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________________________________________________________________________________


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549




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FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934




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(Mark One)



| |     |                                                                                        
| | --- | ---------------------------------------------------------------------------------------
| | [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: 001-15941

UTEK CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER)


|                                                                              |  |                                   
|----------------------------------------------------------------------------- |  | ----------------------------------
|DELAWARE                                                                      |  | 59-3603677                        
|(STATE OR JURISDICTION OF
	INCORPORATION OR ORGANIZATION)                     |  | (IRS EMPLOYER
	IDENTIFICATION NO.)
|                                                                             
|202 S. WHEELER STREET, PLANT CITY, FL(ADDRESS OF PRINCIPAL EXECUTIVE
	OFFICE) |  | 33566(ZIP CODE)                   

REGISTRANTS TELEPHONE NUMBER, INCLUDING
AREA CODE:  (813) 754-4330

SECURITIES REGISTERED PURSUANT TO SECTION 12(B)
OF THE ACT:

|                             |  |                                           
|---------------------------- |  | ------------------------------------------
|TITLE OF EACH
	CLASS         |  | NAME OF EACH EXCHANGE ON
	WHICH REGISTERED
|                             |  |                                           
|COMMON STOCK, $.01 PAR VALUE |  | AMERICAN STOCK EXCHANGE                   

SECURITIES REGISTERED PURSUANT TO SECTION 12(G)
OF THE ACT:

NONE

Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by
Section 12 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter periods
as 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 o

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 registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to
this
Form 10-K.  o

The aggregate market value of the
registrants common stock held by non-affiliates of the
registrant as of March 14, 2002 was approximately
$12,936,553 based upon the last sale price for the
registrants common stock on that date. As of
March 14, 2002 there were 3,915,672 shares of the
registrants common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrants definitive
proxy statement for the Annual Meeting of Shareholders are
incorporated by reference into Part III of this report.



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TABLE OF CONTENTS



|                                                   |                                                                                               |  |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                            
|                                                   | Item 1. Business                                                                             
|                                                   | Item 2. Properties                                                                           
|                                                   | Item 3. Legal Proceedings                                                                    
|                                                   | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                           
|                                                   | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                                                   | Item 6. Selected Financial Data                                                              
|                                                   | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                   | Item 7A. Quantitative and Qualitative Disclosure About Market Risk                           
|                                                   | Item 8. Financial Statements and Supplementary Data                                          
|                                                   | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
|PART III                                          
|                                                   | Item 10. Directors and Executive Officers of the Registrant                                  
|                                                   | Item 11. Executive Compensation                                                              
|                                                   | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                   | Item 13. Certain Relationships and Related Transactions                                      
|PART IV                                           
|                                                   | Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|SIGNATURES                                        
|EXHIBIT INDEX                                     
|Certificate of Amendment to Certificate of Incorp.
|Bank of Tampa September 10, 2001 Line of Credit   

TABLE OF CONTENTS

|              |  |                                                                                        |    |  |    | 
|------------- |  | -------------------------------------------------------------------------------------- | -- |  | -- | 
|PART I        |  |                                                                                        |    |  |    | 
|ITEM 1.       |  | BUSINESS                                                                               |    |  | 1  | 
|ITEM 2.       |  | PROPERTIES                                                                             |    |  | 24 | 
|ITEM 3.       |  | LEGAL PROCEEDINGS                                                                      |    |  | 24 | 
|ITEM 4.       |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
	HOLDERS                                   |    |  | 24 | 
|             
|PART II       |  |                                                                                        |    |  |    | 
|ITEM 5.       |  | MARKET FOR REGISTRANTS COMMON EQUITY AND
	RELATED STOCKHOLDER MATTERS                 |    |  | 24 | 
|ITEM 6.       |  | SELECTED FINANCIAL DATA                                                                |    |  | 25 | 
|ITEM 7.       |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF
	FINANCIAL CONDITION AND RESULTS OF OPERATIONS |    |  | 25 | 
|ITEM 7A.      |  | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
	MARKET RISK                             |    |  | 33 | 
|ITEM 8.       |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                            |    |  | 34 | 
|ITEM 9.       |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
	ACCOUNTING AND FINANCIAL DISCLOSURES |    |  | 54 | 
|             
|PART III      |  |                                                                                        |    |  |    | 
|ITEM 10.      |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                     |    |  | 54 | 
|ITEM 11.      |  | EXECUTIVE COMPENSATION                                                                 |    |  | 54 | 
|ITEM 12.      |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
	AND MANAGEMENT                        |    |  | 54 | 
|ITEM 13.      |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                         |    |  | 55 | 
|             
|PART IV       |  |                                                                                        |    |  |    | 
|ITEM 14.      |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
	REPORTS ON FORM 8-K                      |    |  | 55 | 
|SIGNATURES    |  |                                                                                        | 60 | 
|EXHIBIT INDEX |  |                                                                                        | 61 | 

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PART I




Item 1.     Business

General

UTEK Corporation, a Delaware corporation, is a
non-diversified, closed-end management investment company that
has elected to be regulated as a business development company
(BDC) under the Investment Company Act of 1940
(1940 Act). As a BDC, UTEK Corporation, referred to
as the Company or we, must be primarily
engaged in the business of furnishing capital and making
available significant managerial assistance to companies that do
not have ready access to capital through conventional financial
channels. Such companies are termed portfolio
companies.

The Company commenced operations in 1997 as UTEK
Corporation (UTEK Florida), which was incorporated
under the laws of the State of Florida in August 1996. UTEK
Florida was engaged in the business of technology transfer. On
December 31, 1998, we formed UTEK, LLC, a limited liability
company organized under the laws of the State of Florida.
Subsequent thereto, the shareholders of UTEK Florida exchanged
their shares of common stock for membership units in UTEK, LLC.
In July 1999, we formed UTEK Corporation under the laws of the
State of Delaware and in October 1999, UTEK LLC was merged into
UTEK Corporation. Prior to and since our election to operate as
a BDC, we have been engaged in the business of technology
transfer.

Recent Developments

In September 2001, the Company acquired 100% of
PAX Technology Transfer Ltd., a United Kingdom corporation, in a
stock for stock transaction. PAX has provided technology
transfer services for more than 20 years.

We may seek to make additional acquisitions of
technology transfer entities in the future. In considering
whether to purchase a technology transfer company, we evaluate a
number of factors including purchase price, strong ties and
relationships with universities and research centers,
intellectual property rights to significant technologies, and
equity ownership in portfolio companies which possess
significant opportunity for growth.

Strategies

Our primary investment objective is to increase
our net assets by exchanging stock in our portfolio companies
for cash and other assets we will use to acquire additional
technologies. We seek to achieve our investment objective by
developing our portfolio companies that identify, license and
market new technologies invented primarily by employees of
universities and laboratories. We intend to merge our portfolio
companies principally into private and publicly traded companies
in tax free stock for stock exchanges. Shares received in those
exchanges will, in the course of our business, be converted to
cash and other assets to permit us to invest in additional
portfolio companies. As of December 31, 2001, we have
completed fifteen transactions, including fourteen mergers and
one stock sale.

As a BDC, we generally may change our
non-fundamental investment objectives and policies without
stockholder approval but we require stockholder approval to
change our fundamental investment objectives. We do not have a
registered investment adviser and our management, under the
supervision of our Board of Directors, makes our management
decisions.

Since our election to operate as a BDC, we have
concentrated our efforts on making controlling equity
investments in portfolio companies in private transactions. Our
investments consist of funding to be used to identify, research
and market new technologies and for the acquisition of licenses
to those new technologies and, when appropriate, the support of
sponsored research programs to further the development of
licensed technology. In return for our investments, we
principally receive common stock in our portfolio companies. We
also provide these portfolio companies with significant
managerial assistance, which includes, among other things,
having one or more members of our management serve as directors
and officers of our portfolio companies. After we have made an
investment, we help our portfolio companies by researching,
identifying and developing new technologies and markets. We also
assist them in acquiring the licenses to new

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technologies developed at universities and
research laboratories. Our management provides portfolio
companies with significant assistance in locating and acquiring
these technologies and markets for them. We then find merger
partners for our portfolio companies that will acquire the
portfolio company from us in exchange for cash and other assets.


Our investments are concentrated in small or
development stage companies that license and develop new
technologies for commercial applications. Moreover, our
investments in portfolio companies may be concentrated in one or
more industries. In this event, we will not obtain any
advantages that may result from diversifying our portfolio
company investments among more industries. We do not contemplate
permitting our portfolio companies to expend significant sums of
money on a new venture, which cannot be recovered in due course,
absent the execution of letters of intent or definitive merger
agreements for the resale of the technology or the merger of the
portfolio company. However, we intend to make initial
investments in our portfolio companies in amounts sufficient to
permit them to conduct initial research, acquire technology
licenses and, in some cases, to fund additional development of
new technologies and markets. Since all of our portfolio
companies are early stage companies, our portfolio company
investments do not benefit from any diversification of risk that
may result from spreading investments among companies at various
stages of development. Furthermore, a portfolio company may
spend all of the money that we have invested without finding,
acquiring or locating a new technology or suitable market for a
new technology, in which case we would likely lose our entire
investment in the portfolio company.

We intend to take advantage of our experience in
the field of technology transfer to maximize the return on our
investments in portfolio companies. Technology transfer refers
to the process by which new technologies, developed in
universities, government research facilities, or similar
research settings, are licensed to companies for commercial
development and use. Our management and certain members of our
Board of Directors have experience in technology transfer. Our
investments in our portfolio companies are structured, through
our U2B® investment model, to allow us to take advantage of
our managements expertise and to give us control of the
portfolio company. In addition, we intend to capitalize on
relationships that members of our management and Board of
Directors have developed with universities and government
research laboratories.

To facilitate establishing on-going consulting
engagements with its clients, the Company has developed a
strategic alliance process. UTEKs strategic alliances are
designed to help technology companies enhance their new product
pipeline through the acquisition of proprietary intellectual
capital from universities and federal laboratories.

UTEK normally receives unregistered common stock
from its clients as payment for strategic alliance consulting
engagements.

Subject to limitations imposed by the 1940 Act,
our investment objectives, policies and investment
diversification status may change at any time and from time to
time without stockholder approval.

We anticipate that a substantial portion of our
investment opportunities will be presented to us as a result of
managements contacts with universities, research
laboratories and in private industry.

Our Investment Model

Our investments in portfolio companies generally
follow a specific series of steps, which our management believes
provide the greatest opportunity for long term appreciation of
our assets. As our investments are designed to bring and develop
technologies from their inception at universities to the private
sector, we refer to our investment model as
U2B®. Using our U2B® investment model, we
intend to acquire securities in portfolio companies and
eventually exchange those securities for securities in companies
that acquire our portfolio companies. The following is a list of
the steps that we generally take when we make an investment in a
portfolio company using our investment model:



| |                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. Evaluate potential technology growth
	fields.                                                                                                                              
|
| | 2. Form and make a controlling equity
	investment in the portfolio company.                                                                                                   
|
| | 3. Assist the portfolio company in the
	identification and evaluation of new technologies and markets
	that offer the portfolio company a significant opportunity for
	growth.

