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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 - Q

For the quarterly period ended December 31, 2003

For the transition period from                      to                     

Commission file number 0-33045

SERACARE LIFE SCIENCES, INC.

(Exact name of Registrant as specified in its charter)

Registrant’s Telephone Number: (760) 806-8922

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 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 reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

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

Yes ¨ No x

As of January 31, 2004, 7,814,433 shares of the Registrant’s common stock, no par value, were outstanding.

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SeraCare Life Sciences, Inc.

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SeraCare Life Sciences, Inc.

Balance Sheets

(unaudited)

(in thousands, except for share data)

See accompanying notes to financial statements

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SeraCare Life Sciences, Inc.

Statements of Income

(unaudited)

(in thousands, except per share data)

See accompanying notes to financial statements

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SeraCare Life Sciences, Inc.

Statements of Cash Flows

(unaudited)

(in thousands)

See accompanying notes to financial statements

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SeraCare Life Sciences, Inc.

Notes to Financial Statements

Unaudited

1.     Basis of Presentation

The information contained herein has been prepared in accordance with instructions for Form 10-Q and Rule 10-01 of Regulation S-X. The information as of December 31, 2003 and for the three months ended December 31, 2003 and 2002 is unaudited. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal and recurring accruals) necessary to present fairly the financial position of SeraCare Life Sciences, Inc. (the “Company” or “we”) as of December 31, 2003 and the results of its operations and cash flows for the three months ended December 31, 2003 and 2002. These results have been determined on the basis of accounting principles generally accepted in the United States of America and applied consistently with those used in the preparation of the audited financial statements for the fiscal year ended September 30, 2003 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The results of operations for the three months ended December 31, 2003 are not necessarily indicative of the results to be expected for any other period or for the entire current fiscal year.

Certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with the applicable rules to Form 10-Q. The accompanying financial statements should be read in conjunction with our audited financial statements and notes thereto for the fiscal year ended September 30, 2003.

Certain amounts in prior period financial statements have been reclassified to conform to current period classifications.

2.     Stock-Based Compensation

At December 31, 2003, the Company’s stock-based employee and director incentive compensation plan is accounted for under the recognition and measurement principles of APB No. 25, “Accounting for Stock Issued to Employees” and related interpretations. The following table illustrates the effect on net income and earnings per share if the Company had applied the “fair value” recognition provisions of SFAS No. 123 to stock-based employee and director compensation.

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The fair value of the stock options were estimated at the date of grant using the “Black-Scholes” method for option pricing and the following weighted average assumptions were used for grants made during the three months ended, December 31, 2003 and 2002, respectively:

3.     Earnings Per Share

Basic net income per common share is computed based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed based on the weighted average number of common shares outstanding during the period increased by the effect of dilutive stock options and warrants, using the treasury stock method. The computations for basic and diluted earnings per share are as follows:

4.     Income Taxes

The realization of deferred tax assets is dependent upon the Company’s ability to generate taxable income in future periods. As of December 31, 2003, management determined that it is more likely than not that the net operating loss carryforward (“NOL”) related to the deferred tax assets will be realized in future periods. As set forth in SFAS No. 109, “Accounting for Income Taxes,” a deferred tax asset of $298,000 for California net operating loss carryforwards was recorded as of December 31, 2003. The California NOL deferred tax asset is not expected to be utilized until 2005 due to a two-year state imposed moratorium on the use of these NOLs.

The Federal net operating loss carryforward is expected to be used during fiscal 2004 and therefore, in accordance with SFAS No. 109, the effective tax rate for 2004 assumes the use of all the federal net operating losses during fiscal 2004. For the three months ended December 31, 2003, the Company accrued income tax at the rate of 21.4%. At September 30, 2003, the Company had federal and California state net operating loss carryforwards of $1.7 million and $3.6 million, respectively.

5.     Commitments and Contingencies

Litigation

There are no material pending legal proceedings to which we are a party, other than routine litigation occurring in the normal course of our operations.

Line of Credit

During October 2003, the Company entered into a two-year, $10.0 million secured line of credit. The line of credit is secured by the Company’s assets. There was a 1.25% origination fee on the total commitment amount which was paid at the time of closing. The Company can select an annual interest rate of prime plus 0.50% or LIBOR plus 3.50% on amounts borrowed on the line of credit. As of December 31, 2003, the interest rate was 4.5%. Interest payments on funded amounts are due quarterly and any unpaid principal and interest is payable October 2005. An annual interest rate of 0.50% is charged on unfunded amounts and

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payable quarterly. The line of credit also requires that certain financial covenants be maintained by the Company. There are financial covenants that limit the Company’s level of debt and capital expenditures and covenants that require minimum levels of liquidity and profitability. The Company is in compliance with all covenants as of December 31, 2003. During December 2003, the Company borrowed $500,000 against the line of credit. As of December 31, 2003, the outstanding balance totaled $500,000 and $9.5 million was available for future borrowings.

Guarantees

The Company indemnifies directors and officers for third-party claims alleging certain breaches of their fiduciary duties as directors or officers. Certain costs incurred for providing such indemnification may be recovered under various insurance policies. The Company has not incurred obligations under these indemnification arrangements historically and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential director or officer indemnification obligations. The maximum potential amount of future payments that the Company could be required to make under the indemnification arrangements relating to officers and directors is unlimited.

6.    Segment Information and Significant Customers

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” requires the reporting of information about operating segments in annual financial statements and requires selected information in interim financial reports. Selected financial information for the three months ended December 31, 2003 and 2002 is as follows: