEREWITH.

10.29Amendment  No. 1 to Service  Agreement  between  Huntingdon  life  Sciences
     Limited and Julian Griffiths, dated as of April 15, 2002. FILED HEREWITH.

10.30Amendment No. 2 to Management  Services  Agreement between  Huntingdon Life
     Sciences Group plc and Focused Healthcare  Partners,  dated as of April 15,
     2002. FILED HEREWITH.

21.1 Subsidiaries FILED HEREWITH

99.1 Press  Release,  dated March 25, 2003,  announcing  fourth quarter and full
     year 2002 results. FILED HEREWITH.


(b) Reports on Form 8-K

None in the fourth quarter.


<PAGE>

                                    SIGNATURE


Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  this  Annual  Report  on Form  10-K has been  signed  below by the
following  person on behalf of the  Registrant  and in the capacities and on the
dates indicated.

                           Life Sciences Research Inc.
                                  (Registrant)


By:      /s/ Richard Michaelson

Name:    Richard Michaelson
Title:   CFO & Secretary
Date:    March 28, 2003


CEO Certification

I, Andrew Baker, as Chief Executive Officer of the Company, certify that:

1.   I have reviewed this annual report on Form 10-K of Life Sciences  Research,
     Inc.:

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report,

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report,

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



         Date:    March 28, 2003            /s/      Andrew H Baker
                                                     ------------------------
                                                     Andrew H Baker
                                                     Chief Executive Officer



CFO Certification

I, Richard Michaelson, as Chief Financial Officer of the Company, certify that:

1.   I have reviewed this annual report on Form 10-K of Life Sciences  Research,
     Inc.:

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report,

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report,

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


         Date:    March 28, 2003            /s/      Richard Michaelson
                                                     -------------------------
                                                     Richard Michaelson
                                                     Chief Financial Officer