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| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4. When appropriate, advise and assist the
	portfolio company in negotiating a sponsored research agreement
	to further develop the technology.                   
|
| | 5. Identify and contact potential
	merger partners to merge with the portfolio company.                                                                         
|
| | 6. Advise and assist the portfolio company
	in completing the technology transfer with the research
	institution and acquiring the license to the technology.     
|
| | 7. Complete the sale of the portfolio
	company to the merger partners and receive
	compensation for the sale of all the stock we hold in the
	portfolio company.
|
| | 8. Sell any securities received in exchange
	for the portfolio company and use the proceeds to make
	additional investments.                                      

Investment Evaluation Process

New technology opportunities may come to our
attention from many sources. The primary sources to date have
been from our managements contacts with universities and
the private sector. We believe that the ability of our
management to maintain and develop relationships with university
and research laboratories is a key factor in our ability to
identify new potential investment opportunities.

Prior to the Company committing funds to an
investment opportunity, we will assist the portfolio company by
conducting research regarding the prospects and risks of the
potential investment. Our Scientific Advisory Council (discussed
below) and managements experience is helpful in evaluating:



| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| |  | new technologies,                                                                                       
|
| |  | products,                                                                                               
|
| |  | markets,                                                                                                
|
| |  | industry trends,                                                                                        
|
| |  | financial requirements,                                                                                 
|
| |  | competition, and                                                                                        
|
| |  | the operating record and quality of the
	entrepreneurial group associated with a prospective investment.

Although our management has scientific and
professional experience, they may have limited or no experience
in the specific areas of business in which potential merger
candidates are engaged.

Strategic Alliances

To facilitate establishing on-going consulting
engagements with its clients, the Company has developed a
strategic alliance process. UTEKs strategic alliances are
designed to help technology companies rapidly enhance their new
product pipeline through the acquisition of proprietary
intellectual capital from universities and federal laboratories.

This process usually includes performing the
following activities:



| |   |                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Constructing a technology acquisition profile
	that is approved by the client.                                                                                                                                                                                                                          
|
| |  | Acquiring and reviewing new technology
	acquisition opportunities from leading university and federal
	laboratory research centers that potentially meet this profile.                                                                                                                                  
|
| |  | When a client has expressed an interest in
	learning more about a specific technology acquisition
	opportunity, UTEK will acquire additional information about the
	technology and share it with the client.                                                                                            
|
| |  | At our clients request, UTEK will negotiate
	licenses to acquire technologies.                                                                                                                                                                                                                         
|
| |  | On a case-by-case basis, when both UTEK and our
	client agree to move forward to acquire a specific technology,
	UTEK will propose an equity-financing plan for the technology
	acquisition. Alternatively, our clients may acquire UTEK
	introduced technology directly from the research institutions.

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Investments in Portfolio Companies

Our initial investments will be made in
transactions that will normally be negotiated directly by our
management, with the portfolio company or an affiliate of the
portfolio company. In all prior and most future instances, we
have formed or will form our portfolio companies as
subsidiaries. Our management will seek to structure the terms of
the investment so as to provide for the capital needs and
success of the portfolio company and at the same time to
maximize our opportunity for long-term capital appreciation.

We intend to limit our total cash investments in
any individual portfolio company to the lesser of $500,000 or an
amount equal to ten percent of our net assets at the time of
investment. To date, our initial investments in portfolio
companies have been significantly less than $500,000. By
limiting the size of our total investment in any one portfolio
company, we hope to reduce and diversify our risks. In exchange
for our investment, we will receive such number of shares of
common stock in the portfolio company to give us a controlling
interest. To date, all of our portfolio company securities have
been common stock, and we anticipate that we will continue to
acquire common stock in portfolio companies. Use of the funds
that we provide to portfolio companies will be restricted to
obtaining licenses to new technologies and developing and
marketing those technologies. Our managements involvement
with the portfolio companies will primarily be directed towards
helping them acquire technology licenses and, when appropriate,
establishing sponsored research programs to further develop the
technology. We then plan to sell our portfolio investments to
public and private companies.

Identifying New Technologies

We have developed relationships with a number of
universities and research centers in the United States and
Europe. In order to provide us early access to new technologies,
or to acquire or develop specific technologies, we have entered
into alliances, licensing, license option agreements and/or
sponsored research agreements with the following institutions:

Agreement
with the University of South Florida

In January 1998, we entered into an agreement
with the University of South Florida pursuant to which we have
agreed to review and evaluate the commercial potential of
certain new technologies developed at the university that are
presented to us. In return, we have the ability, if we and the
university deem it appropriate, to enter into license option
agreements with the university providing us with the exclusive
right to seek a licensee or other commercial opportunity for the
technology, provided mutually agreeable terms are reached, for a
limited period of time. We have reviewed and negotiated licenses
with the University of South Florida on the following
technologies:



| |   |                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------
| |  | a new diagnostic test for colon, testicular and
	ovarian cancer,                                                       
|
| |  | a new software technology for digitally coloring
	MRIs to facilitate their reading and the rendering of diagnoses,
	and
|
| |  | a new technique to identify cryptosporidium (a
	water-borne parasite) in water.                                        

The term of the original agreement was for three
years. On February 15, 2001, the agreement was extended for
an additional three years, but may be terminated by either party
on 60 days written notice.

Agreement
with the University of Memphis

In May 1998, we entered into an agreement with
the University of Memphis pursuant to which we have agreed to
evaluate the commercial potential of select technologies
developed at the university that are presented to us for review.
The university has agreed that upon our request, it will file
patents to protect technologies that we wish to have protected.
In addition, under the agreement, the university may grant to us

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license option agreements which will give us the
exclusive rights to license a particular technology, provided
mutually agreeable terms are reached, for a period of
12 months.


The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with Johns Hopkins University

In June 1999, we entered into an agreement with
Johns Hopkins University pursuant to which we have agreed to
evaluate the commercial potential of certain technologies
developed at the university that are presented to us for review.
The university has agreed that upon our request, it will file
patents to protect technologies that we wish to have protected.
In addition, under the agreement, the university may grant to us
license option agreements which will give us the exclusive
rights to license the technology, provided mutually agreeable
terms are reached, for a period of 12 months.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with the University of Florida

In October 1999, we entered into an agreement
with the University of Florida pursuant to which we have agreed
to evaluate the commercial potential of certain technologies
developed at the university that are presented to us for
evaluation. Under the agreement, the university may grant us
license option agreements which will give us the exclusive
rights to license the technology, provided mutually agreeable
terms are reached, for a period of 12 months.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with Fraunhofer Institute of Germany for Interfacial Engineering
and Biotechnology IGB

In November 1999, we entered into a strategic
alliance with Fraunhofer Institute pursuant to which we have
agreed to review certain technologies developed at Fraunhofer to
gauge the potential for successful commercialization in the
United States. Pursuant to the agreement, Fraunhofer may grant
to us a 12-month, exclusive, royalty-free license option for the
technologies reviewed, if we so request. We may then license
these technologies, provided mutually agreeable terms are
reached.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with Virginia Tech Intellectual Properties

In December 1999, we entered into an agreement
with Virginia Tech Intellectual Properties pursuant to which we
have agreed to evaluate the commercial potential of certain
technologies developed at Virginia Tech Intellectual Properties
that are presented to us for evaluation. Under the agreement,
Virginia Tech Intellectual Properties may grant us license
option agreements which will give us the exclusive rights to
license the technology, provided mutually agreeable terms are
reached, for a period of 12 months.

The term of the agreement is five years, but may
be terminated by either party on 30 days written notice.

Agreement
with Florida State University Research Foundation

In December 1999, we entered into an agreement
with Florida State University Research Foundation to review
certain technologies developed at the Research Foundation to
gauge their potential for successful commercialization. Under
the agreement, the Research Foundation may grant us a 12-month
exclusive, royalty-free license option agreement for these
technologies. We may then license these technologies, provided
mutually agreeable terms are reached, for a period of
12 months.

The term of the agreement is five years but may
be terminated by either party on 60 days written notice.

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Agreement
with Florida Institute of Technology

In March 2000, we entered into an agreement with
Florida Institute of Technology to review certain technologies
developed at Florida Institute of Technology to gauge their
potential for successful commercialization. Under the agreement,
Florida Institute of Technology may grant us a 12-month
exclusive, royalty-free license option agreement for these
technologies. We may then license these technologies, provided
mutually agreeable terms are reached, for a period of
12 months.

The term of the agreement is five years but may
be terminated by either party on 60 days written notice.

Agreement
with Sopartec

In May 2000, we entered into an agreement with
Sopartec of Louvain-la-Neuve, to review certain technologies
developed at the Universite Catholique de Louvain, a
university located in Belgium, to gauge their potential for
successful commercialization in the United States. Under the
agreement, either the Universite or Sopartec may grant us
exclusive 12-month options to license certain technologies,
provided mutually agreeable terms are reached.

The term of the agreement is for five years but
may be terminated by either party on 60 days written notice.

Agreement
with Auburn University

In June 2000, we entered into an agreement with
Auburn University to review certain technologies developed at
Auburn to gauge their potential for successful
commercialization. Under the agreement, Auburn may grant us an
exclusive, 12-month royalty-free license option agreement for
these technologies.

The term of the agreement is five years but may
be terminated by either party on 60 days written notice.

Agreement
with California Institute of Technology

In March 2000, we entered into a license
agreement with California Institute of Technology (also known as
Caltech) for their new software technology designed to produce
human likenesses that should be able to simulate conversations
for e-commerce applications. We merged our portfolio company
Digital Personnel, Inc., which held this license, with Graphco
Technologies Inc. in March 2000. For a detailed discussion of
this transaction, see Business  Identifying
Acquisition Candidates.

Agreement
with Dartmouth College

In December 2000, we entered into an agreement
with Dartmouth College to review its selected intellectual
properties and/ or new invention disclosures to gauge their
potential for successful commercialization. Under the agreement,
Dartmouth College may grant us a 12-month exclusive,
royalty-free license option agreement for these technologies.

The term of the agreement is for five years but
may be terminated by either party on 60 days written notice.

In addition, we have acquired two licenses to a
new deicing technology developed at Dartmouth College. We merged
our portfolio companies Ice Surface Development, Inc. and
Technology Development, Inc., which held these licenses in
November 2000 and February 2001, respectively. For a detailed
discussion of this transaction, see Business 
Identifying Acquisition Candidates.

Agreement
with Cornell University

In May 1999, we entered into a license agreement
with Cornell University for their carbon fiber reinforcing bar
technology. In addition, we funded a sponsored research project
at Cornell to further test the technology. We merged our
portfolio company Advanced Reinforcing Sciences, Inc., which
held this license,

6



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with NuBar, Inc in May 1999. For a detailed
discussion of this transaction, see Business 
Identifying Acquisition Candidates.


Agreement
with Florida International University

In August 2001, we entered into an agreement with
Florida International University to review certain technologies
developed at Florida International University to gauge their
potential for successful commercialization. Under the agreement,
the Florida International University may grant us a 12-month
exclusive, royalty-free license option agreement for these
technologies. We may the license these technologies, provided
mutually agreeable terms are reached, for a period of
12 months.

The term of the agreement is five years, but may
be terminated by either party on 30 days written notice.

Agreement
with Rutgers University

In December 2001, we entered into an agreement
with Rutgers University pursuant to which we have agreed to
evaluate the commercial potential of certain technologies
developed at the university that are presented to us for
evaluation. The university has agreed that upon our request, it
will file patents to protect technologies that we wish to have
protected. In addition, under the agreement, the university may
grant to us license option agreements which will give us the
exclusive rights to license the technology, provided mutually
agreeable terms are reached, for a period of 3 months.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with University of Akron

In August 2001, we entered into an agreement with
the University of Akron pursuant to which we have agreed to
evaluate the commercial potential of certain technologies
developed at the university that are presented to us for
evaluation. The university has agreed that upon our request, it
will file patents to protect technologies that we wish to have
protected. In addition, under the agreement, the university may
grant to us license option agreements which will give us the
exclusive rights to license the technology, provided mutually
agreeable terms are reached, for a period of 6 months.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with University of Hawaii

In May 2001, we entered into an agreement with
the University of Hawaii pursuant to which we have agreed to
evaluate the commercial potential of certain technologies
developed at the university that are presented to us for
evaluation. The university has agreed that upon our request, it
will file patents to protect technologies that we wish to have
protected. In addition, under the agreement, the university may
grant to us license option agreements which will give us the
exclusive rights to license the technology, provided mutually
agreeable terms are reached.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with University of Maryland

In January 2000, we entered into a license
agreement with the University of Maryland for a lung cancer
diagnostic technology. In addition, we funded a sponsored
research project at the university to further test the
technology. We sold our portfolio company Cancer Diagnostics,
Inc., which held this license, to Lexon, Inc. in January 2000.
For a detailed discussion of this transaction, see
Business  Identifying Acquisition
Candidates.

Agreement
with University of Missouri

In September 2001, we entered into a license
agreement with the University of Missouri for a new technology,
which allows for the encapsulation of a variety of substances at
low temperatures. We merged our

7



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##### 



portfolio company Advanced Microsphere
Technology, Inc., which contained this license, with Prime
Pharmaceutical Corporation in September 2001. For a detailed
discussion of this transaction, see Business 
Identifying Acquisition Candidates.


Agreement
with University of Miami

In April 2001, we entered into an agreement with
the University of Miami to review certain technologies developed
at the University of Miami to gauge their potential for
successful commercialization. Under the agreement, the
University of Miami may grant us a 9-month exclusive,
royalty-free license option agreement for these technologies. We
may the license these technologies, provided mutually agreeable
terms are reached, for a period of 9-months.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

In addition, in April 2001, we entered into a
license agreement with the University of Miami for a new
technology for masking an Auxiliary Channel in the phase of
Spectrum of Stereo Audio. We merged our portfolio company
Watermark Technologies, Inc., which held this license, with
Bitzmart, Inc. in April 2001. For a detailed discussion of this
transaction, see Business  Identifying
Acquisition Candidates.

Agreement
with University of South Alabama

In May 2000, we entered into a license agreement
with the University of South Alabama to acquire a process for
converting crumb rubber into commodity chemicals. We sold our
Advanced Recycling Sciences portfolio company, which held this
license, to the Quantum Group, Inc in May 2000. Subsequently,
the Quantum Group changed their name to Advanced Recycling
Sciences, Inc.

Agreement
with University of Warwick

In January 2002, we entered into an agreement
with the University of Warwick, a university located in England,
to review certain technologies developed at the University of
Warwick to gauge their potential for successful
commercialization. Under the agreement, the University of
Warwick may grant us a 90-day exclusive, royalty-free license
option agreement for these technologies. We may the license
these technologies, provided mutually agreeable terms are
reached, for a period of 90-days.

The term of the agreement is five years, but may
be terminated by either party on 60 days written notice.

Agreement
with University of West Florida

In March 2001, we entered into an agreement with
the University of West Florida to review certain technologies
developed at the University of West Florida to gauge their
potential for successful commercialization. Under the agreement,
the University of West Florida may grant us a 12-month
exclusive, royalty-free license option agreement for these
technologies. We may the license these technologies, provided
mutually agreeable terms are reached, for a period of 12-months.

The term of the agreement is five years, but may
be terminated by either party on 30 days written notice.

Evaluation and Acquisition of
Technology

With few exceptions, all technologies developed
by university faculty are the property of the universities and
are licensed by the universitys research foundations or
similar organizations to our portfolio companies for
commercialization. To help facilitate the identification of and
access to new technology, we have created a Scientific Advisory
Council to review technologies developed at universities and
laboratories.

When we assist a portfolio company to evaluate a
new technology, we review the technology to make sure that it
meets three criteria:



| |   |                                                                                             
| | - | --------------------------------------------------------------------------------------------
| |  | the technology should represent a significant
	advance over existing technologies;          
|
| |  | there should be an existing global market for the
	technology once it is commercialized; and

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| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| |  | the technology should be socially responsible
	(i.e., not intended for destructive or harmful purposes).

If, in our managements view, a technology
meets these criteria, then we will assist the portfolio company
in commencing negotiations with the technology developer to
arrange for a license. Normally, we seek to acquire on behalf of
our portfolio companies a worldwide exclusive license for the
field of use beneficial to acquirers of our portfolio companies.
These licenses usually have an upfront fee, royalty provision,
and minimum annual royalties. Pursuant to the terms of our
license agreements, all rights to royalties remain with the
university or research institute that grants the license. The
term for most agreements is for the life of the intellectual
property underlying the license. Our management will review
license agreements and advise portfolio companies as to license
terms and requirements. In addition, when we require assistance
in evaluating a technology, our management will have the
technology reviewed by members of our Scientific Advisory
Council or other individuals we may deem appropriate.

Scientific Advisory Council

Dr. Uwe Reischl, our president, serves as
the executive director of the Scientific Advisory Council.
During 2001 our Scientific Advisory Council consisted of the
following members:

|                            |  |                                                            |  |                                                                                         
|--------------------------- |  | ---------------------------------------------------------- |  | ----------------------------------------------------------------------------------------
|Name                        |  | Title                                                      |  | Expertise                                                                               
|                            |  |                                                            |  |                                                                                         
|Albert J. Anthony, D.M.D.   |  | Retired                                                    |  | Dentistry and dental equipment.                                                         
|                           
|Günter Blobel, M.D., Ph. D  |  | Professor, Cell Biology, Rockefeller University            |  | Cell biology/ Nobel Prize winner in Medicine
	(1999).                                   
|                           
|Alain M. Boudet, Ph.D.      |  | Professor, University of Paul Sabatier                     |  | Cell and molecular plant biology.                                                       
|                           
|Russell Brantman, Ph.D.     |  | Consultant                                                 |  | Mechanical engineering/ Systems Engineering/
	Vehicle safety systems/ Crash simulations.
|                           
|Tzann T. Fang, M.D.         |  | Physician, Midwestern Regional Medical Center              |  | Medical oncology/ Internal medicine/ Hematology.                                        
|                           
|Gerald Krueger, Ph.D., CPE  |  | Principal Scientist/ Ergonomist, Col. U.S. Army
	(retired) |  | Human performance enhancement/ Human systems
	design.                                   
|                           
|Jean-Marie Lehn, Ph.D.      |  | Professor, College de France, Strasbourg, France           |  | Nanotechnologies/ Nobel Prize winner in Chemistry
	(1987).                              
|                           
|O. Norman Nesheim, Ph.D.    |  | Professor, University of Florida                           |  | Pesticide regulation and safety management/ Food
	and water safety with pesticide use.  
|                           
|George Newkome, Ph.D.       |  | Vice President of Research, University of Akron            |  | Molecular chemistry.                                                                    
|                           
|Charles Proctor, Ph.D., P.E |  | Research Associate Professor, University of
	Florida       |  | Orthopedic implants and devices.                                                        
|                           
|Peter Reischl, Ph.D.        |  | Professor, San Jose State University                       |  | Electrical engineering/ High frequency energy
	conversion.                              

9



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|                         |  |                                                                |  |                                                           
|------------------------ |  | -------------------------------------------------------------- |  | ----------------------------------------------------------
|Name                     |  | Title                                                          |  | Expertise                                                 
|                         |  |                                                                |  |                                                           
|Brian B. Schwartz, Ph.D. |  | Professor, Graduate School of the City University
	of New York |  | Physics and material science.                             
|                        
|Dean Sheppard, M.D.      |  | Professor, University of California
	 San Francisco           |  | Molecular biology.                                        
|                        
|Michael Zaworotko, Ph.D. |  | Professor, University of South Florida                         |  | Nanotechnology/Crystal engineering/X-ray
	crystallography.
|                        
|Walter Kohn, Ph.D.       |  | Professor, University of California Santa Barbara              |  | Chemistry                                                 
|                        
|Marcel Crochet, Ph.D.    |  | Recteur, Universite Catholique de Louvain, Belgium             |  | Fluid Mechanics                                           

The Company had established a European Advisory
Council for the purpose of developing business in Europe.
Following the acquisition of PAX Technology Transfer, Ltd., as
the base of our European operations, the Company dissolved the
European Advisory Council in February 2002 as it had achieved
its purpose.

Portfolio Companies

As of the date of this report, each of our
investments in our portfolio companies was for amounts of less
than 5% of our total assets. We have controlling interests in
each of our portfolio companies and members of our management
also serve as officers and directors of each portfolio company.
The principal place of business of each portfolio company is
located at our executive offices at 202 South Wheeler Street,
Plant City, Florida. In addition to our investment, we provide
portfolio companies with managerial assistance in completing
technology transfers. We have not made loans to any of our
portfolio companies. The following is a list of our portfolio
companies as of December 31, 2001, with a brief description
of their business:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Ocular Technologies, Inc.(formerly Advanced Desalination
	Technologies, Inc.) is a development stage company that is
	seeking to acquire medical diagnostic technologies. We own 100%
	of the common stock of Ocular Technologies, Inc. We have
	invested $300 in Ocular Technologies, Inc. as of
	December 31, 2001. Dr. Uwe Reischl, our president, is
	the sole director and president of Ocular Technologies, Inc.                                                                                                                                                                                            
|
| | UTEK Real Estate Holdings, Inc.(formerly Doppler Tomography
	International, Inc.) is a development stage company that is
	to hold future real estate assets for the Company. The Company,
	through UTEK Real Estate Holdings, Inc., may purchase an office
	facility for its principal executive office and/or for
	investment. We own 100% of the common stock of UTEK Real Estate
	Holdings, Inc. We have invested $900 in UTEK Real Estate
	Holdings, Inc. as of December 31, 2001. Sam Reiber, our
	vice president and general counsel, is the sole director and
	president of UTEK Real Estate Holdings, Inc.
|
| | Advanced Sensor Technologies, Inc.(formerly Composite Springs
	Technologies, Inc.) is a development stage company that is
	currently seeking to acquire licenses to new nano science
	technologies. We own 100% of the common stock of Advanced Sensor
	Technologies, Inc. We have invested $1,002 in Advanced Sensor
	Technologies, Inc. as of December 31, 2001. Dr. Uwe
	Reischl, our president, is the sole director and president of
	Advanced Sensor Technologies, Inc.                                                                                                                                     
|
| | Fiber-Gel Technologies,
	Inc.(formerly Universal Key Pad,
	Inc.) is a development stage company that is seeking to
	acquire licenses to new food science technologies. We own 100%
	of the common stock of Fiber-Gel Technologies, Inc. We have
	invested $400 in Fiber-Gel Technologies, Inc. as of
	December 31, 2001. Dr. Uwe Reischl, our president, is
	the sole director and president of Fiber-Gel Technologies, Inc.                                                                                                                                                                                      

10



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All of the foregoing portfolio companies are
privately held and their shares have been valued in good faith
by our Board of Directors in lieu of a readily ascertainable
market value.

