UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 205494
                            ------------------------

                                    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, 2001

                                       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: 732 873 2550 x 4824
           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
Voting Common Stock $0.01 par value                   REGISTERED
                                                    Other OTC Market


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. [ ]

The aggregate market value of the Voting Common Stock held by  non-affiliates of
the  Registrant at April 8, 2002 was  approximately  $13,153,082  based on a per
share price of $2.00, the closing market price of the Voting Common Stock on the
Other OTC Market.

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

        11,032,578 Voting Common Stock of $0.01 each as at April 8, 2002
        900,000 Non Voting Common Stock of $0.01 each as at April 8, 2002

<PAGE>

<TABLE>

TABLE OF CONTENTS
<CAPTION>

ITEM                                                                                       PAGE

                                     PART I
<S>  <C>                                                                                    <C>

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 .........................................................       15

7.   Management's Discussion and Analysis of Financial Condition and Results
     of Operations ...................................................................       16

7A.  Quantitative and Qualitative Disclosures About Market Risk.......................       25

8.   Financial Statements and Supplementary Data .....................................       26

9.   Changes in and disagreements with Accountants on Accounting and Financial
     Disclosure ......................................................................       58

                                PART III

10.  Directors and Executive Officers of the Registrant...............................       59

11.  Executive Compensation ..........................................................       60

12.  Security Ownership of Certain Beneficial Owners and Management...................       66

13.  Certain Relationships and Related Transactions ..................................       66

                                 PART IV

14.  Exhibits, Financial Statements, Schedules and Reports on Form 8-K................       68

</TABLE>

<PAGE>


PART I

ITEM 1.  BUSINESS

INTRODUCTION

Life  Science  Research  Inc.  ("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  will  be  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 is 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 will utilize the capital structure of LSR and the assets and
liabilities of Huntingdon will be recorded at historical  cost. LSR has included
in "Item 8. Financial  Statements and Supplemental  Data" stand-alone  financial
statements  for LSR from July 19, 2001 (date of inception) to December 31, 2001.
During this period, LSR had no operations of its own, but nevertheless  incurred
expenses  relating  principally  to the Offer and the issuance of warrants.  The
financial statements of Huntingdon as of December 31, 2001 and 2000 and for each
of the three years in the period ended December 31, 2001 have also been included
in Item 8. On  consummation  of the  Exchange  Offer in early  2002,  Huntingdon
became the operating entity for financial reporting purposes. Consequently, when
presenting financial  statements for LSR, the registrant,  for periods preceding
to the  effectiveness  of the Exchange  Offer,  the  financial  statements  will
represent Huntingdon's financial position and results of operations (as reported
in the financial  statements  included  herein.) The assets and  liabilities and
results of operations of LSR will be included in such financial statements as of
the date of the consummation of the Exchange Offer.  Although Huntingdon will be
deemed to be the acquiring  corporation  for financial  accounting and reporting
purposes, the legal status of LSR as the surviving corporation will not change.

As used in this report, the "Company" means Huntingdon prior to the consummation
of the Exchange  Offer in early 2002 and,  thereafter LSR reflecting the reverse
acquisition, as described above.

The financial statements of LSR and Huntingdon, as included in Item 8, have been
prepared in United States dollars (US$ or $.)  Previously,  Huntingdon  prepared
its  financial   statements  in  pounds  sterling   ((pound)).   The  change  in
Huntingdon's  reporting currency was considered appropriate given, amongst other
things,  the significance of Huntingdon's US operations and assets.  The Company
is  a  Contract  Research   Organisation  ("CRO")  providing   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 Huntingdon's  clients'
products.   The  Company's   services  are  designed  to  meet  the   regulatory
requirements of governments around the world.

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

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 with the name  "Huntingdon  Research
Centre  plc".  In June  1985,  Huntingdon's  name was  changed  from  Huntingdon
Research Centre plc to Huntingdon International Holdings plc. In 1988 Huntington
was floated on the London Stock Exchange and in early 1989 it obtained a listing
for its ADR's on the New York Stock Exchange.

In  1995,  it  acquired  the  toxicology   business  of  APBI,  which  comprised
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  Centre Ltd and the name of that  company  changed to  Huntingdon  Life
Sciences Ltd. The US business acquired operates as Huntingdon Life Sciences Inc.

Huntingdon's  name was  subsequently  changed in April 1997 to  Huntingdon  Life
Sciences  Group  plc.  At that time the  Company  purchased  a small  specialist
research  centre in Wilmslow,  Cheshire (UK) which included a marmoset  breeding
colony.  Huntingdon  transferred this work to its other UK facilities and closed
the Wilmslow facility. The site was sold on September 1, 1999.

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.

During 1998 poor trading results put a heavy strain on cash resources, utilising
Huntingdon's available facilities. Given the medium to long term element of many
of Huntingdon's activities and the reluctance of clients to place new work until
Huntingdon'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 Huntingdon returned to profitability.

On September 2, 1998 a group of new investors  subscribed  (pound)15 million for
120 million  ordinary  shares whilst  existing  shareholders  and  institutional
investors took up a further 57 million shares,  contributing (pound)7.1 million.
After  expenses of (pound)1.7  million,  the issue of shares raised  (pound)20.4
million.  On the same  date  Huntingdon's  bankers  agreed  to  confirm  and fix
Huntingdon's  facilities at  (pound)24.5  million until August 31, 2000 and this
amount was fully drawn down.

On  September 1, 1999 the sale of the Wilmslow  Research  Centre was  completed.
Parts of the proceeds  from this sale  ((pound)1.9  million)  were used to repay
bank debt and the  facility  was reduced  accordingly.  On September 1, 2000 the
remaining  facility  of  (pound)22,586,000  was  renewed,  through  a series  of
extensions,  up until January 19, 2001.  The 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 loan to
a third  party,  and the two  other  banks who were  part of the  original  loan
syndicate. It is now repayable on June 30, 2006.

Since the  involvement of the new investor group in 1998, a new management  team
has been appointed,  led by Brian Cass,  which the Company believes has begun to
successfully address many of Huntingdon's past difficulties.  Relationships with
customers have been restored, a substantial cost and headcount reduction program
has been effected and sales have started to grow again at an encouraging rate.

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

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 recognised positively in the local communities in which we operate.
o    To grow to significant  profitability and improved return on investment for
     our shareholders.

In November 1999 a new so called "animal rights" group was formed in the UK with
Huntingdon  as its  target.  During  2000 and 2001 the  campaigners  focused  on
Huntingdon,  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. The Company believes the US is a more hospitable  corporate
environment  than  the UK.  As a US and  Maryland  company,  LSR  benefits  from
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  many  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 the Company's US operations have enjoyed  substantial growth in the last two
years.

Also 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.

DESCRIPTION OF BUSINESS

The Company 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. The Company'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,  through a
mixture of organic growth and a small number of strategic acquisitions. In doing
so the Company  will benefit  from strong drug  pipelines in the  pharmaceutical
industry,   the  growing  amount  of  legislation   concerning  the  safety  and
environmental  impact of  agrochemicals  and industrial  chemicals and a growing
trend towards  outsourcing as clients focus more internal  resources on research
in the search for new compounds.

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,  the  Company
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>
<S>                  <C>                 <C>                <C>          <C>          <C>
DRUG DISCOVERY                            DRUG DEVELOPMENT                             MARKETING
                      NON-CLINICAL                           CLINICAL
Chemical Synthesis        Pre-Clinical      Phase I          Phase II     Phase III      Phase IV
                      Toxicology            Safety           Efficacy     Long Term      Post Marketing
                      Pharmacology                                        Efficacy       Surveillance
                      Drug Metabolism
                      Pharmacokinetics
                                          LONG TERM SAFETY STUDIES
</TABLE>


The Company  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 people.  Pre-clinical  testing
includes studies conducted prior to the compounds exposure to people, 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 source.  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 the  Company  has had  collaborative
relationships  with a  number  of  Phase  I  clinical  trial  units  and  offers
centralised clinical laboratory services in support of clinical trials.

The  Company  has also  actively  pursued  opportunities  to extend its range of
capabilities supporting late stage drug discovery, focused around invitro and in
vivo models for lead  candidate drug  characterisation  and  optimisation.  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 large  clinical  trials  (Phase 3 and beyond) is
relevant to the Company,  but the margins are less  attractive and it is subject
to a greater  degree of volatility  driven by the size of individual  contracts.
While the Company does not preclude entering this market, it is a very different
business  and one in  which a number  of  major  companies  are  already  firmly
established.

o        Market growth

It is estimated that the pharmaceutical industry annual research and development
(R & D) spending is between $35 billion and $40 billion and is growing at around
10% per annum. Around $20 billion is focused on development and, of this, 15% is
expenditure in the Company's core business area of pre-clinical development. The
Company believes that  approximately  30% of this is outsourced which means that
the Company is today competing in approximately a $1 billion market.

The  market  for these  services  is  growing  as a result  of  strong  new drug
pipelines:

     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.

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

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

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.

     The biotechnology  industry has become a significant source of business for
     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 utilise contract research organisations to perform these services. This
     frees them from the inefficient utilisation of in-house capabilities due to
     their sporadic and varied demand for these capabilities.

     In addition 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
     rationalised  and a focus on integration  rather than  development,  longer
     term  resources  are  increasingly  invested  in  in-house  facilities  for
     discovery and lead  optimisation  rather than  development  and  regulatory
     safety evaluation.  The outsourcing of development and safety evaluation is
     the Company's core business.

Therefore the overall market for outsourced  services is estimated to be growing
at an annual rate of around 10-15%.

Non-Pharmaceuticals

The Company has historically  generated one third to one half 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.

The Company'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.

o        Market Growth

It is estimated that the world-wide market for outsourced contract research from
these  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, as a result
of:

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

     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 childrens' toys).

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

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

     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  5%, we
believe that this coupled with increased outsourcing could provide market growth
of up to 8 -10% per annum over the next five years.

COMPETITION

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

GOVERNMENT SUPERVISION OF OPERATIONS

Supervisory regimes

Since the services  provided by the Company 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. The Company has had over 30 such
inspection visits and audits since 1985.

The Company's  laboratory in the USA 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 USA there is a  voluntary  certification  scheme  run by an
independent and  internationally  recognised  organisation,  the Association for
Assessment and Accreditation of Laboratory  Animal Care (AAALAC).  The Company's
laboratory in the US is accredited under this program.

The  Company'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  living
vertebrate animals and regulation of the animals' environment. Personal licences
(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  authorised  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 18 such inspections annually.

The Company's  Board has  established an Animal Welfare and Ethics  Committee to
oversee the Company's compliance with these regulatory and ethical issues.

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

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

Whilst 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

The  Company'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  organisations  and agencies such as the FDA, the EPA, the UK Department
of Health, and the World Health Organisation.

To ensure that this  experience  and  expertise is  transmitted  throughout  the
organization,   the  Company  maintains  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, 2001 and 2000 were as
follows:

                                   Employees at December 31

                                  2001                2000
USA......................          216                 212
UK.......................        1,161               1,093
Japan....................           10                  10
                            -----------         -----------
                                 1,387               1,315
                            -----------         -----------

Animal Rights Activism

In  parallel   with  an  increase  in  so  called   "animal   rights"   activity
internationally,  targeting  organisations  not  only  in the  CRO  and  medical
research  community,  during November 1999 a new campaign group (Stop Huntingdon
Animal  Cruelty or SHAC) was  formed in the UK with  Huntingdon  as its  target.
SHAC's broad aim is to end all animal research; targeting Huntingdon is the next
step on this path. 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 the form of direct  action;  incorporating
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. Many of these illegal activities were carried out by
extreme "animal rights" activists. The worst acts of violence have been targeted
at members  of staff of the  Company.  These  have taken the form of  night-time
arson attacks on employees' cars outside their homes and physical attacks on two
of the senior managers as they returned home from work.

During  2001 the  incidences  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 an attempt to defeat the Offer, which was
unsuccessful.  Also during 2001,  animal rights activities of SHAC and the other
groups  expanded  to the  US,  where  the  focus  was on the  Company's  largest
stockholders,  although the intensity and general public  support  appears to be
less than in the UK.

To counter this "animal  rights"  campaign the Company has adopted a strategy of
openness and direct  co-operation 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
all  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  national  media  coverage  has  become  increasingly   positive
throughout the duration of the campaign.

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.

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.

Although the movement is more recent and  undeveloped  in the US, the Company is
addressing it proactively  with actions  similar to those it has utilized in the
UK,  including a strategy of openness and media  co-operation;  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. For example, following an
incident  of  vandalism  at a home  protest  against  one of  the  Company's  US
employees,  the  Company  obtained  an order of the New  Jersey  Superior  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 Centre.

Management and Labour Relations

The Company's  labour 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 labour  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, trade-marks, 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.

Financial Information about Geographic Areas

See Financial Statements

Available Information

LSR has not yet filed any annual or  quarterly  reports with the SEC although it
will commence  doing so beginning  with this Form 10-K.  Huntingdon has filed an
Annual Report on Form 10-K for the Fiscal Year ended  December 31, 2000. You may
read and copy Huntingdon's reports, statements or other information at the SEC's
Internet site  (http:/www.sec.gov)  or at the SEC's public  reference rooms (450
Fifth  Street,  N.W.,  Washington,  DC 20549).  You can request  copies of those
documents, upon payment of a duplicating fee, by writing to the SEC.

ITEM 2.  PROPERTIES

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

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

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

<TABLE>
<CAPTION>
Location                     Laboratories       Size            Principal Activities
                             and Offices
<S>                          <C>                <C>             <C>
Near Princeton, NJ, USA      180,000 sq.ft.     53.5 acres      Laboratories, animal accommodation and offices
Huntingdon, England          612,000 sq.ft.     80 acres        Laboratories, animal accommodation and
                                                                offices
Near Diss, England           250,000 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


PART II

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

LSR 's Voting  Common  Stock  trades on the Other OTC  Market  under the  symbol
"LSRI". The closing market price of the Voting Common Stock on April 8, 2002 was
$2.00 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".
Huntingdon's  American  Depositary  Shares  "ADS's" were listed on the Other OTC
under the symbol "HTDLY".  Prior to October 22, 2001 the ADS's were eligible for
quotation  on the  National  Association  of Security  Dealers  Over the Counter
Bulletin Board  (OTCBB).  On October 22, 2001 the ADS's were  disqualified  from
quotation  on the  OTCBB  because  no bid and  ask  had  been  posted  for  five
consecutive  trading days and the ADS's began trading on the Other OTC. Prior to
December  27,  2000  these  were  listed on the New York  Stock  Exchange,  Inc.
("NYSE") under the symbol "HTD".  They were suspended from the NYSE because they
no longer met the NYSE's continuing  listing criteria,  in particular the market
capitalisation of Huntingdon was below $50 million.

On July 10, 2000 Huntingdon 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.

The high and low  quarterly  sales price (in pounds  sterling)  of  Huntingdon's
Ordinary  Shares on the London Stock  Exchange  from January 1, 2000 to December
31, 2001 were as follows:

                               HIGH SALES                LOW SALES
QUARTER ENDED                     PRICE                    PRICE
-------------               ------------------        ----------------
                                 (pound)                  (pound)
March 31, 2000                    0.2775                   0.8
June 30, 2000                     0.1475                   0.0775
September 30, 2000                0.1125                   0.06
December 31, 2000                 0.06                     0.0225
March 31, 2001                    0.095                    0.0175
June 30, 2001                     0.055                    0.02
September 30, 2001                0.0475                   0.0275
December 31, 2001                 0.05                     0.0225

The high and low quarterly  sales price (in US dollars) of  Huntingdon  ADSs, as
evidenced by ADRs, on the Other OTC, OTCBB and NYSE, as applicable, from January
1, 2000 to December 31, 2001 were as follows:

                               HIGH SALES                LOW SALES
QUARTER ENDED                     PRICE                    PRICE
-------------               ------------------        ----------------
                                     $                        $
March 31, 2000                     14.7                      2.5
June 30, 2000                       7.5                      3.15
September 30, 2000                  4.31                     1.69
December 31, 2000                   1.94                     0.19
March 31, 2001                      3.13                     0.5
June 30, 2001                       1.69                     0.75
September 30, 2001                  1.25                     0.51
December 31, 2001                   1.82                     0.51

The prices for periods  prior to July 10, 2000 have been  adjusted for the ratio
change of ordinary shares to ADS's.

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 April 8, 2002,  LSR had 1,565 holders of record of Voting Common Stock and
two holders of record of Non-Voting Common Stock.

Subscription Agreements

On July 17, 2001, Walter Stapfer purchased 100 shares of LSR at a purchase price
of  $1.50  per  share  in a  transaction  exempt  from  registration  under  the
Securities Act.

On October 9, 2001 LSR entered  into a  subscription  agreement  with Mr Stapfer
(the "Stapfer  Subscription  Agreement") pursuant to which Mr Stapfer subscribed
for 99,900  shares of LSR Voting  Common Stock at a purchase  price of $1.50 per
share  (or  an  aggregate  of  $149,850)  in  a  transaction   exempt  from  the
registration  requirements  of the Securities  Act. Mr Stapfer  purchased  those
shares on January 10, 2002.

On October 9, 2001,  LSR also entered  into a  subscription  agreement  with two
other  investors  in LSR (the  "LSR  Investors"),  other  than Mr  Stapfer  (the
"Investor Subscription Agreement"),  pursuant to which the LSR Investors,  other
than Mr Stapfer,  subscribed for 900,000  shares of LSR Non-Voting  Common Stock
(convertible  into  shares of LSR Voting  Common  Stock) at a purchase  price of
$1.50 per share (or an aggregate of $1,350,000) in a transaction exempt from the
registration  requirements  of the Securities  Act. The LSR Investors  purchased
their shares on January 10, 2002.

LSR has granted the LSR Investors:

o    "most favoured nation" demand registration  rights, which shall be at least
     as  favourable  as the  demand  registration  rights  granted by LSR in the
     future to investors in any private placement of shares of LSR Common Stock;
     and

o    "piggyback"  registration  rights, which will enable them to require LSR to
     register  their  shares of LSR Voting  Common  Stock  whenever  LSR files a
     registration  statement  (other  than a  registration  relating  solely  to
     employee  benefit plans or a  registration  relating  solely to a corporate
     reorganisation  or other  transaction on Form S-4 or similar forms that may
     be promulgated in the future), under the Securities Act on behalf of itself
     or another LSR stockholder.

o    LSR has also granted certain LSR Investors one demand  registration  right,
     which will,  under certain  circumstances,  enable them to request that LSR
     register their shares of LSR Voting Common Stock for resale into the public
     trading market.  Such demand and piggyback  registration rights shall apply
     to any  shares of LSR  Voting  Common  Stock  issued to the LSR  Investors,
     issuable upon the conversion of certain of the LSR Investors' shares of LSR
     Non-Voting  Common Stock into shares of LSR Voting Common  Stock.  All such
     registration  rights shall  terminate  five years after  completion  of the
     first registered public offering by LSR.

The shares of LSR Common  Stock to be issued under the  Subscription  Agreements
are subject to certain  restrictions on transfer  pursuant to US securities law.
In addition,  prior to the exercise of any of the registration  rights described
in the preceding paragraph,  any shares of LSR Common Stock issuable pursuant to
the Subscription  Agreements shall be subject to restrictions on transfer to any
transferee who will hold 5 per cent or more of any class of capital stock of LSR
as a result of such transfer,  and who was not a 5 per cent holder prior to such
proposed  transfer,  without  the  consent  of LSR,  which  consent  may only be
withheld under limited circumstances.

Warrants to purchase shares of LSR Voting Common Stock

On October 9, 2001, on behalf of Huntingdon  LSR issued to Stephens Group Inc. a
company  which is controlled  by the Stephens  family of Little Rock,  Arkansas,
warrants  to  purchase  up to  704,425  shares of LSR Voting  Common  Stock at a
purchase  price of $1.50 per  share.  Those  warrants  are  referred  to in this
document  as the  "LSR  Warrants".  Stephens  subsequently  transferred  the LSR
Warrants to other investors in February 2002 in conjunction with the sale of all
its other interests in the Company.  In addition,  at the same time,  subject to
compliance  with  the  fiduciary  duties,  the  Huntingdon  Directors,  who  now
constitute the entire LSR Board,  intend to ask the LSR shareholders at the next
shareholders'  meeting to approve the issuance of an additional 410,914 warrants
to FHP, a firm which is controlled by Andrew Baker,  LSR's  Executive  Chairman,
also exercisable at $1.50 per share, and on substantially  the same terms as the
LSR Warrants. At the shareholders' meeting, FHP will not be permitted to vote on
this proposal.

Terms of the LSR Warrants. The LSR Warrants are exercisable at any time and will
expire on October 9, 2011.  Both the exercise  price and the number of shares of
LSR Voting  Common Stock that are issuable upon the exercise of the LSR Warrants
are subject to adjustment in the case of certain events, including stock splits,
dividends or distributions, a reclassification, or the reorganisation, merger or
consolidation of LSR. The LSR Warrants and the shares of LSR Voting Common Stock
issuable upon their exercise will be subject to certain restrictions on transfer
pursuant to US securities  laws.  The holders of the shares of LSR Voting Common
Stock  issuable  upon the exercise of the LSR Warrants  will have the  following
registration rights:

o    one "Form  S-3  demand"  registration  right,  which  will,  under  certain
     circumstances,  enable them to request that LSR  register  their shares for
     resale  into  the  public  trading  market  after  LSR  has  qualified  for
     registration under the Securities Act on Form S-3; and

o    "piggyback"  registration  rights, which will enable them to require LSR to
     register  their  shares of LSR Voting  Common  Stock  whenever  LSR files a
     registration statement, subject to certain exceptions, under the Securities
     Act on behalf of itself or another stockholder.

Background and Reasons for Issuing  Warrants.  The LSR Warrants and the proposed
issuance of warrants to FHP arose out of negotiations  regarding  financing that
Stephens,  FHP and their  respective  affiliates  provided to Huntingdon in late
2000 and early 2001.

Huntingdon  entered into a loan  agreement  with Mr Baker on September 25, 2000,
pursuant to which Mr Baker agreed to lend Huntingdon up to (pound)2,000,000.  He
subsequently  transferred a $550,000  participation in the loan to FHP. Mr Baker
is a member of FHP.

During  January  2001  Stephens  and its  affiliates  acquired  loans that other
parties had made to  Huntingdon  and amended the terms of such loans and in July
2001 made additional loans.

During the course of the negotiations, Mr Baker and Stephens each requested that
Huntingdon issue them warrants to purchase  Huntingdon  Shares. In the course of
those  discussions,  the Huntingdon  Directors were advised that the issuance of
warrants to Mr Baker,  Stephens and their  respective  affiliates  would require
shareholder approval. In March 2001 the Huntingdon Directors adopted resolutions
approving the issuance of warrants to Stephens and FHP,  subject to  shareholder
approval at Huntingdon's  next annual general meeting.  Huntingdon did not enter
into  agreements  with Stephens or FHP to issue these  warrants,  and it did not
submit the proposal to a  shareholder  vote.  Huntingdon  had not held an annual
general  meeting since March 2001, and no such meeting was held before the Offer
became wholly unconditional in January 2002.

During the discussions regarding the Offer, both Stephens and Mr Baker requested
that in lieu of the warrants referenced in the Huntingdon Board resolutions, LSR
issue them  warrants to purchase  shares of LSR Voting  Common Stock at the same
price at which the LSR Investors were  purchasing  their shares  pursuant to the
Subscription Agreements. Stephens advised Huntingdon that it was not prepared to
grant the waiver  necessary to enable the Offer to become  wholly  unconditional
without a default arising under  Stephens' loan agreement  unless LSR issued the
requested  warrants to Stephens prior to the  commencement  of the Offer.  After
considering  these  matters,  LSR decided to grant the LSR Warrants to Stephens.
LSR also decided that it would submit a proposal to its  shareholders  regarding
FHP's request at its next  shareholders  meeting after the Offer becomes  wholly
unconditional.

Private Placement Subscription Agreements

In  January  and  February  2002,  LSR  entered  into a series  of  subscription
agreements with a number of investors,  (the "Private Placement Investors") some
of whom were officers and  directors of LSR,  under which they agreed to acquire
in a private  placement  transaction  shares  of LSR  Voting  Common  Stock at a
purchase price of $1.50 per share. LSR closed the private placement on March 28,
2002,  having  sold  5,085,334  shares  of LSR  Voting  Common  Stock.  All such
subscription  agreements  granted  the  Private  Placement  Investors  piggyback
registration  rights.  Two investors  (who are not officers or directors of LSR)
were granted one demand registration right each.


ITEM 6.  SELECTED FINANCIAL DATA

The  selected  consolidated  financial  data  presented  below should be read in
conjunction with Huntingdon's audited consolidated  financial statements and the
related notes and "Management's  Discussion and Analysis of Financial  Condition
and  Results  of  Operations",  included  elsewhere  in  this  report.  Selected
financial  data as of  December  31,  2001 and for the period from July 19, 2001
(date of  inception)  to December  31, 2001 for LSR (on a stand alone basis) has
not been presented below. During this period, LSR had no substantive operations.
The LSR  stand-alone  financial  statements  are included in "Item 8.  Financial
Statements and Supplemental Data".

The selected consolidated financial information as of December 31, 2001 and 2000
and for each of the three 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 36.
Such financial statements have been prepared in accordance with US GAAP.

The selected consolidated financial information as of December 31, 1999 and 1998
and for the year ended  December 31, 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.

The selected consolidated  financial information as of December 31, 1997 and for
the year then ended has been  derived  from  Huntingdon's  audited  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 UK GAAP with a  reconciliation  of net income and  shareholders'
equity from UK GAAP to US GAAP.
<TABLE>

                    As of and for the year ended December 31
<CAPTION>

                                            ------------- --------------- -------------- ------------- --------------
                                                    2001            2000           1999          1998           1997
                                            -------------------------------------------------------------------------
                                                                  ($000 except per share data)

<S>                                              <C>             <C>            <C>          <C>             <C>
Statement of Operations Data
Revenues                                          99,206          95,964         94,186        87,196        104,336
Operating loss                                   (3,546)         (1,735)        (2,482)      (34,622)        (4,857)
Net loss                                         (8,446)         (9,763)        (6,605)      (38,301)        (4,696)
Loss per share
     - Basic                                     $(0.03)         $(0.03)        $(0.02)       $(0.22)        $(0.04)
     - Diluted                                   $(0.03)         $(0.03)        $(0.02)       $(0.22)        $(0.04)
Weighted average number of shares
outstanding ('000)                               293,421         291,206        291,010       172,200        112,935
Dividends per share                                    -               -              -             -              -
Book value per share                             $(0.01)           $0.01          $0.05         $0.13          $0.25

</TABLE>

<TABLE>

                    As of and for the year ended December 31
<CAPTION>

                                            ------------- --------------- -------------- ------------- --------------
                                                    2001            2000           1999          1998           1997
                                            -------------------------------------------------------------------------
                                                                             ($000)
<S>                                              <C>             <C>            <C>           <C>            <C>
Balance Sheet Data
Total assets                                     146,042         146.107        158,970       183,107        184,241
Long term debt                                    88,123          50,209         50,000        90,853         55,462
Net (liabilities)/assets                         (3,542)           4,066         14,850        22,144         28,582
Ordinary shares and paid in capital               66,094          65,330         65,242        65,242         31,501

Other Financial Data
Depreciation and amortisation                      8,307           9,093          9,675        17,719          9,765
Capital expenditure                                3,295           3,648          4,893         4,025         23,872

<FN>
(A) See Item 7 for information relating to exchange rates.
</FN>
</TABLE>


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

GENERAL

You  should  read  the  following  together  with  the  Huntingdon  consolidated
financial  statements  and the related  notes  included in this Annual Report on
Form  10-K,  beginning  on page  36.  Certain  statements  in this  section  are
"forward-looking   statements."   You   should   read  the   information   under
"Forward-Looking Statements" later in this section for special information about
our presentation of forward-looking information.

LSR was  incorporated  on July 19,  2001.  Since  incorporation,  LSR has had no
substantive operations. The LSR stand-alone financial statements are included in
"Item 8. Financial  Statements and Supplemental  Data". The Company is a leading
CRO which provides an extensive range of pre-clinical and non-clinical  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 recognised on the basis of work done
and  variable  costs are  matched  with such  income.  Contracts  are  generally
terminable  upon  notice by the client  with the client  being  responsible  for
reimbursing  the Company for the value of work done 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 characterised by high fixed costs, in particular staff
and facility related costs. Such a high proportion creates favourable conditions
for the Company as excess  capacity is utilized but, during periods of declining
revenue,  careful planning is required to reduce costs without impairing revenue
generating activities.

RESULTS OF OPERATIONS

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 last 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.

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 ($350,000);  increases in insurance costs of $200,000; and
banking costs of $100,000. Excluding these items, the increase was just over 1%.

In 2001, expenses totalling  $1,686,000 were incurred and expensed in connection
with the Exchange Offer.  In addition,  there was a write off in connection with
foreign  exchange  dealings  resulting from the bankruptcy of an exchange broker
($350,000),  special legal and other costs were incurred in connection  with the
Animal Rights campaign  ($400,000) and unamortised costs of $217,000 relating to
the  refinanced  bank loan were  written  off.  In 2000,  costs  incurred in the
refinancing of the Company's bank debt amounting to $1,819,000 were written off.
Such costs were incurred on elements of the  refinancing  which did not proceed,
or on facility extensions prior to the year end.

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  $400,000,  a
reduction in the facility  renewal fees once the  refinancing had been completed
in January 2001 reduced the charge by a further  $600,000.  These were offset by
an  increase  in  interest  costs of  $300,000  resulting  from the  increase in
borrowings from $85.5 million to $89.0 million.

Other  expense  of  $1.4  million  for  the  year  ended  December  31,  2001 is
principally the result of foreign exchange  remeasurement  losses on the Capital
Bonds  denominated  in US dollars.  The  functional  currency  of the  financing
subsidiary that holds the bonds is the UK pound sterling.  This expense compares
with other  expense of $3.5 million for the year ended  December  31, 2000.  The
decrease  relates to the movement in the UK pound sterling to US dollar exchange
rate during 2001 as compared to 2000."

Taxation  relief on loss for the year ended  December  31, 2001 was $3.0 million
representing  relief at 26% compared to $2.7 million  representing relief at 22%
in the previous year. A  reconciliation  between the US Corporation tax rate and
the  effective  rate of tax  relief 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                               40               40
Foreign rate differential                      (11)             (10)
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 $8.4 million
compared with $9.8 million the previous year.  Loss per share for the year ended
December 31, 2001 was $0.03  compared with $0.03 in the year ended  December 31,
2000.

Year ended December 31, 2000 compared with the year ended December 31, 1999

Revenues in the year ended December 31, 2000 were $96.0 million,  an increase of
2% on  revenues of $94.2  million  for the year ended  December  31,  1999.  The
underlying increase,  after adjusting for the impact of the movement in exchange
rates was  nearly  8%. The  recovery  in the  volume and value of orders  placed
following the  refinancing in September 1998 which was  experienced in 1999, was
maintained  in the first  three  quarters of 2000 and was the reason for the 11%
growth in revenues in the first three quarters of the year.  However the decline
in  orders  in the  final  quarter  led to a fall off in  revenues  in the final
quarter.

Cost of sales in the year ended December 31, 2000 were $80.7 million, a decrease
of 3% on cost of sales of $82.9  million for the year ended  December  31, 1999.
This decrease was due to exchange rate movements, which reduced cost of sales in
the year by $5.4  million.  Without  these  movements  cost of sales  would have
increased by 3.9%.  Increases in costs in the US were in line with the growth in
revenues.  However,  in the UK cost increases in sterling were higher than those
reflecting  revenue growth alone.  This was partly due to a change in the mix of
business which required higher animal and sub contract  costs.  However the main
increase  was in labour costs  reflecting  actions  taken to adjust  salaries to
allow retention and  recruitment of key employees.  This program started in 1999
and continued through 2000.

Selling and  administrative  expenses  rose by 4% to $15.1  million for the year
ended  December 31, 2000 from $14.6 million in the year ended December 31, 1999.
This growth was due to a build-up of the  Company's  sales  campaign  during the
year and a higher proportion of commission based orders.

Other  operating  expenses in the year ended December 31, 2000 comprised a write
off of costs  incurred in the  refinancing  of the  Company's  bank debt of $1.8
million.  The costs were  written  off as they were  incurred on elements of the
refinancing  which did not proceed or on facility  extensions  prior to the year
end.  Other  operating  income in the year ended  December 31, 1999  comprised a
profit of $2.8 million on the sale of the Wilmslow Research Centre,  offset by a
loss of $2.0 million to write off assets that were not Year 2000 compliant.

Net interest expense rose by 13% to $7.2 million for the year ended December 31,
2000 from $6.4  million  in the year  ended  December  31,  1999.  The effect of
exchange rate  movements  reduced the charge for the year by $700,000.  This was
offset by an increase in both the facility renewal fees of $500,000 and interest
rates of $600,000 whilst the refinancing was being renegotiated,  and with lower
cash balances interest receivable reduced by $400,000.

Other  expense  of  $3.5  million  for  the  year  ended  December  31,  2000 is
principally the result of foreign exchange remeasurement losses on Capital Bonds
denominated in US dollars.  The functional currency of the financing  subsidiary
that holds the bonds is the UK pound sterling.  This expense compares with other
expense of $1.6  million for the year ended  December  31,  1999.  The  increase
relates to the  movement  in the UK pound  sterling to US dollar  exchange  rate
during 2000 as compared to 1999.

Taxation  relief on losses for the year ended December 31, 2000 was $2.7 million
representing  relief at 22% compared to $3.8 million  representing relief at 36%
for  the  year  ended  December  31,  1999.  A  reconciliation  between  the  US
Corporation  tax rate and the  effective  rate of  income  tax  relief on losses
before  income taxes for the year ended  December 31, 2000 and December 31, 1999
is shown below:
<TABLE>
<CAPTION>

                                                        % of loss before income taxes
                                                             2000               1999
                                                               %                  %
<S>                                                          <C>                <C>
US statutory rate                                             40                 40
Effect of non taxable income                                   -                  6
Foreign rate differential                                    (10)                (9)
Non deductible foreign exchange loss                          (4)                (6)
Effect of reduction in UK tax rate on deferred tax             -                  5
Prior year adjustments                                        (4)                 -
                                                        ----------------    --------------
Effective tax rate                                            22                 36
                                                        ----------------    --------------
</TABLE>

The  overall  net loss for the year ended  December  31,  2000 was $9.8  million
compared to a loss of $6.6 million in the year ended December 31, 1999. The loss
per share for the year ended  December 31, 2000 was $0.03 compared to a loss per
share of $0.02  for the year  ended  December  31,  1999 on  shares  in issue of
291,206,073 (1999, 291,010,294).

SEGMENT ANALYSIS

The analysis of the Company's  revenues and operating loss between  segments for
the 3 years ended December 31, 2001 is as follows:

<TABLE>
<CAPTION>

Company                                                          2001             2000             1999
                                                                 $000             $000             $000
<S>                                                          <C>              <C>            <C>
Revenues

           UK                                                  75,705           73,035           76,844
           US                                                  23,501           22,929           17,342
                                                        --------------     ------------      -----------
                                                               99,206           95,964           94,186
                                                        --------------     ------------      -----------
Operating (loss)/ profit before other operating
(expenses)/income

           UK                                                   (784)          (1,615)          (2,853)
           US                                                   (109)            1,699            (454)
                                                        --------------     ------------      -----------
                                                                (893)               84          (3,307)
                                                        --------------     ------------      -----------
Other operating (expense)/income

           UK                                                 (2,653)          (1,819)            1,125
           US                                                       -                -            (300)
                                                        --------------     ------------      -----------
                                                              (2,653)          (1,819)              825
                                                        --------------     ------------      -----------
Operating loss

           UK                                                 (3,437)          (3,434)          (1,728)
           US                                                   (109)            1,699            (754)
                                                        --------------     ------------      -----------
                                                              (3,546)          (1,735)          (2,482)
                                                        --------------     ------------      -----------

</TABLE>

The  performance  of each  segment is  measured  by  revenues  and by  operating
profit/(loss) before other income/expense.
<TABLE>

UK
<CAPTION>
                                                               2001              2000           1999
                                                               $000              $000           $000
   <S>                                                       <C>              <C>            <C>
    Revenues                                                 75,705            73,035         76,844
    Operating loss before other operating
    (expenses)/ income                                        (784)           (1,615)        (2,853)

</TABLE>

Revenues  increased by 3.6% in the year ended  December 31, 2001 compared to the
year ended  December 31, 2000.  After  allowing for the effect of exchange  rate
movements  the increase was over 9%. The return of client  confidence  following
the  refinancing in January 2001 resulted in a 26% growth in orders (at constant
exchange  rates) over the prior year and this was  responsible for the growth in
revenues.

The operating loss before other operating  (expenses)/income  for the year ended
December  31,  2001 was $0.8  million  compared  to $1.6  million in the year to
December 31, 2000.  The  increase in revenues  reduced the losses,  but this was
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  ($350,000) and a
reduction in exchange gains ($900,000).

Revenues declined by 5% in the year ended December 31, 2000 compared to the year
ended  December  31,  1999.  After  allowing  for the  effect of  exchange  rate
movements  revenues increased by 1.4%. Order growth (at constant exchange rates)
in this period was 3%.

The operating loss before other operating  (expenses)/income  for the year ended
December  31, 2000 was $1.6  million  compared to $2.9 million in the year ended
December 31, 1999.  The main reason for the reduction in the operating  loss was
an increase in exchange gains of $1.3 million.

<TABLE>

US
<CAPTION>

                                                               2001             2000            1999
                                                               $000             $000            $000
  <S>                                                        <C>              <C>             <C>
  Revenues                                                   23,501           22,929          17,342
  Operating (loss)/profit before other operating
  (expense)                                                    (109)           1,699            (454)
</TABLE>

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's 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)/profit before other operating (expense) declined from a profit
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.

Revenues  increased by 32% in the year ended  December 31, 2000  compared to the
year ended December 31, 1999. This was driven by a 30% growth in orders.

Operating profit before other operating  expense for the year ended December 31,
2000 was $1.7  million,  an increase of $2.2 million on the year ended  December
31, 1999. The growth in revenues was the principal reason for this increase.

LIQUIDITY AND CAPITAL RESOURCES

On  January  20,  2001 the  Company's  bank loan of $32.9  million  ((pound)22.6
million) was refinanced and 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 secured by
guarantees  from LSR,  Huntingdon  Life  Sciences  Group  plc,  Huntingdon  Life
Sciences Ltd and Huntingdon Life Sciences Inc., collateralized by all the assets
of these companies. The loan was transferred to another 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.  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 14,  the bank  loan and  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 bank loan and the warrants
were $23,249,000 and $430,000 respectively.

Other  finance  has been  provided by a $2.9  million  ((pound)2  million)  loan
facility  made  available on September 25, 2000 by a director,  Mr Baker,  and a
$2.9 million  ((pound)2  million)  facility  from the Stephens  Group Inc.  made
available on July 19, 2001 (subsequently  transferred to a third party effective
February 11, 2002). 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,  approximately $260,000
remains  payable to Mr Baker and $ 250,000  remains  payable to FHP.  The former
Stephens  facility  is  repayable  on July 19,  2002,  and is secured  but it is
subordinated to the bank debt.  Interest is payable monthly at a rate of 10% per
annum.

The Board intends to ask LSR shareholders at the next  shareholders'  meeting to
approve the issuance of warrants to purchase up to 410,914  shares of LSR Voting
Common 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. 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  loan  and  the  warrants  were   $2,660,800   and  $250,000
respectively.

The remainder of the Company's  long term  financing is provided by  Convertible
Capital Bonds repayable in 2006. These Bonds,  totaling $50 million, were issued
in 1991 and remain  outstanding as at December 31 2001. They carry interest at a
rate of 7.5% per annum,  payable at biannual  breaks in March and September.  At
the current  conversion  rate the number of shares of Voting  Common Stock to be
issued on conversion and exchange of each unit of US$ 10,000 comprised in a Bond
would be 49 (2000-49).  The conversion  rate is subject to adjustment in certain
circumstances.

During the year ended  December 31, 2001 funds used were $0.9 million,  reducing
cash in hand and on  short-term  deposit from $ 3.3 million at December 31, 2000
to $2.4 million at December 31, 2001.  The funds were  utilized as follows (in $
millions):
<TABLE>
<CAPTION>
                                                                   2001                2000              1999

<S>                                                               <C>                <C>                <C>
Operating loss before other operating (expense)/income             (0.9)              (0.1)              (3.3)
Depreciation and amortisation                                       8.3                9.1                9.7
Working capital movement                                           (0.2)              (2.7)              (6.7)
Interest                                                           (6.5)              (7.2)              (6.4)
Capital expenditure                                                (3.3)              (3.6)               1.9
Other operating (expense)/income                                   (2.7)              (1.8)               0.4
Loan receipts (net) and share issues                                5.0                1.8               (8.7)
Effect of exchange rate changes on cash                            (0.7)              (0.7)              (0.6)
                                                               --------------
                                                               --------------      -------------     --------------
                                                                   (1.0)              (5.2)             (13.7)
                                                               --------------      -------------     --------------
</TABLE>

Capital  expenditure  in 1999 is net of the proceeds of the sale of the Wilmslow
site of $6.8 million.

Net days sales outstanding  (DSOs) at December 31, 2001 were 46 days, up from 36
days at  December  31,  2000.  Since  January  1999 DSOs at the quarter end have
varied from 26 days to 47 days so they are currently at a relatively high level.
Recent  experience  shows that DSOs have  increased  during  periods of business
expansion and fallen during  periods of  contraction.  Q4 2001  experienced a 5%
revenue increase compared to the prior quarter, whereas Q4 2000 experienced a 4%
revenue decrease  compared to the prior quarter.  The impact on liquidity from a
one-day change in DSO is approximately $290,000.

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 per share 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.  At December 31, 2001,  the Company had a working  capital  deficiency of
$1,963,000.  The Company  believes that projected cash flow from  operations and
the  completion  of the  private  placement  described  above will  satisfy  its
contemplated cash requirements for at least the next 12 months.

ORDERS

2001 saw a 9% growth in orders  with the return of client  confidence  after the
refinancing in January 2001.

The uncertainties surrounding the refinancing of the Company's bank debt and the
threats by animal rights  campaigners  directed at companies and their employees
in our client  industries,  had  resulted  in a weakness in orders in the latter
part of 2000.  However,  the very  public  support for the Company and its work,
coming from the UK Government and the Pharmaceutical, Biotechnology and Chemical
industries,  together with the completion of the refinancing in January 2001 led
to a resumption in order growth in 2001.

The increase in orders was driven by the Company's pharmaceutical business which
was 27% up on 2000. The main growth here was in the UK where the Company's
pharmaceutical business was 41% up on the previous year and this was responsible
for the overall growth of orders in the UK of 26%.

The non pharmaceutical business showed a decline,  principally due to the impact
of mergers within the industry. The effect of this was most marked in the US and
meant that business placed at the Princeton  laboratory was down after growth of
30% and 13% in 1999 and 2000 respectively.

EXCHANGE RATE FLUCTUATIONS AND EXCHANGE CONTROLS

The Company operates on a world-wide basis and generally invoices its clients in
the  currency  of the  country in which it  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 have decided not to hedge against this exposure.

Secondly  exchange  rate  fluctuations  have an  impact  on the  relative  price
competitiveness  of the Company vis a vis  competitors  who trade in  currencies
other than sterling or dollars.

Finally, the consolidated financial statements of Huntingdon and the stand-alone
financial  statements of LSR are denominated in US dollars.  Changes in exchange
rates  between  the UK  pounds  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 cumulative  translation  adjustment account.
Management have 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:

      YEAR ENDED              AT DECEMBER 31                 AVERAGE RATE (1)
      DECEMBER 31
----------------------    ------------------------     -------------------------
         1997                     0.6075                          0.6104
         1998                     0.6010                          0.6034
         1999                     0.6205                          0.6181
         2000                     0.6694                          0.6596
         2001                     0.6871                          0.6943

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

On March 25, 2002 the noon buying rate for sterling was $1.00 = (pound)0.7014.

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.

Whilst 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 Huntingdon as of December 31, 2001:
<TABLE>
<CAPTION>

                                                                Expected Maturity Date
                                        2002    2003     2004      2005      2006  Thereafter     Total  FairValue
                                        $000    $000     $000      $000      $000       $000       $000       $000
<S>             <C>                   <C>      <C>      <C>       <C>     <C>          <C>       <C>        <C>
Cash            - Pound Sterling         391                                                        391        391
                - Euro                    19                                                         19         19
Accounts
receivable      - Pound Sterling      10,108                                                     10,108     10,108
                - Euro                 2,128                                                      2,128      2,128
Debt            - Pound Sterling                                           37,238                37,238     37,238
</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  organisations 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 the  Company's  net
revenues  and net income,  either  through  in-house  research  and  development
divisions doing more work internally to utilise  capacity or through the loss of
studies  to  other  competitors  on  pricing.  As  the  Company  operates  on an
international basis, movements in exchange rates, particularly against sterling,
can have a significant impact on its price competitiveness.

INDUSTRY CONSOLIDATION

The  process  of  consolidation   within  the  pharmaceutical   industry  should
accelerate the move towards outsourcing work to contract research  organisations
such as the Company 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  rationalised  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

During  the past two  years  animal  rights  extremists  have made  threats  and
committed acts of violence against the Company,  its employees and firms that do
business  or are  believed  to do  business  with the  Company.  Such  acts have
included physical damage to employees' cars and homes and violent demonstrations
against the Company  and firms that are  believed to be clients of the  Company.
While the Company does not  disclose  the  identity of its clients,  the Company
believes  that these  threats and acts of violence  may have a material  adverse
affect on its ability to attract business and to hire employees.

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 a
duration in excess of one year.

CRITICAL 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 accounting principles generally accepted in the
United States.  The Company  considers the following  accounting  policies to be
critical 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 two years.  Revenue from
these  contracts  is  generally   recognized  under  either  the  percentage  of
completion  method of  accounting  or as services  are  rendered or products are
delivered.  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 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.  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  milestones 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 authorisation, 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 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.

Taxation

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 carryforwards. 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 flow.

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 is effective for the Company
for the first quarter of the fiscal year ended December 31, 2002. As of December
31, 2001 the Company had no goodwill or intangible  assets on its balance sheet.
The adoption of this standard  will have no impact on the  Company'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") 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.  The Company  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 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  Statement  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 Company  does not  believe  that
adoption  of this  statement  will  have a  material  impact on its  results  of
operations, financial position or cash flows.

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

Market  risk  represents  the risk of loss  that  may  impact  the  consolidated
financial  position,  results of  operations  or cash flows of the Company.  The
Company is exposed to market  risk in the areas of  interest  rates and  foreign
currency exchange rates.

INTEREST RATES

The  Company's  exposure to market risk for  changes in interest  rates  relates
primarily  to the  Company's  debt  obligations.  The  Company  has a cash  flow
exposure on its bank loans due to its variable LIBOR  pricing.  In the 12 months
ended  December  31,  2001  a 1%  change  in  LIBOR  would  have  resulted  in a
fluctuation in interest expense of approximately $325,000.

FOREIGN EXCHANGE RISK

See Item 7 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations, Exchange Rate Fluctuations and Exchange Controls.

For disclosure of other risks see Item 7 - 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

Life Sciences Research, Inc.

Report of Deloitte & Touche - Report of Independent Auditors                27

Balance Sheet - December 31, 2001                                           28

Statement of Operations-
Period from July 19, 2001 (date of inception)
to December 31, 2001                                                        29

Statement of Shareholder's Deficit -
Period from July 19, 2001 (date of inception)
to December 31, 2001                                                        30

Statement of Cash Flows - Period from July 19, 2001
(date of inception) to December 31, 2001                                    31

Notes to Financial Statements                                               32

Huntingdon Life Sciences Group plc

Report of Deloitte & Touche - Report of Independent Auditors                35

Consolidated Balance Sheets - December 31, 2001 and 2000                    36

Consolidated Statements of Operations and
Comprehensive Loss - Years ended December 31, 2001,
2000 and 1999                                                               37

Consolidated Statements of Changes in Shareholders'
(Deficit)/Equity - Years ended December 31, 2001,
2000 and 1999                                                               38

Consolidated Statements of Cash Flows - Years ended
December 31, 2001, 2000 and 1999                                            39

Notes to Consolidated Financial Statements                                  40


<PAGE>


REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Shareholders of Life Sciences Research, Inc.

We have audited the accompanying  balance sheet of Life Sciences Research,  Inc.
(the  "Company")  as  of  December  31,  2001  and  the  related  statements  of
operations,  shareholder's  deficit  and cash flows for the period from July 19,
2001 (date of inception) to December 31, 2001.  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 audit.

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

In our  opinion,  such  financial  statements  present  fairly,  in all material
aspects,  the financial  position of the Company as of December 31, 2001 and the
result of its  operations  and its cash flows for the period  from July 19, 2001
(date  of  inception)  to  December  31,  2001  in  conformity  with  accounting
principles generally accepted in the United States of America.




Deloitte & Touche

Chartered Accountants
London
England

April 12, 2002


<PAGE>


Life Sciences Research, Inc.

Balance Sheet

                                                            December 31, 2001
                                    ASSETS                            $

Current assets:
Cash                                                                 150
Prepaid expenses                                                 217,305
                                                           --------------
Total current assets                                             217,455
                                                           --------------

                                                           --------------
Total assets                                                     217,455
                                                           --------------

                      LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities:
Accounts payable                                               1,399,000
                                                           --------------
Total current liabilities                                      1,399,000
                                                           --------------

                                                           --------------
Total liabilities                                              1,399,000
Shareholder's deficit
Voting Common Stock, $0.01 par value
50,000,000 shares authorised and 100 shares issued                     1
Paid-in capital                                                  430,149
Accumulated deficit                                          (1,611,695)
                                                           --------------
Total shareholder's deficit                                  (1,181,545)
                                                           --------------
                                                           --------------
Total liabilities and shareholder's deficit                    (217,455)
                                                           --------------
                                                           --------------

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


<PAGE>


Life Sciences Research, Inc.

Statement of Operations
Period from July 19, 2001 (date of inception) to December 31, 2001


                                                                 $

Other operating expenses                                      1,611,695
                                                        ----------------
Net Loss                                                      1,611,695
                                                        ----------------


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



<PAGE>

<TABLE>

Life Sciences Research, Inc.

Statement of Shareholders' Deficit
Period from July 19, 2001 (date of inception) to December 31, 2001
<CAPTION>

                                       Common Stock       Paid in        Accumulated           Total
                                                  $       Capital            Deficit
                                                                $                  $               $
<S>                                             <C>     <C>              <C>               <C>
Issuance of stock                                1           149                   -              150
Issuance of warrants (note 4)                            430,000                   -          430,000
Net loss                                         -             -          (1,611,695)      (1,611,695)

                                       ------------- ------------- ------------------ ---------------
Balance, December 31, 2001                       1       430,149          (1,611,695)      (1,181,545)
                                       ------------- ------------- ------------------ ---------------

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

<PAGE>


Life Sciences Research, Inc.

Statement of Cash Flows
Period from July 19, 2001 (date of inception) to December 31, 2001

Cash flows from operating activities:                           $

     Net loss                                              (1,611,695)
     Adjustments  to  reconcile  net  loss  to net
     cash  used in operating activities
          Issuance of warrants (note 4)                       430,000
          Prepaid expenses                                   (217,305)
          Accounts payable                                  1,399,000
                                                      ----------------
     Net cash used in operating activities                          -


Cash flows from financing activities:

     Proceeds from issue of common stock                            150
                                                       ----------------
     Net cash provided by financing activities                      150

Net increase in cash                                                150

Cash, beginning of period                                            -

Cash, end of period                                                 150
                                                       ----------------

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

<PAGE>


Life Sciences Research, Inc.

Notes to Financial Statements
Period from July 19, 2001 to December 31, 2001

1.       Organisation

Life Sciences  Research,  Inc.  ("LSR") was incorporated in Maryland on July 19,
2001  solely for the  purpose of making an offer (the  "Offer")  to acquire  the
whole of the issued and  outstanding  ordinary share capital of Huntingdon  Life
Sciences  Group  plc  ("Huntingdon"),  a UK based  group.  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.  The Company  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").

Since  incorporation,  LSR  has had no  operations  and  has  incurred  expenses
relating principally to the Offer and the issuance of warrants.  The reasons for
the Offer are to enable the proposed  investors in LSR (the "LSR  Investors") to
invest in Huntingdon on terms they consider to be advantageous  and to allow the
ownership of Huntingdon to be re-domiciled to the United States.

Huntingdon 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 Huntingdon's clients' products. Huntingdon's services are designed
to meet the regulatory requirements of governments around the world.

2.       Basis of preparation

Exchange Offer and private  offering costs:  As noted above,  from July 19, 2001
(date of inception) to December 31, 2001,  LSR had no operations of its own, but
nevertheless  incurred  expenses  relating  to the Offer  and has also  incurred
offering costs  associated with a private offering of securities that occured in
2002 (see note 6, Subsequent  Events).  The expenses  relating to the Offer have
been expensed as incurred and as the costs of the private  offering will be paid
from the  proceeds  of that  offering,  the costs  have been  capitalised  as of
December 31, 2001 as prepaid expenses and will be netted against the proceeds of
the private offering upon completion.

Income tax: Pursuant to Statement of Financial Accounting Standards ("SFAS") No.
109,  "Accounting for Income Taxes" ("SFAS 109"), the provision for income taxes
includes US taxes  currently  payable and  deferred  income  taxes  arising as a
result of temporary  differences between financial and tax reporting  calculated
in accordance with the comprehensive liability method of accounting.  Under this
method, a company is required to recognise a deferred tax asset or liability for
all  temporary  differences  and  operating  losses.  Deferred  tax  assets  and
liabilities are measured using enacted tax rates in effect for the year in which
those temporary differences are expected to be recovered or settled.  Under SFAS
109, the effect on deferred tax assets and  liabilities  of changes in tax rates
is recognised in income in the period that the enactment date changes.  Deferred
tax assets and liabilities are reduced through the  establishment of a valuation
allowance where,  based on available  evidence,  it is more likely than not that
the  deferred  tax  assets  will not be  realised.  As of  December  31,  2001 a
valuation  allowance  has been recorded to reduce the deferred tax asset balance
to zero.

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

3.       Other operating expenses

Other operating expenses represent fees for legal services relating to the Offer
by LSR for  securities  of  Huntingdon.  LSR is  solely  liable  for such  fees;
Huntingdon did not issue any guarantee to fund such expenses.

4.       Share capital

LSR's authorized  share capital is comprised of (a) 50,000,000  shares of voting
common stock,  par value $.01 per share ("Voting Common  Stock");  (b) 5,000,000
shares of non-voting common stock, par value $.01 per share ("Non-Voting  Common
Stock");  and (c) 5,000,000  shares of preferred stock, par value $.01 per share
("Preferred Stock"). The holders of shares of Non-Voting Common Stock may, on at
least 75 days' notice, exchange all or any portion of their shares of Non-Voting
Common Stock for shares of Voting Common Stock, provided that such exchange does
not result in any person  becoming the  beneficial  owner of more than 5% of the
shares of Voting Common Stock.

On July 17, 2001, Mr. Stapfer, a director of LSR, purchased 100 shares of LSR at
a purchase price of $1.50 per share.

As of December 31, 2001, the issued share capital of LSR comprised of 100 shares
of Voting Common Stock.

Subscription Agreements

On October 9, 2001 LSR entered into a  subscription  agreement  with Mr. Stapfer
(the "Stapfer  Subscription  Agreement") pursuant to which Mr. Stapfer agreed to
purchase  99,900 shares of LSR Voting Common Stock at a purchase  price of $1.50
per share (or an aggregate of $149,850).

On October 9, 2001,  LSR also entered  into a  subscription  agreement  with two
other  investors  in LSR,  pursuant  to which the  investors  agreed to purchase
900,000 shares of LSR Non-Voting  Common Stock  (convertible  into shares of LSR
Voting Common Stock) at a purchase  price of $1.50 per share (or an aggregate of
$1,350,000).

Warrants issued and to be issued by LSR

On October 9, 2001, LSR issued to Stephens Group Inc., a related party, warrants
to purchase up to 704,425  shares of LSR Voting Common Stock at a purchase price
of $1.50 per share.  These  warrants  arose out of  negotiations  regarding  the
refinancing  of  Huntingdon's  bank loan by the Stephens  Group Inc., in January
2001. LSR has recognized the fair value of the warrants  issued as an expense in
the current  period.  The fair value of the  warrants  was  estimated  using the
Black-Scholes pricing model.

The Board intends to ask LSR shareholders at the next  shareholders'  meeting to
approve the issuance of additional  warrants to purchase up to 410,914 shares of
LSR Voting Common Stock at a purchase price of $1.50 per share to FHP, a related
party.  These  warrants arose out of  negotiations  regarding the provision of a
loan  facility  made  available to Huntingdon on September 25, 2000 by Mr Baker,
who controls FHP.

The  warrants  are  exercisable  at any time on or after the date that the Offer
becomes wholly  unconditional  and will expire on the tenth  anniversary of that
date.  Both the  exercise  price and the number of shares of LSR  Voting  Common
Stock that are  issuable  upon the  exercise of the LSR  Warrants are subject to
adjustment in the case of certain events,  including stock splits,  dividends or
distributions,   a   reclassification,   or  the   reorganisation,   merger   or
consolidation of LSR.

5.       LSR 2001 Equity Incentive Plan

The LSR 2001 Equity  Incentive Plan (the "Plan") was adopted on October 5, 2001.
Under the Plan,  stock  options and other stock based awards can be granted as a
means to attract, retain and motivate key personnel. The number of shares of LSR
Voting Common Stock that may be subject to outstanding  awards granted under the
Plan may not exceed 20 per cent of the aggregate  number of shares of LSR Voting
Common Stock  outstanding.  No awards were granted  during 2001  pursuant to the
Plan.

6.       Subsequent events

As  described  in note 1, the Offer 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.  The Company 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 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  will  be  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) will be
carried  forward to LSR (the legal  acquirer and the reporting  entity) at their
carrying value before the combination.  Although  Huntingdon is 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.  Huntingdon  will be
the  operating  entity for  financial  reporting  purposes and future  financial
statements of LSR will represent  Huntingdon's financial position and results of
operations.

On January 10,  2002,  LSR issued  99,900  shares of Voting  Common  Stock to Mr
Stapfer,  a Director  of LSR,  and 900,000  shares of  Non-Voting  Common  Stock
(convertible into shares of LSR Voting Common Stock) to two other investors,  at
a purchase price of $1.50 per share (or an aggregate of $1,499,850).

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 per share 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  the conversion into LSR equity of debt owed by
Huntingdon  to Mr Baker ($2.1  million) and FHP ($0.3  million) and $825,000 was
paid with  promissory  notes.  The $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  $260,000  remains payable by Huntingdon to Mr Baker
and $250,000 remains payable to FHP.


<PAGE>


REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Shareholders of Huntingdon Life Sciences Group plc

We have audited the accompanying  consolidated balance sheets of Huntingdon Life
Sciences  Group plc and  subsidiaries  as of December  31, 2001 and 2000 and the
related   consolidated   statements  of  operations  and   comprehensive   loss,
shareholders' (deficit)/equity and cash flows for each of the three years in the
period  ended   December  31,  2001.   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 generally accepted auditing standards
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 the companies as of December 31,
2001 and 2000 and the results of their  operations  and their cash flows for the
three years in the period ended December 31, 2001 in conformity  with accounting
principles generally accepted in the United States of America.



Deloitte & Touche

Chartered Accountants
London
England

April 12, 2002


<PAGE>
<TABLE>

Huntingdon Life Sciences Group plc. and subsidiaries
Consolidated Balance Sheets
<CAPTION>

                                                                                      December 31,
                                                                                 2001            2000
                                                                                 $000            $000
                                      ASSETS
<S>                                                                        <C>               <C>
Current assets:
Cash and cash equivalents                                                       2,240           3,286
Accounts receivable, net of allowance
for uncollectible amounts of $164,000 (2000, $86,000)                          18,257          16,454
Unbilled receivables                                                           13,920           8,866
Inventories                                                                     1,275           1,354
Prepaid expenses and other                                                      2,560           2,002
Deferred income taxes (note 5)                                                     73             493
                                                                         -------------  --------------
Total current assets                                                           38,325          32,455
                                                                         -------------  --------------

Property and equipment, net (note 4)                                           90,353          97,660
Investments                                                                       202             230
Unamortised capital bonds issue costs                                             691             872
Deferred income taxes (note 5)                                                 16,471          14,890
                                                                         -------------  --------------
Total assets                                                                  146,042         146,107
                                                                         -------------  --------------
                       LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable                                                                8,500           5,941
Accrued payroll and other benefits                                              2,323           1,591
Accrued expenses and other liabilities                                         10,336           6,602
Fees invoiced in advance                                                       17,722          16,221
Short-term debt (note 6)                                                          158          32,325
Related party loans (note 6)                                                        -           2,989
                                                                         -------------  --------------
Total current liabilities                                                      39,039          65,669
                                                                        --------------  -------------
Long-term debt (note 6)                                                        59,302          50,209
Related party loans (note 6)                                                   28,821               -
Other long-term liabilities (note 7)                                              174           1,817
Deferred income taxes (note 5)                                                 22,248          24,346
                                                                         -------------  --------------
Total liabilities                                                             149,584         142,041
Commitments and contingencies (note 8)
Shareholders (deficit)/equity  (note 9)
Authorised Shareholders' Equity, 400,000,000 (2000: 400,000,000)
five pence Ordinary Shares.
Issued and outstanding 293,510,294 (2000: 292,184,962)                        24,114           24,030
five pence Ordinary Shares

Paid-in capital                                                               41,980           41,300
Currency translation adjustment                                              (4,360)          (4,434)
Accumulated deficit                                                         (65,276)         (56,830)
                                                                         ------------     ------------
Total shareholders' (deficit)/equity                                         (3,542)            4,066
                                                                         ------------     ------------

                                                                         ------------     ------------
Total liabilities and shareholders' (deficit)/equity                         146,042          146,107
                                                                         ------------     ------------

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

<PAGE>
<TABLE>

Huntingdon Life Sciences Group plc and subsidiaries
Consolidated Statements of Operations and Comprehensive Loss
<CAPTION>


                                                                      Year Ended December 31,
                                                                  2001                  2000                1999
                                                                  $000                  $000                $000

<S>                                                        <C>                  <C>                  <C>
Revenues                                                        99,206                95,964              94,186
Cost of sales                                                 (84,133)              (80,740)            (82,890)
                                                    -------------------     -----------------     ---------------
Gross profit                                                    15,073                15,224              11,296
Selling and administrative expenses                           (15,966)              (15,140)            (14,603)
Other operating (expense)/income (note 12)                     (2,653)               (1,819)                 825
                                                    -------------------     -----------------     ---------------
Operating loss                                                 (3,546)               (1,735)             (2,482)
Interest income                                                    104                   181                 571
Interest expense                                               (6,614)               (7,385)             (6,934)
Other expense                                                  (1,386)               (3,544)             (1,550)
                                                    -------------------     -----------------     ---------------
Loss before income taxes                                      (11,442)              (12,483)            (10,395)
Income tax benefit (note 5)                                      2,996                 2,720               3,790
                                                    -------------------     -----------------     ---------------
Net loss for the year                                          (8,446)               (9,763)             (6,605)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments                            74               (1,109)               (689)
                                                    -------------------     -----------------     ---------------
Total comprehensive loss for the year                          (8,372)              (10,872)             (7,294)
                                                    -------------------     -----------------     ---------------
                                                    -------------------     -----------------     ---------------
Loss per share
 -basic                                                        $(0.03)               $(0.03)             $(0.02)
 -diluted                                                      $(0.03)               $(0.03)             $(0.02)

Weighted average number of shares outstanding
 -basic                                                    293,421,084           291,206,073         291,010,294
 -diluted                                                  293,421,084           291,206,073         291,010,294

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

<PAGE>

<TABLE>

Huntingdon Life Sciences Group plc. and subsidiaries
Consolidated Statements of Changes in Shareholders' (Deficit)/Equity
<CAPTION>

                                        Ordinary   Ordinary   AdditionalPaidAccumulated      Accumulated      Total
                                         Shares     Shares        in          Deficit           Other
                                                                Capital                     Comprehensive
                                                                                            (Loss)/Income
                                                                                             (Cumulative
                                                                                             Translation
                                                                                            Adjustments)
                                              000        $000        $000            $000           $000        $000

<S>                                      <C>          <C>         <C>            <C>                <C>       <C>
Balance, December 31, 1998                291,010      23,942      41,300        (40,462)           (2,636)    22,144
Net loss for the year                           -           -           -         (6,605)                 -   (6,605)
Cumulative translation adjustment               -           -           -               -             (689)     (689)
                                       -------------------------------------------------------------------------------
Balance, December 31, 1999                291,010      23,942      41,300        (47,067)           (3,325)    14,850
Issue of shares                             1,175          88           -               -                 -        88
Net loss for the year                           -           -           -         (9,763)                 -   (9,763)
Cumulative translation adjustments              -           -           -               -           (1,109)   (1,109)
                                       -------------------------------------------------------------------------------
Balance, December 31, 2000                292,185      24,030      41,300        (56,830)           (4,434)     4,066
Issues of shares                            1,325          84           -               -                 -        84
Issue of warrants (note 6)                      -           -         680               -                 -       680
Net loss for the year                           -           -           -         (8,446)                 -   (8,446)
Cumulative translation adjustments              -           -           -               -                74        74

                                       -------------------------------------------------------------------------------
Balance, December 31, 2001                293,510      24,114      41,980        (65,276)           (4,360)   (3,542)
                                       -------------------------------------------------------------------------------

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

<PAGE>

<TABLE>

Huntingdon Life Sciences Group plc. and subsidiaries
Consolidated Statements of Cash Flows
<CAPTION>

                                                                               Year Ended December 31,
                                                                         2001           2000          1999
                                                                         $000           $000          $000
<S>                                                                  <C>            <C>           <C>
Cash flows from operating activities:
Net loss                                                              (8,446)        (9,763)       (6,605)
Adjustments to reconcile net loss to net cash from operating
activities
Depreciation and amortisation                                           8,307          9,093         9,675
Foreign exchange translation loss on Capital Bonds                      1,272          3,713         1,572
Deferred income taxes                                                 (2,996)        (2,720)       (3,790)
Provision for losses on accounts receivable                                80            108            97
Profit on sale of property, plant and equipment                             -              -       (2,843)
Asset write down                                                            -              -         2,018
Amortisation of capital bonds issue costs                                 157            163           175
Changes in operating assets and liabilities:
Accounts receivable, unbilled receivables and prepaid expenses        (8,112)        (2,909)       (5,316)
Inventories                                                                44          (157)           541
Accounts payable, accrued expenses and other liabilities                5,732        (2,479)       (3,484)
Fees invoiced in advance                                                1,898          2,337         1,581

                                                                  ------------   ------------  ------------
Net cash used in operating activities                                 (2,064)        (2,614)       (6,379)
                                                                  ------------   ------------  ------------

Cash flows from investing activities:
Purchase of property, plant and equipment                             (3,295)        (3,648)       (4,893)
Proceeds from sale of property, plant and equipment                         -              -         6,818
                                                                  ------------   ------------  ------------
Net cash (used in)/ provided by investing activities                  (3,295)        (3,648)         1,925
                                                                  ------------   ------------  ------------

Cash flows from financing activities:
Proceeds from issue of ordinary shares                                     84             88             -
Proceeds from issue of warrants                                           680              -             -
Proceeds from long-term borrowings                                      4,321          1,728             -
Repayments of long-term borrowings                                       (93)              -       (8,656)

                                                                  ------------   ------------  ------------
Net cash provided by/(used in) financing activities                     4,992          1,816       (8,656)
                                                                  ------------   ------------  ------------
Effect of exchange rate changes on cash and cash equivalents            (679)          (743)         (599)
                                                                  ------------   ------------  ------------
Decrease in cash and cash equivalents                                 (1,046)        (5,189)      (13,709)
Cash and cash equivalents at beginning of year                          3,286          8,475        22,184
                                                                  ------------   ------------  ------------
Cash and cash equivalents at end of year                                2,240          3,286         8,475
                                                                  ------------   ------------  ------------
                                                                  ------------   ------------  ------------

Supplementary disclosures:
Interest paid                                                         (6,267)        (6,797)       (6,726)
Income taxes received                                                       -              -            45

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

<PAGE>

Huntingdon Life Sciences Group plc. and subsidiaries
Notes to Consolidated Financial Statements December 31, 2001, 2000 and 1999

1.       The Company and its Operations

Huntingdon   Life   Sciences   Group   plc   ("Huntingdon")   and   subsidiaries
(collectively,  the  "Company")  is a leading  Contract  Research  Organisation,
offering world-wide  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  discussed in note 14, on
October  16,  2001,  Life  Sciences  Research  Inc.  ("LSR")  made an offer (the
"Exchange  Offer")  to  acquire  all  of  the  outstanding  ordinary  shares  of
Huntingdon.

