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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 - Q

For the quarterly period ended December 31, 2004

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  ¨    No  x

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

As of January 31, 2005, 9,914,448 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 unaudited financial statements

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SeraCare Life Sciences, Inc.

Statements of Income

(unaudited)

(in thousands, except per share data)

See accompanying notes to unaudited financial statements

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SeraCare Life Sciences, Inc.

Statements of Cash Flows

(unaudited)

(in thousands)

Supplemental disclosure of non-cash investing and financing activities:

Capital lease obligations of $352 were incurred during the quarter ended December 31, 2004 when the Company entered into leases for new equipment.

Purchases of property and equipment are net of $412 recorded in accounts payable at December 31, 2004.

See accompanying notes to unaudited 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, 2004 and for the three months ended December 31, 2004 and 2003 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, 2004 and the results of its operations and cash flows for the three months ended December 31, 2004 and 2003. 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, 2004 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, 2004 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, 2004.

The Company has completed the evaluation and allocation of the purchase price for the BBI acquisition which resulted in the allocation of $420,000 from Goodwill to Other Intangible Assets. The Company has recorded the amortization of Other Intangible Assets in the first quarter, including an immaterial amount relating to the period prior to September 30, 2004. During the first quarter, $412,000 was received relating to trade receivables which were guaranteed and ultimately assumed by the seller.

Research and development costs are expensed during the period in which they are incurred.

Certain amounts in prior period financial statements such as interest expense have been reclassified to conform to current period classifications.

2. Stock-Based Compensation

The Company’s stock-based employee and director incentive compensation plan is accounted for under the recognition and measurement principles of Accounting Principles Board (“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 Statement of Financial Accounting Standard (“SFAS”) No. 123 “Accounting for Stock-Based Compensation” 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, 2004 and 2003, respectively:

On November 16, 2004, the Company issued to members of the board of directors options to purchase 120,000 shares at the fair value of such shares on such date. On December 16, 2004, in conjunction with the hiring of Mr. Tom Lawlor as Worldwide Chief Operating Officer, the Company issued Mr. Lawlor an option to purchase 160,000 shares of the Company’s common stock at the fair value of the shares on such date. Mr. Lawlor’s options were issued outside of the 2001 Employee Stock Option Plan with board approval.

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, 2004, management determined that it is more likely than not that the deferred tax assets will be realized in future periods. A deferred tax asset of $235,000 for California net operating loss carry-forwards was recorded as of December 31, 2004. The California NOL deferred tax asset is expected to begin to be utilized in 2005, a delay resulting from a two-year state imposed moratorium on the use of these NOLs.

The Federal net operating loss carry-forward was used during fiscal 2004 and therefore, in accordance with SFAS No. 109, the effective tax rate for 2004 assumed the use of all the federal net operating losses during fiscal 2004. For the three months ended December 31, 2004, the Company accrued income tax at the rate of 38.0%. For the three months ended December 31, 2003, the Company accrued an income tax benefit of 35.5%. At December 31, 2004, the Company had no federal net operating loss carry-forwards and California state net operating loss carry-forwards of $4,000,000.