Identifying Acquisition Candidates

In order to realize a return on our investments
in our portfolio companies, we must sell our portfolio companies
or the technology and development rights they hold. Based on
current federal tax law and industry conditions, it is our
policy to sell our portfolio companies to acquirers in merger
transactions where we receive shares in the acquiring company in
a federal tax-free exchange for all of our shares in our
portfolio company. In this manner, all rights to technologies
held by our portfolio company transfer to the acquirer, and the
acquirer assumes all obligations under the license agreement and
sponsored research agreement if present. Our merger transactions
to date have been with both public companies and private
companies whose common stock is not publicly traded. As a result
of merger transactions, the Company holds shares in public
companies, including Lexon, Inc., Advanced Recycling Sciences,
Inc., NuElectric Corporation., Torvec, Inc., Sense Holdings,
Inc. and Centrex Inc. As of December 31, 2001, all of the
securities that we have received in exchange for our portfolio
companies are restricted securities, as that term is
defined under Rule 144. These securities may not be sold in
the absence of registration under the Securities Act of 1933 or
an exemption therefrom. As a result, our ability to sell or
otherwise transfer the securities we hold will be limited.

Our management and staff have primary
responsibility for locating suitable merger partners.

Technology transfer transactions that we have
completed include the following:

Gentest,
Inc./Lexon, Inc.

In May 1998, Gentest, Inc. a portfolio company,
merged with Lexon, Inc., a development stage Oklahoma
corporation. In connection with the merger, we received
1,000,000 unregistered shares of Lexon common stock and Lexon
acquired ownership of Gentest, Inc., which had acquired the
exclusive license to develop, manufacture and market a blood
test that will potentially allow for the early screening of
colon cancer and certain types of ovarian and testicular
cancers. Lexon is developing this blood test for general
laboratory use. The prototype blood test kit requires additional
evaluation and testing and cannot be sold in the United States.
The blood test kit requires FDA approval before it can be sold
in the United States. Lexon is a public development stage
company with shares traded on the over-the-counter bulletin
board under the symbol LXXN. As of December 31, 2001, we
owned 236,000 shares of Lexon common stock, which represents
approximately 1.5% of the issued and outstanding common stock of
Lexon as of December 31, 2001.

Image Analysis
Corporation/Image Analysis, Inc.

In January 1999, Image Analysis Corporation, a
portfolio company, merged with Image Analysis, Inc., a
development stage Oklahoma corporation. In connection with the
merger, we received 879,300 unregistered shares of common stock
of Image Analysis, Inc. As a result of the merger, Image
Analysis, Inc. holds the exclusive license, patented in the
United States and other countries, to a new technology for
producing color magnetic resonance images, or MRI, from existing
MRI scanners. Image Analysis, Inc. is currently funding research
and development of this new technology. The research is being
conducted at Brenau University in Georgia under the direction of
Dr. Keith Brown, the inventor of the technology. Image
Analysis, Inc. is a privately held company. As of
December 31, 2001, we owned 879,300 shares of common stock
of Image Analysis, Inc., which represents approximately 11.2% of
the issued and outstanding common stock of Image Analysis, Inc.
as of December 31, 2001.

E. Coli
Measurement Systems, Inc./Centrex, Inc.

In May 1999, E. Coli Measurement Systems, Inc., a
portfolio company, merged with Centrex, Inc., a development
stage Oklahoma corporation. In connection with the merger, we
received 900,000 unregistered shares of Centrex, Inc. common
stock. As a result of this acquisition Centrex has acquired the
exclusive license to a new technology for the detection of E.
Coli bacteria in food and water. In July 1999, E. Coli
Measurement Systems, Inc. entered into a licensing and sponsored
research agreement with the University of

11



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##### 



California regarding an E. Coli detection
technology. The technology was developed at the Los Alamos
National Laboratory and may be useful for the rapid detection of
E. Coli in food and water. Centrex, Inc. is a public development
stage company with shares traded on the over-the-counter
bulletin board under the symbol CNEX. As a result of two
transactions with Centrex, Inc., we owned 1,584,000 shares of
Centrex common stock at December 31, 2001, which represents
approximately 12.8% of the issued and outstanding common stock
of Centrex as of December 31, 2001.


Advanced
Reinforcing Technologies, Inc./Nubar, Inc.

In May 1999, Advanced Reinforcing Technologies,
Inc., a portfolio company, merged with Nubar, Inc., a
development stage Oklahoma corporation (formerly Nucor
Enterprises, Inc.). In connection with the merger, we received
900,000 unregistered shares of common stock of Nubar, Inc.
Nubar, Inc. is involved with the development of new materials
for rebuilding and enhancing the infrastructure of roads and
bridges. Pursuant to the merger, Nubar, Inc. acquired the
exclusive license for a new carbon fiber composite rebar
building technology developed at Cornell University. In
addition, Advanced Reinforcing Technologies established a
sponsored research program for further development of its
technology. Nubar, Inc. is a privately held company. As of
December 31, 2001, we owned 900,000 shares of common stock
of Nubar, Inc., which represents approximately 12.9% of the
issued and outstanding common stock of Nubar, Inc. as of
December 31, 2001.

Clean Water
Technologies, Inc./NuElectric Corporation.

In June 1999, our portfolio company Clean Water
Technologies, Inc., merged with NuElectric Inc., a development
stage Delaware corporation. NuElectric is in the business of
acquiring, developing and marketing new technologies for
conserving energy and protecting the environment. In connection
with the merger, we received 791,957 unregistered shares of
NuElectric common stock. As a result of the merger, NuElectric
acquired the exclusive license to a new technology for removing
arsenic from water. As of December 31, 2001, we owned
1,037,957 shares of NuElectric common stock, which represents
approximately 22.0% of the issued and outstanding common stock
of NuElectric as of December 31, 2001.

Safe Water
Technologies, Inc./Centrex, Inc.

In September 1999, Safe Water Technologies, Inc.,
a portfolio company, merged with Centrex, Inc., a development
stage Oklahoma corporation. In connection with the merger, we
received 684,000 unregistered shares of Centrex, Inc. common
stock. As a result of the merger, Centrex holds an exclusive
license to a new technology developed at the University of South
Florida for the automated detection of Cryptosporidium and
Giardia in water. Centrex, Inc. is a public development stage
company with shares traded on the over-the-counter bulletin
board under the symbol CNEX. As a result of two transactions, we
owned 1,584,000 shares of Centrex common stock at
December 31, 2001, which represents approximately 12.8% of
the issued and outstanding common stock of Centrex as of
December 31, 2001.

Cancer
Diagnostics, Inc./Lexon, Inc.

In January 2000, Lexon, Inc. purchased all of the
issued and outstanding stock of Cancer Diagnostics, Inc., one of
our portfolio companies, for $200,000. Under the terms of the
stock purchase agreement, we have received $170,000 from Lexon,
Inc. However, Lexon, Inc. was not able to pay us the remaining
balance as required by the stock purchase agreement. We received
236,000 shares of Lexon, Inc. common stock for payment in full
of the outstanding balance plus interest in 2001.

Digital
Personnel, Inc./Graphco-DPI Holding Company

In March 2000, Digital Personnel, Inc., a
portfolio company, merged with Graphco-DPI Holding Company, a
wholly-owned subsidiary of Graphco Technologies, Inc., a
development stage New Jersey corporation. In connection with the
merger, we received 100,799 unregistered shares of common stock
of Graphco Technologies, Inc. Graphco Technologies, Inc. is
involved with the development of personal

12



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identification technology and software solutions
for computer aided maintenance and support. As a result of the
merger, Graphco Technologies, Inc. acquired the exclusive
worldwide license to technology for new software designed to
produce human likenesses that should be able to simulate
conversation for e-commerce applications. Graphco Technologies,
Inc. is a privately held company. As of December 31, 2001,
we owned 100,799 shares of common stock of Graphco Technologies,
Inc., which represents approximately 0.6% of the issued and
outstanding common stock of Graphco Technologies, Inc. as of
December 31, 2001.




| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Advanced Recycling Sciences, Inc./Advanced
	Recycling Sciences, Inc. (formerly The Quantum Group,
	Inc.)

In June 2000, Advanced Recycling Sciences, Inc.,
a portfolio company, merged with Advanced Recycling Sciences,
Inc., a development stage Nevada corporation. In connection with
the merger, we received 931,000 unregistered shares of common
stock of Advanced Recycling Sciences, Inc. Advanced Recycling
Sciences, Inc. is a public development stage company with shares
traded on the over-the-counter bulletin board under the symbol
ARYC. Advanced Recycling Sciences, Inc. provides technology for
recycling vehicular tires. As a result of the merger, Advanced
Recycling Sciences, Inc. acquired the worldwide license to a
technology for a method of reclamation of scrap-vulcanized
rubber using supercritical fluids. As of December 31, 2001,
we owned 2,326,153 shares of common stock of Advanced Recycling
Sciences, Inc., which represents approximately 14.1% of the
total issued and outstanding common stock of Advanced Recycling
Sciences, Inc. as of December 31, 2001.

Zorax,
Inc./NuElectric Corporation.

In September 2000, our portfolio company Zorax,
Inc. merged with NuElectric Corporation., a development stage
Delaware corporation. NuElectric is in the business of
acquiring, developing and marketing new technologies for
conserving energy and protecting the environment. In connection
with the merger, we received 546,000 unregistered shares of
NuElectric common stock. As a result of the merger, NuElectric
acquired an exclusive license to a technology for the separation
of cystic parasitic forms from water. NuElectric is a public
development stage company with shares traded on the
over-the-counter bulletin board under the symbol NRGE. As of
December 31, 2001, we owned 1,037,957 shares of NuElectric
common stock, which represents approximately 22.0% of the issued
and outstanding common stock of NuElectric as of
December 31, 2001.

Ice Surface
Development, Inc./Torvec, Inc.

In November 2000, Ice Surface Development, Inc.,
a portfolio company, merged with Torvec, Inc., a development
stage New York corporation. Torvec, Inc., is a public
development stage company with shares traded on the
over-the-counter bulletin board under the symbol TOVC. In
connection with the merger, we received 1,068,354 unregistered
shares of common stock of Torvec, Inc. Torvec, Inc. is a
developer of highly advanced automotive technologies. As a
result of the merger, Torvec, Inc. acquired the exclusive
worldwide license to a technology that acts as an electronic
system for modifying ice adhesion. As of December 31, 2001,
we owned 1,068,354 shares of common stock of Torvec, Inc., which
represents approximately 4.6% of the issued and outstanding
common stock of Torvec, Inc. as of December 31, 2001.



| |                                                                                                    
| | ---------------------------------------------------------------------------------------------------
| | Technology Development, Inc./Advanced
	Recycling Sciences, Inc. (formerly The Quantum Group,
	Inc.)

In February 2001, Technology Development, Inc., a
portfolio company, merged with Advanced Recycling Sciences,
Inc., a development stage Nevada corporation. In connection with
the merger, we received 1,446,153 unregistered shares of common
stock of Advanced Recycling Sciences, Inc. Advanced Recycling
Sciences, Inc. is a public development stage company with shares
traded on the over-the-counter bulletin board under the symbol
ARYC. As a result of the merger, Advanced Recycling Sciences,
Inc. acquired the worldwide license to a technology for ground
surface application of a novel ice adhesion modification
technology. As of December 31, 2001, we owned 2,326,153
shares of common stock of Advanced Recycling Sciences, Inc.,
which represents approximately 14.1% of the total issued and
outstanding common stock of Advanced Recycling Sciences, Inc. as
of December 31, 2001.