At  December  31,  2001,  the  Company  had  a  working  capital  deficiency  of
$1,963,000.  The Company  believes that projected cash flow from  operations and
the  completion of the private  placement  described in note 14 will satisfy its
contemplated cash requirements for at least the next 12 months.

2.       Basis of Financial Statements

These financial statements are prepared in conformity with accounting principles
generally  accepted in the United  States of America ("US GAAP").  These US GAAP
statements  are prepared  solely for the purposes of preparing the Annual Report
on Form 10-K.

Considering,  inter  alia,  that the  Company  has  significant  operations  and
activities  in the US, the Company has changed its  reporting  currency into the
United States  dollar (US$ or $) from pounds  sterling  ("(pound)");  prior year
financial  statements  have  been  recast  into the US$ in  accordance  with the
standards set forth in Statement of Financial Accounting Standards ("SFAS"), No.
52 "Foreign Currency Translation".

3.       Summary of Significant Accounting Policies

A summary of the principal accounting  policies,  all of which have been applied
consistently  throughout  the year ended  December 31, 2001,  and the  preceding
periods presented, is set out below:

Basis of consolidation

The consolidated financial statements incorporate the accounts of Huntingdon and
each of its  subsidiaries.  The results of subsidiaries  acquired or disposed of
during any period are included in the Consolidated  Statement of Operations from
or to, the date on which control passed.  Intercompany balances and transactions
have been eliminated on 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 at the lower of cost, on a FIFO basis, or net realisable
value. They comprise materials and supplies.

Impairment of long-lived assets

In accordance with SFAS No.121, "Accounting for the Impairment of the Long Lived
Assets and for Long  Lived  Assets to be  Disposed  Of",  long lived  assets and
certain  identifiable  intangibles  held or used by a company are required to be
reviewed  whenever  events or changes in  circumstances  indicate  that carrying
amount  of an  asset  may  not be  recoverable.  In  performing  the  review  of
recoverability,  the Company  estimates the future cash flows expected to result
from the use of the  asset and its  eventual  disposition.  If the  undiscounted
future  cash flow is less than the  carrying  amount of the asset,  the asset is
deemed  impaired.  The amount of the  impairment  is measured as the  difference
between the carrying value and the fair value of the asset. Generally long lived
assets and certain  identifiable  intangibles  to be disposed of are reported at
the lower of carrying amount or fair value less cost to sell.

Depreciation

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:

         Freehold buildings and facilities                  15 - 50 years
         Plant and equipment                                5 - 15 years
         Vehicles                                           5 years
         Computer software                                  5 years

Goodwill arising on consolidation

Goodwill,  being  the  excess  of  the  purchase  consideration  for  subsidiary
companies  acquired over the fair market values  ascribed to their  identifiable
net assets at the date of  acquisition,  is amortized  over its expected  useful
life. In subsequent  years,  goodwill  carried  forward is assessed based on its
fair  value  and any  permanent  impairment  is  written-off  at the  time it is
identified.

All goodwill  has been fully  amortised as of December 31, 2001 and December 31,
2000.

Taxation

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 carryforwards. 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 two years.  Revenue from
these  contracts  is  generally   recognized  under  either  the  percentage  of
completion  method of  accounting  or as services  are  rendered or products are
delivered.  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 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.  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  milestones 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 authorisation, but prior to the actual commencement of the study).

Contracts

Profit on  contracts,  irrespective  of  length,  is  recognised  as the work is
carried  out. The profit is  calculated  to reflect the  proportion  of the work
performed,  by  recording  turnover  and  related  costs  as  contract  activity
progresses.  Turnover is calculated as that  proportion of total  contract value
which costs  incurred to date bear to total  expected  costs for that  contract.
Full provision is made for losses on contracts when they are first foreseen.

Foreign currencies

Transactions in currencies other than the functional  currency of the entity are
recorded at the rates of  exchange  prevailing  at the date of the  transaction.
Monetary assets and liabilities in currencies other than the functional currency
are translated at the rates of exchange prevailing at the balance sheet date and
the  related  transaction  gains and losses are  reported in the  statements  of
operations.  Certain  intercompany  loans are  determined  to be of a  long-term
investment  nature.  The  Company  records  transaction  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.  Translation adjustments are presented as a separate
component of other  comprehensive  income in the  financial  statements  and are
included in net earnings only upon sale or liquidation of the underlying foreign
subsidiary or associated company.

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
analysed between amounts falling due within and after one year.  Operating lease
rentals are charged to the Consolidated Statement of Operations as incurred.

Pension costs

The  Company has 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 provides  benefits to employees based on their
final  pensionable  salary.  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".

Costs of raising long-term debt

The costs of raising  long-term  financing are  capitalised  as an asset and are
amortised,  using  the  effective  interest  method,  over the term of the loan.
Convertible debt is reported as a liability unless conversion actually occurred.

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.

Loss per share

Loss per share is  computed  in  accordance  with SFAS No.  128,  "Earnings  Per
Share".  Basic loss per share is  computed  by dividing  net loss  available  to
common  stockholders by the weighted average number of shares outstanding during
the  year.  The  computation  of  diluted  loss  per  share  is  similar  to the
computation of basic 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 loss per share
reflects the  potential  dilution  that could occur if dilutive  securities  and
other  contracts to issue  ordinary  shares were  exercised  or  converted  into
ordinary  shares or resulted in the issuance of ordinary shares that then shared
in the losses of the Company.

Segment analysis

The Company's  operations have been aggregated into a single reportable segment,
contract research,  which operates in two geographical areas, the UK and the US.
The  Company's  operating  locations  have  similar  economic   characteristics,
production processes and types of customers and provide similar services.

Stock-based compensation

The Company  accounts for its stock option and  stock-based  compensation  plans
using the  intrinsic-value  method  prescribed  in Accounting  Principles  Board
Opinion  No.  25,  "Accounting  For  Stock  Issued  To  Employees"  ("APB  25").
Accordingly,  the Company  computes  compensation  costs for each employee stock
option  granted as the amount by which the estimated fair value of the Company's
common  voting  stock on the date of the grant  exceeds the amount the  employee
must pay to acquire the shares.  As  required by SFAS No. 123,  "Accounting  For
Stock-Based Compensation" ("SFAS 123"), the Company has included, in Note 9, the
required SFAS 123 pro forma disclosures of net loss and loss per share as if the
fair value-based method of accounting had been applied.

Reclassifications

Certain  reclassifications have been made to the prior periods to conform to the
current period presentation.

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 is effective for LSR for the
first quarter of the fiscal year ended December 31, 2002. As of December 31, LSR
had no goodwill or intangible  assets on its balance sheet. The adoption of this
statement will have 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").  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 its  results  of
operations, financial position or cash flows.

In  October  2001,  the FASB  issued  Statement  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 FASB Statement 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.  Huntingdon  does  not  believe  that
adoption  of this  statement  will  have a  material  impact on its  results  of
operations, financial position or cash flows.

4.  Property and Equipment

Property  and  equipment  as of  December  31,  2001  and 2000  consists  of the
following:
<TABLE>
<CAPTION>


                                                                      2001                          2000
                                                                      $000                          $000
<S>                                                               <C>                           <C>
Property and equipment at cost:
Freehold property                                                   95,967                        95,346
Plant equipment and vehicles                                        87,518                        88,308
Assets in the course of construction                                   283                         1,090
                                                        -------------------            ------------------
                                                                   183,768                       184,744
Less: Accumulated depreciation and amortisation                   (93,415)                      (87,084)
                                                        -------------------            ------------------
Property and equipment, net                                         90,353                        97,660
                                                        -------------------            ------------------
</TABLE>
Depreciation and amortisation expenses aggregated  $8,307,000,  $9,093,000,  and
$9,675,000 for 2001, 2000 and 1999 respectively.

The net book value of assets held under capital  leases and included above under
plant, equipment and vehicles is as follows:

                                        Cost       Depreciation   Net book
                                                                    value
                                        $000          $000          $000
At December 31, 2001                     514          198            316
At December 31, 2000                     484          120            364


5.  Income taxes

The  components  of loss before  taxes and the  related  benefit for tax for the
years ended December 31 are as follows:
<TABLE>

<CAPTION>

(Loss)/profit before taxes                                       2001             2000              1999
                                                                 $000             $000              $000
<S>                                                          <C>              <C>               <C>
United Kingdom                                               (11,036)         (14,182)           (9,700)
United States                                                   (406)            1,699             (695)
                                                         -------------    -------------     -------------
                                                             (11,442)         (12,483)          (10,395)
                                                         -------------    -------------     -------------

The benefit for income taxes by location of the                  2001              2000             1999
taxing jurisdiction for the years ended December                 $000              $000             $000
31, consisted of the following:
UK corporation tax calculated at 30% for all periods
presented                                                           -                 -               45
Deferred taxation     - United Kingdom                          2,886             3,108            3,639
                      - United States                             110             (388)              106
                                                         -------------     -------------    -------------
                                                                2,996             2,720            3,790
                                                         -------------     -------------    -------------

</TABLE>

<PAGE>

The  differences  between the benefit for income taxes and income taxes computed
using  the US  corporation  tax  rate for the  years  ended  December  31 are as
follows:
<TABLE>
<CAPTION>


                                                              % of Loss before income taxes
                                                                  2001        2000        1999
                                                                     %           %           %
<S>                                                               <C>         <C>         <C>
US statutory rate                                                   40          40          40
Effect of non-taxable income                                         -           -           6
Foreign rate differential                                         (11)        (10)         (9)
Non-deductible foreign exchange loss                               (3)         (4)         (6)
Effect of reduction in UK tax rate on deferred tax                   -           -           5
Prior year adjustments                                               -         (4)           -
                                                            -----------  ----------  ----------
Effective tax rate                                                  26          22          36
                                                            -----------  ----------  ----------
</TABLE>

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:

                                                       2001             2000
                                                       $000             $000
Current deferred tax assets
Accrued liabilities                                      73              493
                                                ------------      -----------
                                                         73              493
                                                ------------      -----------
Non current deferred tax assets
Net operating losses                                 16,471           14,890
Capital losses                                       12,411           12,411
Valuation allowance                                (12,411)         (12,411)
                                                ------------      -----------
Net non-current deferred tax assets                  16,471           14,890
                                                ------------      -----------

                                                ------------      -----------
Net deferred tax assets                              16,544           15,383
                                                ------------      -----------
Non current deferred tax liabilities
Property and equipment                               22,248           24,346

                                                ------------      -----------
Deferred tax liabilities                             22,248           24,346
                                                ------------      -----------
                                                ------------      -----------

                                                ------------      -----------
                                                ------------      -----------
Net deferred tax liabilities                          5,704            8,963
                                                ------------      -----------

Of the gross amount of net operating  losses,  $41,377,000  have no expiry date,
$290,000 expire in 2011,  $3,955,000 expire in 2012,  $6,162,000 expire in 2013,
$522,000 expire in 2019 and $400,000 in 2021.

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 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.

6.  Short and Long-Term Debt

                                                      2001              2000
                                                      $000              $000
Bank overdrafts and loans - short-term:
Bank loan                                                -            30,750
Capital leases                                         158                81
Other loans                                              -             1,494
                                             --------------     -------------
                                                       158            32,325
Related party loans                                      -             2,989
                                             --------------     -------------
                                                       158            35,314
                                             --------------     -------------
Loans - long-term:
Bank loans                                           9,192                 -
Capital leases                                         110               209
Convertible Capital Bonds                           50,000            50,000
                                             --------------     -------------
                                                    59,302            50,209
Related party loans                                 28,821                 -
                                             --------------     -------------
                                             --------------     -------------
                                                    88,123            50,209
                                             --------------     -------------

The bank loan  outstanding  at December 31, 2000 was  refinanced  on January 20,
2001.  Interest  on this loan was  payable  quarterly  at the London  Inter Bank
Offered Rate  ("LIBOR") plus 1.75% for the first  $28,380,000  and LIBOR plus 2%
for drawings over  $28,380,000 up until August 31, 2000.  From September 1, 2000
until January 19, 2001 it was payable at LIBOR plus 3%.

As  indicated  above,  on  January  20,  2001 the  aforementioned  bank loan was
refinanced  by means of a loan  from  HLSF  LLC,  a  subsidiary  company  of the
Stephens Group Inc., a related  party,  and the other two banks who were part of
the  original  loan  syndicate.  The loan is now  repayable on June 30, 2006 and
interest is payable  quarterly at LIBOR plus 1.75%. The interest rate payable as
of December 31, 2001 was 6.185%.  At December 31, 2001  $23,249,000  of the loan
relating  to HLSF  LLC and has  therefore  been  included  in  "Loans-long-term:
Related party loans",  while the remaining third party elements of $9,192,000 is
included in "Loans-long-term: Bank loan". The bank loan is secured by guarantees
from LSR, Huntingdon Life Sciences Group plc, Huntingdon Life Sciences Ltd., and
Huntingdon  Life  Sciences  Inc.,  collateralised  by all the  assets  of  those
companies.  The loan was  transferred  to another party  effective  February 11,
2002.

On October 9, 2001, on behalf of the Company,  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.  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 No. 14 "Accounting for Convertible Debt and
Debt Issued with Stock Purchase  Warrants" ("APB 14") the bank loan and 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  bank  loan and the
warrants were $23,249,000 and $430,000 respectively.

A $2,910,800  ((pound)2,000,000) loan facility was made available to the Company
on September 25, 2000 by a director, Mr Baker. $1,445,400 of this was drawn down
immediately,  a further  $705,400 and $300,000 were drawn down on March 21, 2001
and May 21, 2001  respectively  while the final  $450,000 was drawn down on July
18, 2001.  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  $2,100,000  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  $260,000  remains  payable to Mr Baker and  $250,000
remains payable to FHP.

The  Board  of  LSR  intends  to ask  the  LSR  shareholders  at  the  next  LSR
shareholder's  meeting to approve  the  issuance  of  warrants to purchase up to
410,914  shares of LSR  Voting  Common  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. The Terms for the issuance of
such  warrants were  finalised in the last quarter of 2001.  In accordance  with
APB14 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 loan and the
warrants were $2,660,800 and $250,000 respectively.

A $2,910,800  ((pound)2,000,000)  facility was made  available to the Company on
July 19, 2001 from the Stephens  Group Inc., of which  $1,455,400 was drawn down
on August 20, 2001 with the final  $1,455,400  drawn down on September 19, 2001.
The loan is repayable on July 19, 2002,  although it is subordinated to the bank
loan, it is secured and interest is payable  monthly at a rate of 10% per annum.
The loan was transferred to another party effective February 11, 2002.

On August 12, 1991, an issue of  $50,000,000 7 1/2%  Convertible  Capital Bonds,
2006 ("the Bonds"), was made by a subsidiary company, HIH Capital Ltd. The Bonds
are guaranteed on a subordinated  basis by the Company,  and are  convertible by
the holders at any time into Redeemable  Preference  Shares of HIH Capital Ltd.,
which in turn are  exchangeable for Voting Common Stock of $0.01 each in LSR. At
the current  conversion  rate the number of shares of Voting  Common Stock to be
issued on conversion and exchange of each unit of US$ 10,000 comprised in a Bond
would be 49 (2000 - 49). The Bond issuance costs of $2,314,000 were  capitalized
and are being amortised over the life of the Bonds using the effective  interest
method.  The Bonds are redeemable by the holders at the maturity date and by the
Company at any time. To date no Bonds have been redeemed.

Fair value of financial instruments

The  Company's   principal   financial   instruments   comprise  cash  and  cash
equivalents,  long term loans,  and the Convertible  Capital Bonds.  The Company
does not hold financial instruments for trading purposes.

The estimated fair value of the Company's  financial  instruments as of December
31, 2001 and 2000 is summarized  below.  Certain  estimates and judgements  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>
                                                       2001                        2000
                                               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                         2,240          2,240        3,286        3,286
Short-term debt                                     158            158       35,314       35,314
Long-term debt (excluding the Convertible        38,123         38,123          209          209
Capital Bond)
Convertible Capital Bond                         50,000         17,000       50,000       12,532

</TABLE>

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

Cash  and  cash  equivalents:  The  estimated  fair  value  of  these  financial
instruments approximates their carrying values due to their short maturities.

Short-term  debt:  The  estimated  fair  value  of these  financial  instruments
approximates their carrying value due to their short maturities.

Long-term  debt: The estimated fair values of the Company's fixed long-term debt
is based on current interest rates available to the Company for debt instruments
with similar terms and remaining maturities.  The estimate of fair values of the
Company's  long-term  variable  rate  debt  approximates  fair  value due to the
variable nature of the interest charged.

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

7.        Other Long-Term Liabilities

                                                    2001                2000
                                                    $000                $000
           Pension liabilities                         -               1,434
           Other                                     174                 383
                                          ---------------     ---------------
                                                     174               1,817
                                          ---------------     ---------------

8.       Commitments and Contingencies

Operating leases

Operating lease expenses were as follows
                                              2001        2000        1999
                                              $000        $000        $000
Hire of plant and equipment                    924       1,184        277
Other operating leases                         127         69          32

The Company has commitments payable under operating leases as follows:

                                                    Plant and
                                                   machinery
              Year ended December 31                    $000

              2002                                     1,051
              2003                                       490
              2004                                       268
              2005                                        60
              2006                                        47
                                            -----------------
                                                       1,916
                                            -----------------

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

Share capital

As of December 31, 2001 and 2000,  Huntingdon had  293,510,294  and  292,184,962
respectively, of Ordinary Shares of 5 pence each.

Warrants issued in conjunction with long term debt

In October 2001, on behalf of the Company, LSR issued warrants to purchase up to
704,425  shares of LSR  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.

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

In  accordance  with the APB 14 these loans and warrants  were recorded at their
pro rata fair  values in  relation  to the  proceeds  received  with the portion
allowable to the warrants accounted for as additional paid-in-capital.  See note
6.

The pro rata fair  value of the  warrants  was  $680,000  using a  Black-Scholes
option-pricing method with the following weighted average assumptions:  dividend
yield  0%;  risk  free  interest  rate  3.72%;  expected  life of 5 years,  and;
estimated volatility of 40%.

Share option plans

Under the  following  Plans options were granted to acquire  Ordinary  Shares of
Huntingdon.  The ability to exercise  these  options  lapsed on March 26,  2002,
except for those granted under the Unapproved Share Option Plan.

Unapproved Share Option Plan

On April 8, 1983,  Huntingdon  adopted  the  Unapproved  Share  Option Plan (the
"Unapproved  Plan") pursuant to which options to acquire  Ordinary Shares may be
granted to any person who is required to devote  substantially  the whole of his
time  (being not less than 25 hours per week) to serve as a Director or employee
of Huntingdon or one of its subsidiaries.  The maximum number of Ordinary Shares
which may be issued under the Unapproved  Plan according to the rules thereof is
10% of the issued share  capital of Huntingdon  from time to time,  less options
outstanding under the Approved Plan from time to time.

An option  granted  pursuant to the  Unapproved  Plan may be exercised two years
after the grant in respect of not more than 50% of the Ordinary  Shares  subject
to the option.  An option may be exercised in full between three and seven years
after the grant in respect of the  unexercised  balance of the  Ordinary  Shares
subject to the option.

Approved Management Share Option Plan

On January 29, 1985, Huntingdon adopted a second share option plan, the Approved
Management Share Option Plan (the "Approved  Plan"),  which has been approved by
the Board of Inland Revenue in the UK (the "Inland Revenue")  pursuant to the UK
Finance Act 1984.  The rules of the Approved  Plan  broadly  follow those of the
Unapproved  Plan,  except  that an option may be  exercised,  subject to certain
exceptions, only between three and ten years after it is granted.

Pursuant to the Approved Plan, options to acquire Ordinary Shares may be granted
to any Director or employee of Huntingdon whose terms of employment  require him
to work for at least  thirty-seven and one-half hours per week.  Approval of the
Approved  Plan  by  the  Inland  Revenue  means  that  important   personal  tax
concessions  are  available  to  participants  who reside in the UK. The maximum
number of Ordinary  Shares which may be issued under the Approved Plan according
to the rules thereof is 10% of the issued share capital from time to time,  less
options outstanding under the Unapproved Plan from time to time.

Both the Unapproved  Plan and the Approved Plan  terminated on December 31, 1997
with respect to the grant of new options.  Options  outstanding at that date are
not affected by such termination.

The grant of options under both the Unapproved  Plan and the Approved Plan was a
matter for the discretion of the Board of Directors of Huntingdon.  The exercise
price per share at which an option may be  exercised  is equal to the average of
the middle market quotations on the  International  Stock Exchange of the United
Kingdom and Republic of Ireland Ltd. for the Ordinary Shares on the five dealing
days  prior to the date of grant or, if no  established  market in the  Ordinary
Shares  exists,  the fair value of an Ordinary Share as determined by the Board.
Generally,  an option may not be  exercised  unless at the date of exercise  the
participant is then, and has been continuously since the grant of the option, in
the full-time employ of Huntingdon. This rule, however, is subject to alteration
in specific cases at the discretion of the Board.

Under the terms of the plans, the following  Options to purchase Ordinary Shares
of 5 pence in Huntingdon have been granted and vested,  but not  relinquished or
exercised as at December 31, 2001.

Date of grant         Number of shares outstanding       Option price

UNAPPROVED PLAN
December 18, 1995            112,500                     (pound)0.77
November 21, 1996            50,000                            $1.60
December 1, 1997             100,000                     (pound)0.50
December 31, 1997            260,600                     (pound)0.465
December 31, 1997            295,000                           $0.77

APPROVED PLAN
February 13, 1995            110,000                     (pound)0.49
December 11, 1995            380,000                     (pound)0.78
December 11, 1995            80,000                            $1.19
December 18, 1995            35,750                      (pound)0.77
November 21, 1996            367,500                     (pound)0.95
December 31, 1997            360,000                     (pound)0.465


Huntingdon Life Sciences Group Incentive Option Plan

The Huntingdon Life Sciences Group Incentive Option Plan ("Incentive Plan"), was
adopted on June 3, 1999.  The Incentive  Plan was designed to reward  short-term
improvement  in  financial  performance.  Options  are  available  for  grant to
management  and  senior  staff,  and  may be  subject  to the  achievement  of a
performance measure and personal performance  conditions.  Options may generally
be exercised from the third  anniversary of the date of grant.  Options lapse on
the tenth anniversary.

Date of grant             Number of shares outstanding at         Option Price
                                December 31, 2001

April 27, 2001                       7,750,000                    (pound)0.05

Huntingdon Life Sciences Sharesave Scheme

The Huntingdon  Life Sciences  Sharesave  Scheme  ("Sharesave  Scheme") was also
adopted at the Annual General Meeting held on June 3, 1999. Approximately 55% of
eligible  employees,  who will  fund the  exercise  of  their  options  with the
proceeds of a related  Save As You Earn (SAYE)  savings  contract,  accepted the
invitation to join the Sharesave Scheme.  Options granted pursuant to the Scheme
may generally be exercised from the Bonus Date, which falls on November 1, 2002.
Options generally lapse six months after the Bonus Date.

Date of grant                Number of shares outstanding at      Option Price
                                December 31, 2001

April 27, 2001                       3,982,456                     (pound)0.05

The Huntingdon Life Sciences Group Unapproved  Share Option Scheme  ("Unapproved
Scheme")

7,500,000  Founder Options had been granted but not relinquished or exercised at
December  31, 2001 at an option  price of 12.5 pence per  Ordinary  Share.  Such
options  are  exercisable  from the third  anniversary  of the date of the grant
subject to the share price reaching the following  pre-determined  targets for a
period of seven consecutive dealing days at any time after January 1, 1999.

           Target price per share         Proportion of options exercisable
                     25p                                 25%
                     50p                                 50%
                     75p                                 75%
                    100p                                 100%

1,500,000 options,  other than Founder Options,  which are generally exercisable
between  the third and tenth  anniversary  of the date of grant  subject  to the
attainment of performance related conditions,  were granted on March 29, 1999 at
a  Subscription  Price of 19.25 pence each and remained  outstanding on December
31, 2001.

Option Agreement

Mr Baker, a related party, was granted Options over 5,000,000 Ordinary Shares of
5 pence in  Huntingdon,  the  principal  terms  of  which  are the same as those
applicable to the Founder Options referred to above.

The following  table sets forth certain  information  relative to the changes to
options outstanding in the periods presented:

<TABLE>
<CAPTION>

                                                                                                Option Price
                                                                                        ------------------------------
                                            Unapproved        Approved      Unapproved        Dollars(pound) Sterling
                                                  Plan            Plan         Scheme*      per Share       per Share
<S>                                         <C>             <C>            <C>           <C>            <C>
Outstanding at December 31, 1998             2,272,120       2,583,850      13,500,000    0.77 - 1.60     0.125 -0.95
Granted                                              -               -       2,000,000              -               -
Forfeited                                    (796,700)       (407,350)       (500,000)    0.77 - 1.60     0.465 -0.95
                                         -----------------------------------------------------------------------------
Outstanding at December 31, 1999             1,475,420       2,176,500      15,000,000      0.77-1.60      0.125-0.95
Granted                                              -               -               -              -               -
Forfeited                                    (106,250)       (410,000)               -    0.77 - 1.60      0.465-0.95
                                         --------------  --------------  -------------- --------------  --------------
Outstanding at December 31, 2000             1,369,170       1,766,500      15,000,000    0.77 - 1.60    0.125 - 0.95

Granted                                              -               -               -              -               -
Forfeited                                    (551,070)       (433,250)     (1,000,000)      0.77-1.60      0.125-0.95
                                         -----------------------------------------------------------------------------
Outstanding at December 31, 2001               818,100       1,333,250      14,000,000    0.77 - 1.19      0.125-0.95
                                         =============================================================================
<FN>

*and Option Agreement
</FN>
</TABLE>

<TABLE>
<CAPTION>

                                                                                              Option Price
                                                                                   -----------------------------------
                                               Incentive            Sharesave            Dollars             Sterling
                                                    Plan               Scheme          per Share            per Share
<S>                                          <C>                  <C>                       <C>        <C>
Outstanding at December 31, 1998                       -                    -                  -                    -

Granted                                        2,650,000            7,193,520                  -       0.175 - 0.1925
Forfeited                                              -             (91,312)                  -                 0.14
                                         -----------------------------------------------------------------------------
Outstanding at December 31, 1999               2,650,000            7,102,208                  -        0.14 - 0.1925
Granted                                        4,250,000                    -                  -               0.1625
Forfeited                                    (2,650,000)          (1,031,068)                  -        0.14 - 0.1925
                                         ----------------     ----------------     --------------     ----------------
Outstanding at December 31, 2000               4,250,000            6,071,140                  -        0.14 - 0.1625

Granted                                        7,750,000                    -                  -                 0.05
Forfeited                                    (4,250,000)          (2,088,684)                  -        0.14 - 0.1625
                                         -----------------------------------------------------------------------------
Outstanding at December 31, 2001               7,750,000            3,982,456                  -          0.05 - 0.14
                                         =============================================================================
</TABLE>

<PAGE>

A summary of the status of Huntingdon's option plans, schemes and agreements for
the years ended  December 31, 2001,  December 31, 2000 and December 31, 1999 and
changes  during  the years then ended is  presented  in the table and  narrative
below:

<TABLE>
<CAPTION>

                                                                     Years ended
                                        December 31, 2001         December 31, 2000          December 31, 1999
                                       Shares     Wtd Avg.       Shares    Wtd Avg.         Shares     Wtd Avg.
                                        (000)      Ex Price       (000)     Ex Price        (000)      Ex Price
<S>                                  <C>               <C>    <C>         <C>            <C>          <C>
Outstanding at start of period            28,457        0.19       28,404 (pound)0.21         18,356  (pound)0.26
Granted                                    7,750        0.05        4,250 (pound)0.16         11,843  (pound)0.16
Exercised                                      -           -            -           -              -            -
Forfeited                                (8,323)        0.22            -           -              -            -
Expired                                        -           -            -           -              -            -
Cancelled                                      -           -      (4,197)        0.25        (1,795)  (pound)0.46
                                     ------------ -----------   ---------- -----------    ----------- ------------
Outstanding at end of period              27,884        0.13       28,457        0.19         28,404  (pound)0.21
                                     ------------ -----------   ---------- -----------    ----------- ------------
Exercisable at end of year                 2,151                    3,136                      2,420
Weighted average fair value of
options granted                      (pound)0.004             (pound)0.087               (pound)0.105

</TABLE>

The 27,883,806  options  outstanding at December 31, 2001 have an exercise price
between  (pound)0.05 and (pound)0.95,  with a weighted average exercise price of
(pound)0.13  and a weighted  average  remaining  contractual  life of 6.7 years.
2,151,350 of these options are  exercisable.  The 7,750,000  options  granted in
2001 have an exercise  price of  (pound)0.05  and a weighted  average  remaining
contractual life of 9.3 years.

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions  used for the  option  grants in 2001,  2000 and 1999  respectively:
risk-free  interest  rates of 3.72 per  cent,  4.70 per cent and 5.68 per  cent;
expected  dividend yields of 0.00 per cent (in all years);  expected life of 7.0
years for the  Unapproved  Scheme,  3.0 years for the  Sharesave  Scheme and 5.0
years for the  Incentive  Plan (in all years);  expected  volatility of 40.0 per
cent,  57.0 per cent and 57.4 per cent.  The Company  accounts for share options
under  APB 25,  under  which  no  compensation  cost has  been  recognised.  Had
compensation  cost for stock  options  awarded  under the plans been  determined
consistent  with SFAS 123 the  Company's net income and earnings per share would
have been restated as follows:

<TABLE>
<CAPTION>
                                                     Year ended             Year Ended        Year Ended December
                                                 December 31, 2001      December 31, 2000          31, 1999
                                               ----------------------- --------------------- ----------------------
<S>                         <C>                      <C>                    <C>                    <C>
Net loss:                    As Reported              (8,446)                (9,763)                (6,605)
                             Proforma                 (9,554)                (11,336)               (8,025)
Basic and Diluted EPS:       As Reported              $(0.03)                $(0.03)                $(0.02)
                             Proforma                 $(0.03)                $(0.04)                $(0.03)

</TABLE>

Loss Per share

The computation of loss per share is as follows:

                                           2001      2000        1999
Numerator
Net loss ($000)                          (8,446)    (9,763)     (6,605)
Denominator
Weighted average
  basic and diluted
  shares outstanding (000)               293,421    291,206     291,010
Basic and diluted loss per share $        (0.03)    (0.03)      (0.02)


Diluted  loss per share is equal to basic  loss per  share  for the years  ended
December 31,  2001,  2000 and 1999 as the  exercise of the  Convertible  Capital
Bonds and share  options are excluded from the  computation  of diluted loss per
share as the  effect  of  inclusion  is  anti-dilutive.  For the  year  ended 31
December,  the number of potentially dilutive shares that were excluded from the
computation of diluted loss per share as follows:

                                           2001          2000           1999
Convertible Capital Bonds (000s)          12,265        12,265         12,265
Share options (000s)                      27,754        28,964         22,696

10.  Pensions

The Company  operates the  Huntingdon  Life Sciences  Pension and Life Assurance
Scheme (the 'Scheme') a funded pension scheme providing benefits, based on final
pensionable  salary,  for Company employees in the UK. This Scheme was closed to
new entrants from April 5, 1997.

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
net pension  expense for these plans for the year ended  December  31, 2001 were
$1,275,000 (2000, $786,000; 1999, $682,000).