13



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Watermark
Technologies, Inc./Bitzmart, Inc..

In April 2001, Watermark Technologies, Inc., a
portfolio company, merged with Bitzmart, Inc., a development
stage Colorado corporation. Bitzmart, Inc., is a privately held
development stage company. In connection with the merger, we
received 450,000 unregistered shares of common stock of
Bitzmart, Inc. Bitzmart, Inc. is a developer of software for
downloading media products. As a result of the merger, Bitzmart,
Inc. acquired the exclusive worldwide license to a technology
for masking an Auxiliary Channel in the phase of Spectrum of
Stereo Audio. As of December 31, 2001, we owned 641,667
shares of common stock of Bitzmart, Inc., which represents
approximately 28.6% of the issued and outstanding common stock
of Bitzmart, Inc. as of December 31, 2001.

Micro Sensor
Technologies, Inc./Sense Holdings, Inc.

In May 2001, Micro Sensor Technologies, Inc., a
portfolio company, merged with Sense Holdings, Inc., a
development stage Florida corporation. Sense Holdings, Inc., is
a public development stage company with shares traded on the
over-the-counter bulletin board under the symbol SEHO. In
connection with the merger, we received 1,850,000 unregistered
shares of common stock of Sense Holdings, Inc. Sense Holdings,
Inc. is a engaged in the manufacture and sale of biometric
technology. As a result of the merger, Sense Holdings, Inc.
acquired the exclusive worldwide license to a technology for the
detection of unexploded ordinances whether buried or
camouflaged. As of December 31, 2001, we owned 1,850,000
shares of common stock of Sense Holdings, Inc., which represents
approximately 15.6% of the issued and outstanding common stock
of Sense Holdings, Inc. as of December 31, 2001.

Advanced
Microsphere Technology, Inc./Prime Pharmaceutical
Corporation

In April 2001, Advanced Microsphere Technology,
Inc., a portfolio company, merged with Prime
Pharmaceutical Corporation, a development stage Canadian
corporation. Prime Pharmaceutical Corporation is a privately
held development stage company. In connection with the merger,
we received 560,000 unregistered shares of common stock of Prime
Pharmaceutical Corporation. Prime Pharmaceutical Corporation is
a developer of dermatological treatments incorporating the
latest biotechnology. As a result of the merger, Prime
Pharmaceutical Corporation acquired the exclusive worldwide
license to a new technology, which allows for the encapsulation
of a variety of substances at low temperatures. As of
December 31, 2001, we owned 810,000 shares of common stock
of Prime Pharmaceutical Corporation, which represents
approximately 6.2% of the issued and outstanding common stock of
Prime Pharmaceutical Corporation as of December 31, 2001.

To date, we have entered into the following
strategic alliance agreements:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bitzmart,
	Inc. On
	September 14, 2001, we entered into a strategic alliance
	agreement to provide consulting services in exchange for 100,000
	shares of common stock of Bitzmart, Inc. The agreement
	terminated as scheduled September 30, 2001. The Company
	recognized $231,000 in consulting revenue related to this
	agreement. On November 1, 2001, we entered an additional
	strategic alliance agreement to provide consulting services in
	exchange for 50,000 shares of common stock of Bitzmart, Inc. for
	the time period ended December 31, 2001. The Company
	recognized $145,500 in consulting revenue related to the second
	agreement. Revenue from strategic alliance agreements are
	deferred and recognized over the term of each agreement. For a
	detailed discussion of the strategic alliance process see
	Business Strategic Alliances.
|
| | Primapharm Funding
	Corporation On
	October 29, 2001, we entered into a strategic alliance
	agreement to provide consulting services in exchange for
	1,000,000 shares of common stock of Primapharm Funding
	Corporation. The term of the agreement was for one year
	commencing November 9, 2001. The Company recognized $71,151
	in consulting revenue in 2001 related to the agreement. Revenue
	from strategic alliance agreements are deferred and recognized
	over the term of each agreement. For a detailed discussion of
	the strategic alliance process see Business Strategic
	Alliances.                                                                                                                                                                                                                                                             

14



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | USAOneStar.Net,
	Inc. On
	November 28, 2001, we entered into a strategic alliance
	agreement to provide consulting services in exchange for 400,000
	shares of common stock of USAOneStar.Net, Inc. The term of the
	agreement was for one year commencing October 22, 2001. The
	Company recognized $71,151 in consulting revenue related to the
	agreement. Revenue from strategic alliance agreements are
	deferred and recognized over the term of each agreement. For a
	detailed discussion of the strategic alliance process see
	Business Strategic Alliances.

Determination of Net Asset Value

We determine the net asset value per share of our
common stock quarterly. The net asset value per share of common
stock is equal to the value of our total assets minus total
liabilities divided by the total number of shares of common
stock outstanding.

Pursuant to the requirements of the 1940 Act, our
Board of Directors is responsible for determining in good faith
the fair value of our securities and assets for which market
quotations are not readily available. In making its
determination, the Board of Directors may consider valuation
appraisals provided by independent financial experts. With
respect to private equity securities, each investment is valued
using industry valuation benchmarks, and then the value is
assigned a discount reflecting the illiquid nature of the
investment as well as our minority, non-control position. When
an external event such as a purchase transaction, public
offering, or subsequent equity sale occurs, the pricing
indicated by the external event is used to corroborate our
private equity valuation. Equity securities in public companies
that carry certain restrictions on sale are generally valued at
a discount from the public market value of the securities.
Restricted and unrestricted publicly traded stocks may also be
valued at discounts due to the size of our investment or market
liquidity concerns.

The Board of Directors bases its determination
upon, among other things, applicable quantitative and
qualitative factors. These factors may include, but are not
limited to, type of securities, nature of business,
marketability, market price of unrestricted securities of the
same issue (if any), comparative valuation of securities of
publicly-traded companies in the same or similar industries,
current financial conditions and operating results, sales and
earnings growth, operating revenues, competitive conditions and
current and prospective conditions in the overall stock market.

Without a readily ascertainable market value, the
estimated value of our portfolio of equity securities may differ
significantly from the values that would be placed on the
portfolio if there existed a ready market for such equity
securities. Any changes in estimated value are recorded in the
Companys Statements of Operations as Net realized
and unrealized gains (losses).

We have retained Bolten Financial Consulting,
Inc. to provide us with quarterly valuations of the securities
we receive in exchange for portfolio companies. We pay Bolten
Financial Consulting, Inc. a fee each time it values our
investments. In 2001, we paid Bolten Financial Consulting, Inc.
$53,921 for its valuation services.

Portfolio Transactions

The capital stock we receive from portfolio
companies is expected to be acquired primarily in private
transactions negotiated directly with the portfolio company or
an affiliate. Our management will continue to be principally
responsible for conducting negotiations with respect to our
investments in portfolio companies.

In addition to securities of public companies
that we receive as a result of mergers by our portfolio
companies, we may invest a portion of our other assets in the
publicly traded securities of public companies. Such investments
and other investments that are not qualifying assets
may not exceed 30% of the value of our total assets at the time
of any such investment.

Based on the amount of existing available funds,
it is not likely that we will be able to acquire securities in a
large number of companies. As a result, our investments will not
be substantially diversified. Furthermore, the technologies that
our portfolio companies acquire have been, and are expected to
be, sold primarily to early stage public and private companies.
Accordingly, the securities we receive upon the merger of our
portfolio companies will not be diversified among companies at
various stages of development and we will not derive the
benefits, which may arise from making multi-tiered investments.

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Employees

As of December 31, 2001, we employed
nineteen employees in our two offices. Of these employees,
thirteen are based in our Plant City, FL office and six are
based in our UK office. We believe our relations with our
employees are good.

Regulation Under the 1940 Act

We have elected to be regulated as a BDC under
the 1940 Act. A BDC is a special type of closed-end,
non-diversified investment company regulated by the 1940 Act.
The Small Business Investment Incentive Act of 1980 (which we
refer to as the Incentive Act) modified the provisions of the
1940 Act applicable to a BDC. After filing its election to be
treated as a BDC, a company may not withdraw its election
without first obtaining the approval of holders of a majority of
its outstanding voting securities (as defined under the 1940
Act). The following is a brief description of certain provisions
of the 1940 Act, as modified by the Incentive Act, and is
qualified in its entirety by reference to the full text of the
1940 Act, the Incentive Act and the rules thereunder.

Generally, to be eligible to elect BDC status, a
company must engage in the business of furnishing capital and
making available significant managerial assistance to companies
that do not have ready access to capital through conventional
financial channels. Such portfolio companies are termed
eligible portfolio companies. More specifically, in
order to qualify as a BDC, a company must (i) be a domestic
company; (ii) have registered a class of its equity
securities or have filed a registration statement with the
Securities and Exchange Commission pursuant to Section 12
of the Exchange Act; (iii) be operated for the purpose of
investing in the securities of certain types of portfolio
companies, namely, development-stage or emerging companies and
businesses suffering or just recovering from financial distress;
(iv) make available significant managerial assistance
generally to such portfolio companies; (v) have a majority
of directors who are not interested persons (as
defined in the 1940 Act), and (vi) file a proper notice of
election with the SEC.

An eligible portfolio company is generally a
domestic company that is not an investment company and that
(i) does not have a class of securities registered on an
exchange or included in the Federal Reserve Boards
over-the-counter margin list; (ii) is actively controlled
by the BDC and has an affiliate of a BDC on its board of
directors; or (iii) meets such other criteria as may be
established by the SEC. Control under the 1940 Act is presumed
to exist where a BDC beneficially owns more than 25% of the
outstanding voting securities of the portfolio company.

The 1940 Act prohibits or restricts companies
subject to the 1940 Act from investing in certain types of
companies, such as brokerage firms, insurance companies,
investment banking firms and investment companies. Moreover, the
1940 Act limits the type of assets that BDCs may acquire to
certain prescribed qualifying assets and certain assets
necessary for its operations (such as office furniture,
equipment and facilities) if, at the time of acquisition, less
than 70% of the value of the BDCs assets consists of
qualifying assets. Qualifying assets include:



| |   |                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |  | privately acquired securities of companies that
	were eligible portfolio companies at the time such BDC acquired
	their securities;
|
| |  | securities of bankrupt or insolvent companies;                                                                                     
|
| |  | securities of eligible portfolio companies
	controlled by a BDC;                                                                   
|
| |  | securities received in exchange for or
	distributed on or with respect to any of the foregoing, and                                
|
| |  | cash items, government securities and
	high-quality short-term debt.                                                               

The 1940 Act also places restrictions on the
nature of the transactions in which, and the persons from whom,
securities can be purchased in order for the securities to be
considered qualifying assets. Such restrictions include limiting
purchases to transactions not involving a public offering and
acquiring securities directly from either the portfolio company
or their officers, directors or affiliates.

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We are permitted by the 1940 Act, under specified
conditions, to issue multiple classes of senior debt and a
single class of preferred stock if our asset coverage, as
defined in the 1940 Act, is at least 200% after the issuance of
the debt or the preferred stock (i.e., such senior securities
may not be in excess of 50% of our net assets). If the value of
our net assets, as defined, were to increase through the
issuance of additional capital stock or otherwise, we would be
permitted under the 1940 Act to issue additional senior
securities. We have no senior securities outstanding and have no
current intention of issuing any senior securities although we
may do so in the future.

We may sell our securities at a price that is
below the net asset value per share only (i) after a
majority of our disinterested directors has determined that such
a sale would be in our best interests and the best interests of
our stockholders, and (ii) upon the approval by the holders
of a majority of our outstanding voting securities, including a
majority of the voting securities held by non-affiliated
persons, of such a policy or practice within one year prior to
such sale. If the offering of the securities is underwritten, a
majority of the disinterested directors must determine in good
faith that the price of the securities being sold is not less
than a price which closely approximates the market value of the
securities, less any distribution discounts or commissions. As
defined in the 1940 Act, the phrase majority of our
outstanding voting securities means the vote of
(i) 67% or more of our common stock present at a meeting,
if the holders of more than 50% of our outstanding common stock
are present or represented by proxy, or (ii) more than 50% of
our outstanding common stock, whichever is less.

Many of our transactions with our affiliates (as
well as affiliates of those affiliates) which were prohibited
without the prior approval of the SEC under the 1940 Act prior
to its amendment by the Incentive Act are now permissible upon
the prior approval of a majority of our disinterested directors
and a majority of the directors having no financial interest in
the transactions. However, certain transactions involving
certain persons with whom we are associated, including our
directors, officers, and employees, may still require the prior
approval of the SEC. In general:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any person who owns, controls or holds power to
	vote more than 5% of our outstanding common stock;                                                                                                                                                                                                                                                                                                                                                   
|
| |  | any director, executive officer or general
	partner of that person; and                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | any person who directly or indirectly controls,
	is controlled by, or is under common control with, that person,
	must obtain the prior approval of a majority of our
	disinterested directors and, in some situations, the prior
	approval of the SEC, before engaging in certain transactions
	involving us or any company under our control. The 1940 Act
	generally does not restrict transactions between a company and
	its portfolio companies.

While a BDC may change the nature of its business
so as to cease being a BDC or, under certain circumstances, to
change its business purpose, it may do so only if authorized by
a majority vote (as defined in the 1940 Act) of its outstanding
voting securities. We are entitled to change our
non-diversification status without stockholder approval. If we
lose our status as a BDC, we would become subject to more
stringent regulation under the 1940 Act to the extent we could
qualify for an exemption from 1940 Act regulation.

Income Tax Matters

For federal and state income tax purposes, we are
taxed at regular corporate rates on ordinary income and
recognize gains on distributions of appreciated property. We are
not entitled to the special tax treatment available to most
regulated investment companies because, among other reasons, we
do not distribute at least 90% of investment company
taxable income as required by the Internal Revenue Code
for such treatment. Distributions of cash or property by us to
our stockholders, if any, will be taxable as dividends only to
the extent that we have current or accumulated earnings and
profits. Distributions in excess of current or accumulated
earnings and profits will be treated first as a return of
capital to the extent of the holders tax basis and then as
gain from the sale or exchange of property. Each investor is
urged to consult with his or her tax advisor concerning the
federal, state and local, and foreign tax consequences of an
investment in our company.

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Competition

Technology transfer is a highly competitive
business. We expect that if our investment model proves to be
successful, our current competitors in the technology transfer
market may duplicate our strategy and new competitors may enter
the market. We compete against other technology transfer
companies, some of which are much larger and have significantly
greater financial resources than we do. In addition, these
companies will be competing with our portfolio companies to
acquire technologies from universities and government research
laboratories. We cannot assure you that we will be able to
successfully compete against these competitors in the
acquisition of technology licenses, funding of technology
development or marketing of portfolio companies.

Risk Factors

Our quarterly and annual results could
fluctuate significantly.

The Companys quarterly and annual operating
results could fluctuate significantly due to a number of
factors. These factors include the small number and range of
values of the transactions that are completed each quarter, the
timing of the recognition of unrealized gains and losses, the
degree to which we encounter competition in our markets, the
volatility of the stock market as it relates to our unrealized
gains and losses, as well as other general economic conditions.
As a result of these factors, quarterly and annual results are
not necessarily indicative of the Companys performance in
future quarters and years.

Our investment model is speculative in nature
and our history of investments using the model is
limited.

Our investment model is highly speculative since
it involves making investments in new development stage
companies and having those companies invest in new, untested
technology. Furthermore, we have only been using our investment
model for a relatively short period of time and have little or
no historical information upon which to judge whether or not the
model is successful. We cannot assure you that our investment
model will be successful or that any of our investments will be
successful.

Our portfolio companies are development stage
companies dependent upon the successful commercialization of new
technologies. Each of our investments in portfolio companies is
subject to a high degree of risk and we may lose all of our
investment in a portfolio company if it is not
successful.

We invest in development stage companies that our
management believes can benefit from our expertise in technology
transfer. Development stage companies are subject to all of the
risks associated with new businesses. In addition, our portfolio
companies are also subject to the risks associated with research
and development of new technologies. These risks include the
risk that new technologies cannot be identified, developed or
commercialized, may not work, or are obsolete. Our portfolio
companies must successfully acquire licenses to new
technologies, and in some cases further develop new
technologies, and then complete a merger transaction for our
investments to be successful. We cannot assure you that any of
our investments in our portfolio companies will be successful.
Our portfolio companies will be competing with larger,
established companies, with greater access to, and resources
for, further development of these new technologies. In addition,
for an investment to be successful, our portfolio companies
often must develop the technology and identify buyers who are
willing to acquire the technology, in exchange for their common
stock or other consideration. We cannot assure you that any of
our portfolio companies will be successful or that we will
successfully sell our portfolio companies or sell or relicense
the technology rights held by our portfolio companies. We may
lose our entire investment in any or all of our portfolio
companies.

Our portfolio companies depend upon the
research and development activities of universities and
laboratories, over which neither our portfolio companies nor we
have any control.

Our portfolio companies depend upon the research
activities of universities and government research facilities.
Neither we, nor our portfolio companies, have any control over
the research activities of universities and research
laboratories. As neither we nor our portfolio companies provide
supervision of any university or laboratory research, we cannot
warrant that the research will be done properly and that the
results which we may license will be reproducible. In addition,
we have no control over what types of research are presented to
us by universities and government research facilities for
evaluation and commercial development. Further, the

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licenses to technologies that our portfolio
companies obtain may be non-exclusive. In the event that we make
an investment in a portfolio company, and we are unable to
locate a new technology to be acquired by the portfolio company,
we could lose our entire investment.


Technologies acquired by our portfolio
companies may become obsolete before we can sell the portfolio
companies.

Neither our portfolio companies nor we have any
control over the pace of technology development. There is a
significant risk that a portfolio company could acquire the
rights to a technology that is currently or is subsequently made
obsolete by other technological developments. We cannot assure
you that any of our portfolio companies will successfully
acquire, develop and transfer any new technology.

The patents on the technologies that our
portfolio companies license may infringe upon the rights of
others and patent applications that universities or laboratories
have filed may not be granted.

Many of our portfolio companies rely upon patents
to protect the technologies that they license. If the patents on
technologies that they license are found to infringe upon the
rights of others, or are held to be invalid, then the licenses
to such technologies will have little or no value to our
portfolio companies. In addition, if a patent licensed by a
portfolio company is found to infringe upon the rights of
others, the portfolio company may be liable for monetary
damages. Our portfolio companies are dependent upon the
universities or government research facilities to file, secure
and protect patents on licensed technologies. In the event that
a patent is challenged or violated, our portfolio companies may
not have the financial resources to defend the patent either in
the preliminary stages of litigation or in court. In addition,
if our portfolio companies acquire licenses to technologies with
patents pending, we cannot assure you that such patents will be
granted.

Technologies that have been developed with
funding from the United States government may have limits on
their use, which could affect the value of the technology to a
portfolio company.

Technologies developed with funds provided by the
United States government have restrictions regarding where they
may be sold and have limits on exclusivity. A portfolio company
that acquires a technology developed with federal funding may be
limited as to where it can sell the technology. The technology
may only be allowed to be sold or manufactured within the United
States. In addition, under Section 23 of the United States
Code, the U.S. government has the right to use technologies that
it has funded regardless of whether the technology has been
licensed to a third party. Such regulations may limit the
marketability of a technology and therefore reduce the value of
the technology to our portfolio companies.

We may need to make additional investments in
our portfolio companies to provide them with capital to further
develop licensed technologies.

We may have to make additional investments in
portfolio companies to protect our initial investments. We
retain the discretion to make any additional investments as our
management determines. The failure to make such additional
investments may jeopardize the continued viability of a
portfolio company and our initial (and subsequent) investments.
Moreover, additional investments may limit the number of
companies in which we can make initial investments. We have no
established criteria in determining whether to make an
additional investment except that our management will exercise
its business judgment and apply criteria similar to those used
when making the initial investment. We cannot assure you that we
will have sufficient funds to make any necessary additional
investments, which could adversely affect our success and result
in the loss of a substantial portion or all of our investment in
a portfolio company.

We may be unable or decide not to make
additional investments in our portfolio companies, which could
result in our losing our initial investment if the portfolio
company fails. Our ownership and control may be diluted if a
portfolio company obtains additional funds from third party
investors.

Our agreement with the underwriters in connection
with our IPO restricts the size of our investment in any single
portfolio company and, as a result, could prohibit an additional
investment in a portfolio company in the event that our initial
investment represented 10% or more of our assets. Even if we are
able to make an additional investment in a portfolio company
within the prescribed limits, we may elect not to make an
additional investment in a portfolio company in order to limit
the size of our investment, which is at risk. It is

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also our policy not to make loans to our
portfolio companies, which in the aggregate exceed 25% of our
net assets. Therefore, if a portfolio company requires
additional funds to continue operating, and we cannot or choose
not to make an additional investment, our investment in the
portfolio company may decline in value. In addition, to the
extent that a portfolio company seeks additional financing from
third parties, our ownership interest and control of the
portfolio company may be diluted.


The securities we hold in our portfolio
companies are illiquid and we may not be able to sell the
portfolio company securities we hold for amounts equal to their
recorded value, if at all.

Our portfolio companies are all private entities
and we acquire securities in our portfolio company in private
transactions. As a result, all of the securities we hold in our
portfolio companies are restricted securities, as defined under
the Securities Act of 1933 (the 1933 Act) and are
subject to restrictions on resale. Furthermore, we do not
anticipate that a public market will exist for any of the
securities we hold in our portfolio companies. Therefore, any
sale or other transfer of the securities we hold in portfolio
companies will be made in private transactions and we cannot
assure you that we will be able to sell our portfolio company
securities for amounts equal to the values that we have ascribed
to them.

We are dependent on merger transactions,
structured as tax-free exchanges to sell our portfolio
companies. A change in the Internal Revenue Code affecting
tax-free exchanges could reduce or eliminate our ability to sell
portfolio companies.

We do not anticipate selling any of our portfolio
companies, except in connection with merger transactions. We
anticipate that most, if not all, of such merger transactions
will be structured as tax-free exchanges under Section 368 of
the Internal Revenue Code. If Section 368 were to be
amended so that we were no longer able to structure our merger
transactions as tax-free exchanges, we may not be able to sell
our portfolio companies on commercially reasonable terms. If we
are unable to successfully sell a portfolio company in a merger
transaction, we may lose our investment.

We have been dependent on a small number of
companies controlled by the same investor group for the purchase
of our portfolio companies. We have only limited experience
selling our portfolio companies and of the fifteen transactions
that we have completed, six have been with companies controlled
by the same group of investors.