The  components  of the net  periodic  benefit  cost of the Scheme for the years
ended December 31, are as follows:
<TABLE>
<CAPTION>

                                                                      2001                2000                1999
                                                                      $000                $000                $000
<S>                                                                <C>                 <C>                 <C>
Service cost, benefits earned during the year                        1,493               1,548               3,473
Interest cost on projected benefit obligation                        5,720               5,823               5,942
Expected return on plan assets                                     (7,071)             (7,757)             (7,177)
Amortisation of prior service cost                                      44                  90                  97
Amortisation of transition asset                                     (230)               (237)               (254)
                                                               -------------       ------------       -------------
Net periodic (cost)/benefit                                            (44)              (533)               2,081
                                                               -------------       ------------       -------------
The major assumptions used in calculating
the pension expense were:
                                                                      2001                2000                 1999
Discount rate                                                        6.00%               6.00%                6.25%
Rate of increase of future compensation                              3.75%               3.75%                4.00%
Long-term rate of return on plan assets                              7.25%               7.25%                7.50%

</TABLE>

The net asset at transition,  prior service cost and net (loss)/gain  subject to
amortisation  are being  amortised on a  straight-line  basis over periods of 15
years, 10 years and 10 years respectively.

<PAGE>


A  reconciliation  of the  projected  benefit  obligation  for the Scheme to the
accrued pension expense recorded as of December 31 is as follows:
<TABLE>
<CAPTION>

                                                             2001           2000           1999
                                                             $000           $000           $000
<S>                                                     <C>            <C>           <C>
Projected benefit obligation                             (91,467)       (99,003)      (101,755)
Plan assets at market value                                86,492        100,083        110,740

Funded status                                             (4,975)          1,080          8,985
Unrecognised net actuarial loss/(gain)                      5,712        (1,733)       (11,857)
Unrecognised prior service cost                                 -             45            145
Unrecognised net asset at transition                        (574)          (826)        (1,146)
Accrued pension expense                                       163        (1,434)        (3,873)

Change in plan assets
Fair value of assets, beginning of year                   100,083        110,740         99,407
Foreign currency changes                                  (2,573)        (8,101)        (3,511)
Actual return on plan assets                             (10,571)        (2,571)         15,255
Employer contributions                                      1,517          1,622          1,507
Employee contributions                                        728            708            532
Benefit payments                                          (2,692)        (2,315)        (2,450)
Fair value of assets, end of year                          86,492        100,083        110,740

Change in projected benefits obligation

Projected benefit obligation, beginning of year            99,003        101,755         99,407
Foreign currency changes                                  (2,545)        (7,445)        (3,113)
Service cost                                                1,493          1,548          3,473
Interest cost                                               5,720          5,823          5,942
Actuarial (gains)/losses                                 (10,240)        (1,071)        (2,036)
Employee contributions                                        728            708            532
Benefit payments                                          (2,692)        (2,315)        (2,450)
Projected benefit obligation, end of year                  91,467         99,003        101,755

</TABLE>

11.  Geographical analysis

During each of the years ended  December  31, 2001,  2000 and 1999,  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.

<PAGE>

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


                                                           US                 UK              Total
                                                         $000               $000               $000
        <S>                                           <C>               <C>                <C>

         2001 Revenues                                 23,501             75,705             99,206
              Operating loss before other operating
              income/expense                            (109)              (784)              (893)
              Other operating expense                       -            (2,653)            (2,653)
              Operating loss                            (109)            (3,437)            (3,546)
              Identifiable assets (A)                  20,622            122,287            142,909
              Property and equipment, net              10,132             80,221             90,353
              Depreciation & amortisation               1,416              6,891              8,307
              Capital expenditure
                                                      (1,151)            (2,144)            (3,295)
              Total assets                             22,008            124,034            146,042

         2000 Revenues                                 22,929             73,035             95,964
              Operating profit/(loss) before
              other
              operating expense                         1,699            (1,615)                 84
              Other operating expense                       -            (1,819)            (1,819)
              Operating profit/(loss)                   1,699            (3,434)            (1,735)
              Identifiable assets (A)                  20,324            121,395            141.719
              Property and equipment, net              10,403             87,257             97,660
              Depreciation & amortisation               1,598              7,495              9,093
              Capital expenditure                     (1,752)            (1,896)            (3,648)
              Total assets                             21,950            124,157            146,107

         1999 Revenues                                 17,342             76,844             94,186
              Operating loss before other
              operating
              (expense)/ income                         (454)            (2,853)            (3,307)
              Other (expense)/income                    (300)              1,125                825
              Operating loss                            (754)            (1,728)            (2,482)
              Identifiable assets (A)                  25,924            123,330            149,254
              Property and equipment, net              10,251            100,903            111,154
              Depreciation & amortisation               1,567              8,108              9,675
              Capital expenditure                     (2,069)            (2,824)            (4,893)

              Total assets                             24,822            134,148            158,970

<FN>

(A)  Identifiable  assets  exclude cash and cash  equivalents,  investments  and
     unamortised costs of raising long term debt.
</FN>
</TABLE>


Revenues from customers (based on location of customers)
                                 2001               2000             1999
                                 $000               $000             $000
United States                  34,705             39,733           32,936
Europe                         39,082             32,919           40,770
Far East                       19,430             19,455           17,198
Rest of World                   5,989              3,857            3,282
                         -------------     --------------     ------------
                               99,206             95,964           94,186
                         -------------     --------------     ------------

12.      Other operating (expense)/income
<TABLE>
<CAPTION>

                                                    2001           2000          1999
                                                    $000           $000          $000
<S>                                              <C>            <C>           <C>
Asset write downs                                      -              -       (2,018)
Animal Rights legal and professional costs         (400)              -             -
Bankruptcy of Foreign Exchange Broker              (350)              -             -
Refinancing costs                                  (217)        (1,819)             -
Exchange offer costs                             (1,686)              -             -
Profit on sale of Wilmslow                             -              -         2,843
                                              -----------   ------------    ----------
                                                 (2,653)        (1,819)           825
                                              -----------   ------------    ----------
</TABLE>

In 2001, expenses totalling  $1,686,000 were incurred and expensed in connection
with the Exchange  Offer.  In addition there was a write off in connection  with
foreign  exchange  dealings  resulting from the bankruptcy of an exchange broker
($350,000),  special legal and other costs were incurred in connection  with the
Animal Rights campaign  ($400,000) and unamortised costs of $217,000 relating to
the refinanced bank loan was written off.

In 2000,  costs incurred in the refinancing of the Company's bank debt amounting
to  $1,819,000  were  written off.  Such costs were  incurred on elements of the
refinancing  which  did not  proceed,  or on  facility  extensions  prior to the
year-end.

In 1999, as a result of the Company's Year 2000  compliance  program a number of
assets that were not Year 2000 compliant were identified,  principally  computer
hardware and  software.  A charge of  $2,018,000  was made to write these assets
off. The Company also disposed of its Wilmslow  research site in 1999.  The site
was sold for $6,792,000 net of expenses,  a gain of $2,843,000  over its written
down value.

13.  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, 1999                                 185            (6)             97           (90)           186
December 31, 2000                                 186            (14)           108           (194)          86
December 31, 2001                                 86             (2)             80             -            164
</TABLE>

14.  Subsequent Events

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 for
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.  The  Company  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 ("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  will  be  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) will be
carried  forward to LSR (the legal  acquirer and the reporting  entity) at their
carrying value before the combination.  Although  Huntingdon is 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 will utilize the capital structure of LSR and the assets and
liabilities of Huntingdon will be recorded at historical cost.

The Company is the operating entity for financial  reporting  purposes,  and the
financial  statements  prior to the date of  consummation  of the Exchange Offer
represents  the  Company's  financial  position and results of  operations.  The
assets and liabilities and results of operations of the Company will be included
as of the date of consummation of the Exchange Offer.  Although  Huntingdon will
be deemed to be the acquiring corporation for financial accounting and reporting
purposes, the legal status of LSR as the surviving corporation will not change.

On January 10,  2002,  LSR issued  99,900  shares of Voting  Common  Stock to Mr
Stapfer,  a Director  of LSR,  and 900,000  shares of  Non-Voting  Common  Stock
(convertible into shares of LSR Voting Common Stock) to two other investors,  at
a purchase price of $1.50 per share (or an aggregate of $1,499,850).

On February 11, 2002,  `the bank loan amounting to $32,441,000  and the Stephens
Group loan facility amounting to $2,910,800  ((pound)2,000,000) were transferred
to a third  party.  The loan is  repayable  on July  19,  2002,  although  it is
subordinated  to the bank loan.  The loan is  secured  and  interest  is payable
monthly at a rate of 10% per annum.

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 per share 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  the 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.  The $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  $260,000  remains  payable to Mr Baker and  $250,000
remains payable to FHP.

 15.  Unaudited Quarterly Financial information

The following is a summary of unaudited quarterly financial  information for the
12 months ended December 31, 2000 and December 31, 1999.

<TABLE>
<CAPTION>
Year ended 31 December, 2001                                        Quarter Ended
                                              March 31            June 30       September 30        December 31
                                                  $000               $000               $000               $000

<S>                                           <C>                <C>                <C>                <C>
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 expenses            (4,006)            (4,178)            (3,786)            (3,996)
Other operating (expenses)/income                (174)                169                  -            (2,648)
                                      --------------------------------------------------------------------------
Operating (loss)/profit                        (2,406)              (451)                273              (962)
Interest income                                     39                 36                 13                 16
Interest expense                               (1,668)            (1,616)            (1,620)            (1,710)
Other (expense)/income                         (2,071)              (346)              1,837              (806)
                                      --------------------------------------------------------------------------
(Loss)/income before taxes                     (6,106)            (2,377)                503            (3,462)
Income tax benefit                               1,770                705                300                221
                                      --------------------------------------------------------------------------
Net (loss)/income                              (4,336)            (1,672)                803            (3,241)
                                      --------------------------------------------------------------------------
                                      --------------------------------------------------------------------------
(Loss)/earnings per share                      $(0.01)            $(0.01)                  -            $(0.01)

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                    Quarter Ended
Year ended 31 December, 2000                  March 31            June 30       September 30        December 31
                                                  $000               $000               $000               $000
<S>                                          <C>                 <C>                <C>                <C>
Revenues                                        24,826             24,458             23,768             22,912
Cost of sales                                 (20,456)           (20,201)           (19,562)           (20,521)
                                      --------------------------------------------------------------------------
Gross profit                                     4,370              4,257              4,206              2,391
Selling and administrative costs               (3,800)            (3,513)            (3,669)            (4,158)
Other operating loss                                 -                  -                  -            (1,819)
                                      --------------------------------------------------------------------------
Operating profit/(loss)                            570                744                537            (3,586)
Interest income                                     82                 51                 24                 24
Interest expense                               (1,740)            (1,716)            (1,807)            (2,122)
Other (expense)/income                           (444)            (2,620)            (1,115)                635
                                      --------------------------------------------------------------------------
Loss before taxes                              (1,532)            (3,541)            (2,361)            (5,049)
Income tax benefit/(expense)                       218                275              (233)              2,460
                                      --------------------------------------------------------------------------
Net loss                                       (1,314)            (3,266)            (2,594)            (2,589)
                                      --------------------------------------------------------------------------

Loss per share                                       -            $(0.01)            $(0.01)            $(0.01)

</TABLE>



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

None


<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, all of whom were  appointed on January
10, 2002 when the Offer became unconditional.

Name                  Age      Office Held

Andrew Baker          53       Director
                               Chairman of the Board and Chief Executive Officer
Brian Cass            54       Director, Managing Director/President
Gabor Balthazar       60       Director
Frank Bonner          49       Director
                               Director of Science and Technology
John Caldwell         55       Director
Kirby Cramer          64       Director
Julian Griffiths      49       Director, Finance Director of Huntingdon Life
                               Sciences Group plc
Richard Michaelson    50       Chief Financial Officer & Secretary

(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,  Andrew  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 which acts as general partner for
healthcare startup and development companies.

Brian Cass, FCMA,  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  Centre  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.

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 Gabor 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. Mr Balthazar also serves
as a director of Decora  Industries,  Inc. He is a graduate of the  Columbia Law
School in New York City.

Frank Bonner,  BSc., PhD.,  became a director of LSR on January 10, 2002. He was
appointed  to the Board of  Huntingdon  as Director of Science &  Technology  in
September  1998. He studied  Biochemistry  and  Toxicology at the  University of
Surrey, Guildford (1973-1979).  After post-doctoral research in the Institute of
Industrial and Environmental  Health, he joined Sterling Winthrop to establish a
Drug Safety department.  Following the acquisition of Sterling by Sanofi, he was
appointed  Scientific and  Administrative  Director of the UK Research Centre in
Northumberland,  a position he held until joining Huntingdon in 1997. He is past
Chairman  of the  British  Toxicology  Society  and serves on the  Research  and
Development Committee of the Association of the British Pharmaceutical Industry.

John Caldwell,  B.Pharm., PhD., D.Sc., C.Biol.,  F.I.Biol., became a director of
LSR on January 10,  2002.  He was  appointed  to the Board of  Huntingdon  as an
Independent  Non-Executive  Director  in  December  1997.  He  is  Professor  of
Biochemical  Toxicology  and Head of the Division of Biomedical  Sciences of the
Imperial  College  School  of  Medicine.   His  distinguished   career  includes
membership of the UK Committee on Safety of Medicines,  Ministry of  Agriculture
Fisheries and Food Steering Group for Food Surveillance, permanent membership of
the International  Scientific Committee of the International  Symposia on Chiral
Discrimination,   Honorary  Membership  of  the  Royal  College  of  Physicians,
Representative  on the  Court  of the  University  of  Surrey  for  the  British
Pharmacological  Society and he is a Past President of the International Society
for the Study of Xenobiotics. He is also a member of the Institute of Directors.
Professor Caldwell has extensive involvement as a consultant with pharmaceutical
companies in Europe, North America and Japan.

Kirby L Cramer became a director of LSR on January 10, 2002. He was appointed to
the Board of Huntingdon as an Executive Director in September 1999. He served as
Chief Executive Officer of Hazleton  Laboratories  Corporation from 1968 and led
it to become the world's largest provider of pre-clinical  testing services when
it was sold to  Corning  Inc in 1987.  Following  the  acquisition  he served as
Chairman of the Board of  Directors  of Hazleton  from 1987  through  1991.  The
Hazleton  laboratories now form the pre-clinical  segment of Covance.  Mr Cramer
also currently serves as a director of D J Orthopedics,  Immunex Corp., SonoSite
Inc., Array BioPharma, Commerce Bancorporation, Landec Corporation, Northwestern
Trust  Company  and Corus  Pharma.  Previously  Mr Cramer was a director  of ATL
Ultrasound Inc., Unilab  Corporation,  Pharmaceutical  Product Development Inc.,
and Kirschner Medical.

Julian Griffiths, M.A., F.C.A., became a director of LSR on January 10, 2002. He
was appointed to the Board of  Huntingdon as Finance  Director in April 1999 and
Secretary in February  2000.  Prior to joining  Huntingdon  he was most recently
Vice President of Analytical Services in the European  pre-clinical  division of
Covance Inc.,  having spent the previous nine years as Vice President of Finance
in the same organisation. Prior to that he held various positions with KPMG.

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.

The Articles of Amendment and  Restatement of the 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, 2001 the  aggregate  compensation  of the
Executive Directors as a group, paid or accrued, was $1,271,312.

The services of Mr Baker are provided  through a management  services  agreement
with Focused  Healthcare  Partners  ("FHP"),  the vehicle through which Mr Baker
provides  his  services.   The  agreement  provides  for  a  minimum  notice  of
termination by LSR of twelve months.

Mr Cass has a service contract  providing for a minimum notice of termination by
LSR of two years. The contract provides for liquidated  damages amounting to two
years' basic salary and an amount equal to twice the annual  average of bonuses,
if any,  received during the two financial years of LSR immediately  preceding a
change of control of LSR (as defined in the service contract) or in the event of
termination in certain  circumstances.  The Board has  determined  that both the
period of notice required for termination of Mr Cass' contract and the change of
control provisions are warranted by Mr Cass' value to LSR.

Dr Bonner, Mr Michaelson, Mr Cramer and Mr Griffiths each have service contracts
providing for a minimum notice of termination by LSR of twelve months.

Professor Caldwell, and Mr Balthazar each have service contracts providing for a
minimum notice of termination by LSR of three months.

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.   Bonus  awards  are  administered  by  the  Compensation
Committee.  The Committee  believes that the discretionary  bonus payments to Mr
Baker,  Mr Cass,  Dr Bonner and Mr Griffiths in 1999  reflect  their  respective
contribution  to the  development  of  Huntingdon . No bonus awards were made in
respect of 2000 or 2001.

The  following  table shows the  remuneration  of Executive  Directors in the 12
Months ended December 31, 2001, December 31, 2000, and December 31, 1999;
<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                 2001       288,006           -              95,990                      -
Chairman                     2000       288,000           -              95,040                      -
                             1999       216,000        72,000            71,280                      -

Dr F W Bonner                2001       211,680           -              20,395                   10,000
Director of Science &        2000       211,680           -              19,367                    7,500
Technology                   1999       201,600        14,400            26,450                    5,000

Mr B Cass                    2001       280,741           -              153,311                     -
Managing Director            2000       288,800           -              153,936                     -
                             1999       216,000        72,000            130,992                    463

Mr K L Cramer                2001        60,000           -                 -                        -
Director                     2000        60,000           -                 -                        -
                             1999        60,000           -                 -                     20,000

Mr J T Griffiths             2001       120,960           -              40,229                   10,000
Financial Director           2000       120,960           -              44,070                    7,500
Company Secretary            1999       113,435        14,400            53,562                   15,000

</TABLE>


All Directors, except Mr Cramer are paid in UK pounds sterling. The amounts have
been converted at the rate of $1.44 to (pound)1.00 for the purposes of the above
table.