At December 31, 2001, we have completed only
fifteen transactions, including fourteen mergers and one stock
sale, wherein we sold portfolio companies to other companies and
six of these sales have been made to companies that are
controlled by the same investor group. As a result, we have only
had the benefit and experience of negotiating such agreements
with a small number of investors. We cannot assure you that we
will be able to successfully negotiate merger transactions for
the sales of our portfolio companies in the future.

The agreements we have with universities do
not guarantee that the universities will grant licenses to our
portfolio companies.

The agreements that we have entered into with
universities provide us with the ability to evaluate the
commercial potential for technologies at an early stage of
development. These agreements however, do not provide us with
any guarantee that following our evaluation, a university will
grant us a license. As a result, we may expend time and
resources evaluating a technology and not be able to secure a
license to such technology for one of our portfolio companies.

We are dependent upon our managements
ability to identify acquirers for our portfolio
companies.

Our investment strategy is based upon selling our
portfolio companies in stock for stock exchanges to companies
that wish to acquire the technologies owned by our portfolio
companies but which themselves may be neither operating nor
established. We do not expect to sell any portfolio company
securities to the public. Therefore, if we fail to identify an
acquirer for a portfolio company, our entire investment in the
portfolio company could be lost.

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We are dependent upon and have little or no
control over the efforts of companies that acquire our portfolio
companies to successfully commercialize the acquired
technologies.

When we sell a portfolio company, we receive
common stock from the acquiring company based upon the mutually
agreed upon values of the portfolio company, its licensed
technology and the acquiring company. We then intend to sell the
securities that we acquire in exchange for our portfolio
companies at some time in the future. Therefore, our ability to
profit from an investment in a portfolio company is ultimately
dependent upon the price we receive for the shares of the
acquiring company. In most cases, the companies that acquire our
portfolio companies will be dependent upon successfully
commercializing the technologies they acquire. We do not have
control over the companies that acquire our portfolio companies
and we do not intend to provide them with managerial assistance.
These operating companies may face intense competition,
including competition from companies with greater financial
resources, more extensive research and development,
manufacturing, marketing and service capabilities and a greater
number of qualified and experienced managerial and technical
personnel. They may face additional risks of product and
technological obsolescence and government regulation over which
we will have little or no control. They may need additional
financing which they are unable to secure and we are unable or
unwilling to provide or they may be subject to adverse
developments unrelated to the technologies they acquire. We
cannot assure you that any of the companies that acquire our
portfolio companies will be successful or that we will be able
to sell the securities we receive at a profit or for sufficient
amounts to even recover our initial investment in the portfolio
company.

The companies that have merged with our
portfolio companies to date are development stage companies and,
as a result, the value of the securities that we receive in such
merger transactions is subject to significant
fluctuations.

Historically we have merged, and we intend to
continue to merge, our portfolio companies with companies in
related fields that are development stage companies. As a
result, the securities that we receive when we merge a portfolio
company are subject to all of the risks associated with
securities of development stage companies. The values of these
securities may be subject to significant fluctuations. We cannot
assure you that when we sell these securities; we will receive
the value ascribed to the securities either at the time of
acquisition or during subsequent valuation periods.

Our investments in our portfolio companies may
be concentrated in one or more industries and if these
industries should decline or fail to develop as expected our
investments will be lost.

Our investments in our portfolio companies may be
concentrated in one or more industries. This concentration will
mean that our investments will be particularly dependent on the
development and performance of those industries. Accordingly,
our investments may not benefit from any advantages, which might
be obtained with greater diversification of the industries in
which our portfolio companies operate. If those industries
should decline or fail to develop as expected, our investments
in our portfolio companies in those industries will be subject
to loss.

We generally receive equity securities of the
companies that acquire our portfolio companies, rather than
cash. We record revenues from these transactions; however, the
securities that we receive will be subject to restrictions on
resale, which will limit our ability to sell these securities
and attain liquidity.

The securities that we receive in exchange for
our portfolio companies will be subject to restrictions on
resale, which will limit our ability to sell these securities.

As of December 31, 2001, all of the
securities we have received in exchange for our portfolio
companies are restricted securities, as such term is
defined under Rule 144. These shares are restricted
securities because they were issued in private transactions not
involving a public offering and may not be sold in the absence
of registration other than in accordance with Rule 144
under the 1933 Act or another exemption from registration. As a
result of such restrictions, our ability to sell or otherwise
transfer the securities will be limited. We cannot assure you
that we will be able to receive upon resale, the recorded value
of our portfolio company securities in merger transactions.

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We may not be able to merge our portfolio
companies with publicly traded entities and may receive
non-publicly traded securities in exchange for our portfolio
companies. We may be required to sell the securities we receive
at a substantial discount to their appraised value if no public
market exists.

As of December 31, 2001, we have completed
fifteen sales of portfolio companies. Of these sales, eight have
been to companies that are currently public, and the remaining
transactions been with non-public companies. We are
substantially dependent upon the ability of non-public acquirers
of our portfolio companies to implement a plan, which would
facilitate a trading market for their securities, or other
strategy, which would allow for the potential sale of our
ownership interest. In addition, to the extent that we own more
than 10% of an acquirers shares, we may be deemed to be an
affiliate of the acquirer which would limit our ability to
dispose of securities we receive for our portfolio companies.
Further, our ability to sell the securities we receive for our
portfolio companies may be limited by, and subject to, the lack
of or limited nature of a trading market for the securities and
the volatility of the stock market as a whole. Such limitations
could prevent or delay any sale of our investments or
significantly reduce the amount of proceeds, if any that might
otherwise be realized there from. The values we place on our
investments may not accurately reflect their future value or the
value that we will receive for them when we sell them.

The values we place on our investments may not
accurately reflect their future value or the value that we will
receive for them when we sell them.

At December 31, 2001 and December 31,
2000, respectively, equity securities amounting to $9,988,772 or
100.8% of net assets and $5,949,582 or 70.4% of net assets, have
been valued at fair value as estimated by our Board of
Directors. As a general matter, restricted securities and
securities without an active trading market are more difficult
to accurately value than unrestricted, actively traded
securities of public companies. Pursuant to the requirements of
the 1940 Act, the Board of Directors is responsible for
determining in good faith the fair value of our securities and
assets for which market quotations are not readily available. In
making its determination, the Board of Directors may consider
valuation appraisals provided by independent financial experts.
See Determination of Net Asset Value and our
financial statements. If we were required to sell any of such
investments, there is no assurance that the fair value, as
determined by the Board of Directors, would be obtained. If we
were unable to obtain fair value for such investments, there
would be an adverse effect on our net asset value and on the
price of our common stock.

Your ownership interest and the value of the
shares of our common stock may be diluted by the exercise of
stock options and warrants we have granted or may grant in the
future.

We have adopted two stock option plans under
which certain of our employees, officers and directors may be
granted options. As of December 31, 2001, we have granted
options to purchase 498,000 shares of our common stock to
certain officers and employees. We have also reserved an
additional 252,000 shares of our common stock for issuance under
our two stock option plans to key employees and directors. In
addition, we have issued warrants to the underwriter, upon
payment of the purchase price of $.0003 per warrant, to purchase
100,000 shares of common stock at an exercise price of $9.90 per
share. The warrants expire on October 25, 2005. The
issuance and sale of these shares of common stock will dilute
the ownership interest of investors and may have an adverse
effect on the price of our common stock.

Our business depends on key
personnel.

We rely, and will continue to be substantially
dependent upon, the continued services of our management,
including our Chief Executive Officer and Chairman of the Board,
Clifford M. Gross, and our President, Uwe Reischl. Our
management team is responsible for the review of potential
investments by and the provision of advice to our portfolio
companies regarding the acquisition of technologies and
additional research and development. We also depend upon our
managements key contacts with universities, to maintain
our access to new technologies, and their relationships with
companies in the private sector in order to effectuate the sale
of our portfolio companies.

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Any transactions we engage in with affiliates
may involve conflicts of interest.

The 1940 Act restricts transactions between the
Company and any of our affiliates, including our officers,
directors or employees and principal stockholders. In many
cases, the 1940 Act prohibits transactions between such persons
and ourselves unless we first apply for and obtain an exemptive
order from the SEC. Delays and costs in obtaining necessary
approvals may decrease or even eliminate any profitability of
such transactions or make it impracticable or impossible to
consummate such transactions. These affiliations could cause
circumstances that would require the SECs approval in
advance of proposed transactions by us in portfolio companies.
Further, depending upon the extent of our managements
influence and control with respect to such portfolio companies,
the selection of the affiliates of management to perform such
services may not be a disinterested decision, and the terms and
conditions for the performance of such services and the amount
and terms of such compensation may not be determined in
arms-length negotiations.

We have a limited amount of funds available
for investment in portfolio companies and as a result, our
investments will lack diversification.

Based on the amount of our existing available
funds, it is unlikely that we will be able to commit our funds
to investments in, and the acquisition of, securities of a large
number of companies. We intend to continue to operate as a
non-diversified investment company within the meaning of the
1940 Act. Prospective investors should understand that our
current investments are not, and in the future may not be,
substantially diversified. We will not be able to achieve the
same level of diversification as larger entities engaged in
similar venture capital activities. Therefore, our assets may be
subject to greater risk of loss than if they were more widely
diversified, because the failure of one or more of our limited
number of investments could have a material adverse effect on
our financial condition and the price of our common stock.

We are subject to substantial government
regulations because of our status as a business development
company.

We have elected to be treated as a BDC under the
Incentive Act, which modified the 1940 Act. Although the
Incentive Act relieves BDCs from compliance with many of the
provisions of the 1940 Act, the Incentive Act imposes on BDCs
greater restrictions on permitted types of investments.
Moreover, the applicable provisions of the 1940 Act impose
numerous restrictions on our activities, including restrictions
on the nature of our investments and transactions with
affiliates. We cannot assure you that this legislation will be
interpreted or administratively implemented in a manner
consistent with our objectives and manner of operations. Upon
approval of a majority of our stockholders, we may elect to
withdraw our status as a BDC. If we elect to withdraw our
election, or if we otherwise fail to qualify as a BDC, we may be
subject to substantially greater regulation under the 1940 Act.
Compliance with such regulations would significantly increase
our costs of doing business.

We have a limited operating history upon which
you can assess our prospects and we are subject to the risks
associated with any new business.

As a result of our short history of operations,
we have only consummated transactions with a very small number
of companies. Therefore, there is little historical information
regarding our operations upon which you can base your investment
decision. In addition, we are subject to all of the business
risks and uncertainties associated with any new business
enterprise. We cannot assure you that our investment objective
will be attained.

Our management has limited experience
operating a technology transfer business, and managing and
operating a business development company.

The members of our management have been engaged
in the operation of our business for a short period of time and
so have limited experience. Some of our directors and executive
officers only have experience in science and research.
Furthermore, we commenced operations as a business development
company in June 2000 and so our directors and executive officers
have only had experience operating a business development
company since June 2000. In addition, some of our management
have had limited experience in the areas of corporate finance
and corporate mergers.

23



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##### 



One of our current stockholders has
significant influence over our management and affairs.