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

OPTIONS TO PURCHASE SECURITIES FROM THE HUNTINGDON AND LSR

Under the  following  Plans options were granted to acquire  Ordinary  Shares of
Huntingdon. The ability to exercise options lapsed on March 26, 2002, except for
those granted under the Unapproved Share Option Plan.

The  Unapproved  Share Option  Plan.  On April 8, 1983,  Huntingdon  adopted the
Unapproved Share Option Plan (the  "Unapproved  Plan") pursuant to which options
to acquire  Ordinary  Shares may be  granted  to any person who is  required  to
devote  substantially  the whole of his time  (being  not less than 25 hours per
week)  to  serve  as a  Director  or  employee  of  Huntingdon  or  one  of  its
subsidiaries.  The maximum  number of Ordinary  Shares which may be issued under
the  Unapproved  Plan  according to the rules thereof is 10% of the issued share
capital of  Huntingdon  from time to time,  less options  outstanding  under the
Approved Plan from time to time.

An option  granted  pursuant to the  Unapproved  Plan may be exercised two years
after the grant in respect of not more than 50% of the Ordinary  Shares  subject
to the option.  An option may be exercised in full between three and seven years
after the grant in respect of the  unexercised  balance of the  Ordinary  Shares
subject to the option.

The  Approved  Management  Share Option  Plan.  On January 29, 1985,  Huntingdon
adopted a second share option plan,  the Approved  Management  Share Option Plan
(the  "Approved  Plan"),  which has been approved by the Board of Inland Revenue
(the  "Inland  Revenue")  pursuant  to the  Finance  Act 1984.  The rules of the
Approved Plan broadly follow those of the Unapproved Plan, except that an option
may be  exercised,  subject to certain  exceptions,  only between  three and ten
years after it is granted.

Pursuant to the Approved Plan, options to acquire Ordinary Shares may be granted
to any Director or employee of Huntingdon whose terms of employment  require him
to work for at least  thirty-seven and one-half hours per week.  Approval of the
Approved  Plan  by  the  Inland  Revenue  means  that  important   personal  tax
concessions  are  available  to  participants  who reside in the UK. The maximum
number of Ordinary  Shares which may be issued under the Approved Plan according
to the rules thereof is 10% of the issued share capital from time to time,  less
options outstanding under the Unapproved Plan from time to time.

Both the Unapproved  Plan and the Approved Plan  terminated on December 31, 1997
with respect to the grant of new options.  Options  outstanding at that date are
not affected by such termination. The grant of options under both the Unapproved
Plan and the  Approved  Plan was a matter  for the  discretion  of the  Board of
Directors of Huntingdon.  The exercise price per share at which an option may be
exercised  is  equal to the  average  of the  middle  market  quotations  on the
International  Stock Exchange of the United Kingdom and Republic of Ireland Ltd.
for the Ordinary  Shares on the five dealing days prior to the date of grant or,
if no established  market in the Ordinary  Shares  exists,  the fair value of an
Ordinary  Share as  determined  by the  Board.  Generally,  an option may not be
exercised  unless at the date of exercise the  participant is then, and has been
continuously  since  the  grant  of the  option,  in  the  full-time  employ  of
Huntingdon.  This rule,  however,  is subject to alteration in specific cases at
the discretion of the Board.

At the Extraordinary  General Meeting held on September 2, 1998 the Shareholders
approved a new  option  scheme  (the  rules of which were  amended at the Annual
General  Meeting held on June 3, 1999) and a separate  Option  Agreement with Mr
Baker:

(a)  The  Huntingdon  Life Sciences  Group  Unapproved  Share Option Scheme (the
     "Unapproved Share Option Scheme").

(i)  7,500,000  Founder  Options  had  been  granted  but  not  relinquished  or
     exercised  as at  December  31,  2001 at an option  price of 12.5 pence per
     Ordinary Share. The Options may be exercised from the third  anniversary of
     the date of the grant  subject to the share price  reaching  the  following
     pre-determined  targets for a period of seven  consecutive  dealing days at
     any time after January 1, 1999.

          Target Price Per Share     Proportion of Options
                                           Exercisable
                25p                           25%
                50p                           50%
                75p                           75%
               100p                          100%

(ii) 1,500,000  options,   other  than  Founder  Options,  which  are  generally
     exercisable  between the third and tenth  anniversary  of the date of grant
     subject to the attainment of performance related conditions were granted on
     March 29, 1999 at a  subscription  price of 19.25  pence each and  remained
     outstanding on December 31, 2001.

(b)  An Option Agreement

     Mr Baker, a related  party,  was granted  Options over  5,000,000  Ordinary
     Shares of 5 pence in the Company, the principal terms of which are the same
     as those applicable to the Founder Options referred to above.

The Huntingdon Life Sciences Group Incentive Option Plan (the "Incentive  Option
Plan") The  Incentive  Option  Plan was  adopted  on June 3, 1999.  The Plan was
introduced to run alongside the Unapproved  Share Option Scheme  described above
and is designed to reward short term improvement in financial performance in the
Company's  turn around phase.  Options are available for grant to management and
senior staff, and may be subject to the achievement of a performance measure and
personal performance conditions;  they may generally be exercised from the third
anniversary of the date of grant and they lapse on the tenth anniversary.

The  Huntingdon  Life Sciences  Sharesave  Scheme (the  "Sharesave  Scheme") The
Sharesave Scheme was adopted at the Annual General Meeting held on June 3, 1999.
Approximately  55% of eligible  employees,  who will fund the  exercise of their
options with the proceeds of a related Save As You Earn (SAYE) savings contract,
accepted the  invitation to join the Scheme.  Options may generally be exercised
from the Bonus Date which falls on November 1, 2002. Options generally lapse six
months after the Bonus Date.

Any US  subsidiary  of the  Company,  which  received the services in respect of
which an option was granted,  will be entitled to a deduction in an amount equal
to the compensation taxable to the optionee,  in computing its US Federal income
tax.  Generally  this is in the calendar year in which the optionee is deemed to
have received such compensation.

Under the terms of the various share option  arrangements the following  options
to purchase  Ordinary Shares in the Company have been granted and vested (net of
expired options), but not exercised as of March 20, 2002.

(i)      The Unapproved Share Option Plan

Date of Grant          Number of shares   Option Price      Expiry Date
                        outstanding

December 18, 1995       112,500            (pound)0.77      December 17, 2002
November 21, 1996       50,000                   $1.60      November 20, 2003
December 1, 1997        100,000            (pound)0.50      November 30, 2004
December 31, 1997       164,900            (pound)0.465     December 30, 2004
December 31, 1997       240,000                  $0.77      December 30, 2004

(ii)     The Approved Management Share Option Plan

Date of Grant         Number of Shares    Option Price     Expiry Date
                       Outstanding

February 13, 1995       105,000           (pound)0.49      February 12, 2005
December 11, 1995       370,000           (pound)0.78      December 10, 2005
December 11, 1995       80,000                  $1.19      December 10, 2005
December 18, 1995       35,750            (pound)0.77      December 17, 2005
November 21, 1996       357,500           (pound)0.95      November 20, 2006
December 31, 1997       360,000           (pound)0.465     December 30, 2007


(iii)    The Unapproved Share Option Scheme and Mr Baker's Option Agreement

Date of Grant          Number of Shares     Option Price    Expiry Date
                        Outstanding

September 2, 1998       5,000,000          (pound)0.125     September 1, 2008
December 3, 1998        7,000,000          (pound)0.125     December 2, 2008
December 31, 1998       500,000            (pound)0.125     December 30, 2008
March 29, 1999          1,500,000          (pound)0.1925    March 28, 2009

(iv)     Incentive Option Plan

Date of Grant          Number of Shares     Option price    Expiry Date
                        Outstanding

April 27, 2001          7,750,000           (pound)0.05     April 27 2011


(v)      Sharesave Scheme

Date of Grant           Number of Shares     Option price    Expiry Date
                          Outstanding

September 9, 1999        3,341,168           (pound)0.14     May 1, 2003

In the  period  since  options  to  acquire  shares  have been  capable of being
exercised to March 20, 2002 options for 3,798,856 shares have been exercised and
the shares issued.  The total number of Huntingdon options held by Directors and
Officers as a group as at March 20, 2002 is 13,123,142.

The  following  table shows the number of share  options held by Directors as at
March 20, 2002.
<TABLE>
<CAPTION>
Date of Grant            Number Granted     Exercise Price      Date First Exercisable    Expiry Date
<S>                       <C>              <C>                    <C>                     <C>
A H Baker
September 2, 1998         5,000,000        (pound)0.125           September 2, 2001       September 1, 2008

F W Bonner
December 1, 1997          100,000          (pound)0.50            December 1, 1999        November 30, 2004
December 31, 1998         500,000          (pound)0.125           December 31, 2001       December 30, 2008
April 27, 2001            500,000          (pound)0.05            April 27, 2004          April 27, 2011

B Cass
December 3, 1998          5,000,000        (pound)0.125           December 3, 2001        December 2, 2008
September 9, 1999         23,142           (pound)0.14            November 21, 2002       April 30, 2003

K Cramer
March 29, 1999            1,000,000        (pound)0.1925          March 29, 2002          March 28, 2009

J T Griffiths
March 29, 1999            500,000          (pound)0.1925          March 29, 2002          March 28, 2009
April 27, 2001            500,000          (pound)0.05            April 27, 2004          April 27, 2011
</TABLE>


Under the following  plan options may be granted to acquire  Voting Common Stock
in LSR.

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.

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 favourable 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.

<PAGE>

ITEM 12. SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT AS AT
APRIL 8, 2002.

The  following  table  sets  forth,  as of April 8,  2002,  certain  information
regarding the beneficial  ownership of the shares of LSR Voting Common Stock, by
(a) each person or entity who is known by LSR to own  beneficially 5% or more of
its outstanding  shares of Voting Common Stock (none other than Messrs Baker and
Cramer  who are both  Directors  and/or  Executive  Officers  of LSR);  (b) each
Director  or  Executive  Officer of LSR;  and (c) all  Directors  and  Executive
Officers as a group.

Name                              No. of Shares           Percent of Outstanding
                                                                   Shares
Mr A Baker                          2,699,175   (1)                  24.4%
Mr G Balthazar                         10,000   (2)                    *
Dr F W Bonner                          17,855   (3)                    *
Mr B Cass                             520,000   (4)                   4.7%
Prof. J Caldwell                       10,000   (5)                    *
Mr K Cramer                           903,007   (6)                   8.1%
Mr J Griffiths                         80,000   (7)                    *
Mr R Michaelson                       216,000   (8)                   1.9%
                                                                      ----
                                --------------
All Executive Officers and
Directors as a group                4,456,037                         39.2%

*    Signifies  less  than  1%.  All  percentages  calculated  on the  basis  of
     11,032,578 outstanding shares of Voting Common Stock.

(1) Includes presently exercisable options to purchase 100,000 shares
(2) Includes presently exercisable options to purchase 10,000 shares
(3) Includes presently exercisable options to purchase 17,500 shares
(4) Includes presently exercisable options to purchase 100,000 shares
(5) Includes presently exercisable options to purchase 10,000 shares
(6) Includes presently exercisable options to purchase 20,000 shares
(7) Includes presently exercisable options to purchase 30,000 shares
(8) Includes presently exercisable options to purchase 45,000 shares

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 28, 2002.

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  $260,000 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,  and the other two banks who 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 19 July 2001 and
     as amended on 5 October  2001,  the  Stephens  Group Inc.  made  $2,910,800
     ((pound)2,000,000) available to the Company which is available for a period
     of one year from 19 July 2001.  That loan was  transferred to another party
     effective February 11, 2002. This amount, which is secured and subordinated
     to the bank debt, has been drawn down in full.  Interest is payable monthly
     at a rate of 10% per annum.

(4)  In October  2001 the  Company  issued  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.

     In  addition  the  Board  intends  to ask  LSR  shareholders  at  the  next
     shareholders  meeting to approve the issuance 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.

<PAGE>


PART IV
<TABLE>
<CAPTION>
ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a)      List of documents filed as part of this report
         ----------------------------------------------
<S>      <C>                                                                          <C>

(1)      Index to Financial Statements                                                 Page
                                                                                       ----
         Life Sciences Research, Inc.

         Report of Deloitte & Touche - Report of Independent Auditors                   27

         Balance Sheet - December 31, 2001                                              28

         Statement of Operations -  Period from July 19, 2001
         (date of inception) to December 31, 2001                                       29

         Statement of Shareholder's Deficit - Period from July 19, 2001
         (date of inception) to December 31, 2001                                       30

         Statement of Cash Flows - Period from July 19, 2001
         (date of inception) to December 31, 2001                                       31

         Notes to Financial Statements                                                  32

         Huntingdon Life Sciences Group plc

         Report of Deloitte & Touche - Report of Independent Auditors                   35

         Consolidated Balance Sheets - December 31, 2001 and 2000                       36

         Consolidated Statements of Operations and Comprehensive Loss -
         Years ended December 31, 2001, 2000 and 1999                                   37

         Consolidated Statements of Changes in Shareholders' (Deficit)/Equity -
         Years ended December 31, 2001, 2000 and 1999                                   38

         Consolidated Statements of Cash Flows - Years ended December 31, 2001,
         2000 and 1999                                                                  39

         Notes to Consolidated Financial Statements                                     40


(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.

</TABLE>

<PAGE>


(b)      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       Deposit Agreement dated June 21, 1983, amended and restated as of June
          6,  1996,  as of May 8,  2000  and as of July  10,  2000  between  HLS
          (formerly Huntingdon  International  Holdings plc) and The Bank of New
          York and  Holders of American  Depositary  Receipts.  INCORPORATED  BY
          REFERENCE  TO  HLS'  POST-EFFECTIVE  AMENDMENT  NO.1  TO  REGISTRATION
          STATEMENT ON FORM F-6, REGISTRATION NUMBER 333-11922.

4.2       Specimen  Certificate for American Depositary Shares.  INCORPORATED BY
          REFERENCE  TO  HLS'  POST-EFFECTIVE  AMENDMENT  NO.1  TO  REGISTRATION
          STATEMENT ON FORM F-6, REGISTRATION NUMBER 333-11922.

4.3       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.

4.4       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.

4.5       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.

4.6       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.

4.7       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      A bridging facility being made available by National  Westminster Bank
          PLC  in  favour  of  HLS  and   Huntingdon   Life  Sciences   Limited.
          INCORPORATED  BY REFERENCE TO HLS' ANNUAL  REPORT ON FORM 20-F FOR THE
          FISCAL YEAR ENDED DECEMBER 31, 1998.

10.4      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.

10.5      A letter of appointment dated August 7, 1998 between HLS and Professor
          J Caldwell.  INCORPORATED  BY REFERENCE TO HLS' ANNUAL  REPORT ON FORM
          20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.

10.6      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.

10.7      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.

10.8      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.

10.9      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.

10.10     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.

10.11     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.  10.12
          Service  Agreement  dated  September  17,  1999  between  HLS and Mr K
          Cramer.  INCORPORATED  BY REFERENCE TO HLS' ANNUAL REPORT ON FORM 10-K
          FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000.

10.13     A 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.

10.14     Option  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.

10.15     Rules 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.

10.16     Rules 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.

10.17     Rules of the Huntingdon Life Sciences  Sharesave  Scheme  INCORPORATED
          BY  REFERENCE  TO  HLS'ANNUAL  REPORT ON FORM 10-K FOR THE FISCAL YEAR
          ENDED DECEMBER 31, 1999.

10.18     The Rules of The HIH Share Option Plan.  INCORPORATED  BY REFERENCE TO
          HLS' ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
          1999.

10.19     The  Rules  of  The  HIH  Approved   Management   Share  Option  Plan.
          INCORPORATED  BY REFERENCE TO HLS' ANNUAL  REPORT ON FORM 10-K FOR THE
          FISCAL YEAR ENDED DECEMBER 31, 1999.

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

10.21     Loan  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.

10.22     Amendment  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.

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

10.24     Amendment  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.

10.25     Fifth 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.

10.26     Subscription  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.

10.27     Subscription  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.

10.28     Warrant,   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.

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

10.30     Inducement  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.

21.1      Subsidiaries FILED HEREWITH

99.1      Press  Release,  dated March 28, 2002,  announcing  fourth quarter and
          full year 2001  results.  INCORPORATED  BY REFERENCE  TO  REGISTRANT'S
          CURRENT REPORT ON FORM 8-K, DATED MARCH 28, 2002.


Reports on Form 8-K

None



                                    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/ Brian Cass

Name:    Brian Cass

Title:   Managing Director/President

Date:    April 12, 2002