Clifford M. Gross, our Chief Executive Officer
and Chairman of the Board, beneficially owns approximately 50%
of our common stock as of December 31, 2001. Therefore,
Dr. Gross will be able, among other things, to elect
directors, change our investment policies, and withdraw our
election to operate as a BDC.






| |                       
| | ----------------------
| | Item 2.     Properties

Our principal office is located at 202 S. Wheeler
Street, Plant City, Florida. Our lease for approximately 2700
square feet of office space at that location expires in March
2004. We believe our office space is suitable for our needs for
the foreseeable future.

Our UK office is located at Buckland House, Dower
Mews, High Street, Berkhamsted Herts HP4 2BL, UK. Our lease of
office space at that location expires in September 2003. We
believe our office space is suitable for our needs for the
foreseeable future.






| |                               
| | ------------------------------
| | Item 3.     Legal
	Proceedings

The Company is not a party to material legal
proceedings.






| |                                                                 
| | ----------------------------------------------------------------
| | Item 4.     Submission
	of Matters to a Vote of Security Holders

No matters were submitted to a vote of
shareholders during the year ended December 31, 2001.




PART II






| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Item 5.     Market
	for Registrants Common Equity and Related Stockholder
	Matters

Computershare Trust Company Inc., 350 Indiana
Street, Suite 800, Golden, CO 80401; 303-262-0600, serves
as transfer agent for the Companys common stock.
Certificates to be forwarded should be mailed directly to the
transfer agent, preferably by registered mail.

The Companys shares of common stock began
to trade on the Nasdaq SmallCap Market on October 25, 2000,
under the symbol UTOB. The Company had approximately
400 shareholders at December 31, 2001 and 500 shareholders
at December 31, 2000. The net asset value per share of the
Companys common stock at December 31, 2001 was $2.53.
The following table reflects the high and low closing prices by
quarter for the Companys common stock on the Nasdaq
SmallCap Market for 2001 and 2000.

|                 |                                       |      |   |      |  |  |   |      | 
|---------------- | ------------------------------------- | ---- | - | ---- |  |  | - | ---- | 
|                 |                                       | High |   | Low 
|                 |                                       |      |   |     
|Fiscal year 2000 |                                       |      |   |      |  |  |   |     
|                 | October 25, 2000 
	December 31, 2000 |      | $ | 6.31 |  |  | $ | 5.56 | 
|Fiscal year 2001 |                                       |      |   |      |  |  |   |     
|                 | January 1, 2001  March 31,
	2001     |      | $ | 7.50 |  |  | $ | 5.75 | 
|                 | April 1, 2001  June 30, 2001         |      | $ | 8.05 |  |  | $ | 7.00 | 
|                 | July 1, 2001  September 30,
	2001    |      | $ | 8.45 |  |  | $ | 7.40 | 
|                 | October 1, 2001 
	December 31, 2001  |      | $ | 7.55 |  |  | $ | 7.00 | 

For the fiscal years ended December 31, 2001
and 2000, the Company did not declare or pay dividends.

On March 25, 2002, our shares of common
stock commenced trading on the American Stock Exchange (AMEX)
under the symbol UTK. In conjunction with our move
to AMEX, our common stock no longer trades on the Nasdaq Small
Cap Market.

During 2001, we issued 133,446 shares of our
common stock pursuant to an exemption from the registration
requirements of the 1933 Act under section 4(2) of the 1933 Act
as a transaction by an issuer not involving a public offering

24



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##### 



We have never declared or paid any dividends to
the holders of our common stock and we do not anticipate paying
dividends in the foreseeable future. We currently intend to
retain all earnings for use in connection with the expansion of
our business and for general corporate purposes. Our Board of
Directors will have sole discretion in determining whether to
declare and pay dividends in the future. The declaration of
dividends will depend on our profitability, financial condition,
cash requirements, future prospects and other factors deemed
relevant by our Board of Directors. Our ability to pay dividends
in the future could be limited or prohibited by regulatory
requirements and the terms of financing agreements that we may
enter into or by the terms of any preferred stock that we may
authorize and issue.




Item 6.     Selected
Financial Data

The following table presents our summary
consolidated financial and other data and has been derived from
our audited financial statements for the years ended
December 31, 2001, 2000, 1999, 1998, and 1997. The
information below should be read in conjunction with
Managements Discussion and Analysis of Financial
Condition and Results of Operations and our consolidated
financial statements and the notes thereto, each of which is
included in another section of this report.

|                                                                  |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |           |  
|----------------------------------------------------------------- | ------- | ----------------------- | --------- | --------- |  | ---- | --------- | --------- |  | ---- | --------- | --------- |  | - | ------- | --------- |  | - | ------ | --------- | -
|                                                                  |         |                        
|                                                                  |         | Year Ended December 31,
|                                                                  |         |                        
|                                                                  |         | 2001                    |           | 2000      |  | 1999 |           | 1998      |  | 1997
|                                                                  |         |                         |           |           |  |      |           |           |  |     
|Consolidated Statement of Operations
	Data:                       |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |          
|Income from operations                                            |         | $                       | 4,075,248 |           |  | $    | 4,576,814 |           |  | $    | 1,315,373 |           |  | $ | 381,843 |           |  | $ |       |          
|Expenses                                                          |         |                         | 2,611,970 |           |  |      | 1,883,868 |           |  |      | 728,322   |           |  |   | 213,437 |           |  |   | 5,115  |          
|                                                                  |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |          
|Income (loss) before income taxes                                 |         |                         | 1,463,278 |           |  |      | 2,692,946 |           |  |      | 587,051   |           |  |   | 168,406 |           |  |   | (5,115 | )        
|Provision for income taxes                                        |         |                         | 555,298   |           |  |      | 1,018,334 |           |  |      | 301,190   |           |  |   | 62,450  |           |  |   |       |          
|                                                                  |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |          
|Net income (loss) from operations                                 |         |                         | 907,980   |           |  |      | 1,674,612 |           |  |      | 285,861   |           |  |   | 105,956 |           |  |   | (5,115 | )        
|Net realized and unrealized gains (losses)                        |         |                         | (263,697  | )         |  |      | (551,912  | )         |  |      | 122,919   |           |  |   | 611,000 |           |  |   |       |          
|                                                                  |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |          
|Net increase (decrease) in net assets from
	operations            |         | $                       | 644,283   |           |  | $    | 1,122,700 |           |  | $    | 408,780   |           |  | $ | 716,956 |           |  | $ | (5,115 | )        
|                                                                  |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |          
|Net increase (decrease) in net assets from
	operations per share: |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |          
|                                                                  | Basic   |                         | $         | .17       |  |      | $         | .38       |  |      | $         | .15       |  |   | $       | .31       |  |   | $      | (.00      | )
|                                                                  | Diluted |                         | $         | .17       |  |      | $         | .38       |  |      | $         | .15       |  |   | $       | .31       |  |   | $      | (.00      | )
|Weighted average shares:                                          |         |                         |           |           |  |      |           |           |  |      |           |           |  |   |         |           |  |   |        |          
|                                                                  | Basic   |                         |           | 3,840,714 |  |      |           | 2,968,018 |  |      |           | 2,682,420 |  |   |         | 2,304,691 |  |   |        | 2,070,494 |  
|                                                                  | Diluted |                         |           | 3,882,914 |  |      |           | 2,968,720 |  |      |           | 2,682,420 |  |   |         | 2,304,691 |  |   |        | 2,070,494 |  

|                          |  |              |            |      |  |      |            |      |  |      |           |  |  |   |           |  |  |   |        | 
|------------------------- |  | ------------ | ---------- | ---- |  | ---- | ---------- | ---- |  | ---- | --------- |  |  | - | --------- |  |  | - | ------ | 
|                          |  |             
|                          |  | December 31,
|                          |  |             
|                          |  | 2001         |            | 2000 |  | 1999 |            | 1998 |  | 1997
|                          |  |              |            |      |  |      |            |      |  |     
|Balance Sheet Data:       |  |              |            |      |  |      |            |      |  |      |           |  |  |   |           |  |  |   |        | 
|Investments at fair value |  | $            | 9,988,772  |      |  | $    | 5,949,582  |      |  | $    | 2,594,931 |  |  | $ | 1,300,000 |  |  | $ |       | 
|Cash and cash equivalents |  |              | 1,432,473  |      |  |      | 3,952,280  |      |  |      | 1,007,229 |  |  |   | 418,178   |  |  |   | 139    | 
|Total assets              |  |              | 12,410,958 |      |  |      | 10,088,666 |      |  |      | 4,205,345 |  |  |   | 1,805,795 |  |  |   | 31,708 | 
|Total liabilities         |  |              | 2,501,518  |      |  |      | 1,633,664  |      |  |      | 920,892   |  |  |   | 440,148   |  |  |   |       | 
|Net assets                |  |              | 9,909,440  |      |  |      | 8,455,002  |      |  |      | 3,284,453 |  |  |   | 1,365,647 |  |  |   | 31,708 | 




Item 7.     Managements
Discussion and Analysis of Financial Condition and Results of
Operations

The following discussion should be read in
conjunction with our financial statements and the notes thereto
included elsewhere in this Form 10-K. This Form 10-K
contains forward-looking statements regarding the plans and
objectives of management for future operations. This information
may involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or
achievements to be materially different from future results,
performance or achievements expressed or implied

25



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##### 



by any forward-looking statements.
Forward-looking statements, which involve assumptions and
describe our future plans, strategies and expectations, are
generally identifiable by use of the words may,
will, should, expect,
anticipate, estimate,
believe, intend or project
or the negative of these words or other variations on these
words or comparable terminology. These forward-looking
statements are based on assumptions that may be incorrect, and
we cannot assure you that these projections included in these
forward-looking statements will come to pass. Our actual results
could differ materially from those expressed or implied by the
forward-looking statements as a result of various factors.


Critical Accounting Policies and
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 amounts reported in the financial
statements. On a regular basis, management reviews these
estimates and assumptions including those related to revenue
recognition and the valuation of investments.

Management believes the following critical
accounting policies, among others, affect it more significant
judgments and estimates used in the preparation of its
consolidated financial statements.

Revenue
Recognition

Effective January 1, 2000, the Company
adopted the provisions of SEC Staff Accounting
Bulletin 101, Revenue Recognition in Financial
Statements(SAB 101). SAB 101 provides
guidance on the recognition, presentation and disclosures of
revenue in financial statements. The adoption of SAB 101
had no material impact on the Companys financial
statements.

The Company recognizes revenue from the sale of
technology rights upon the exchange of the shares of portfolio
companies with unrelated merger partners. The Company records
revenue based on the value of the consideration received. In
most cases, the consideration received for the rights is the
common stock of the purchaser. The common stock received is
recorded as an investment at value. Revenue derived from
consulting services is recognized as earned, over the life of
the underlying consulting agreements. In some cases, the Company
is paid a fee for negotiating a successful technology transfer.
In these instances, revenue is recognized upon consummation of
the transaction.

Revenue from strategic alliance agreements is
deferred and recognized over the term of each agreement,
typically twelve months. These agreements are cancelable at any
time.

Valuation of
Investments:

The income that we derive from our investments in
our portfolio companies consists of both cash and equity
securities that we receive upon disposition of our portfolio
companies. The value of the equities that we receive makes up
most of our revenues. Pursuant to the requirements of the 1940
Act, our Board of Directors is responsible for determining in
good faith the fair value of our securities and assets for which
market quotations are not readily available. In making its
determination, the Board of Directors may consider valuation
appraisals provided by independent financial experts. With
respect to private equity securities, each investment is valued
using industry valuation benchmarks, and then the value is
assigned a discount reflecting the illiquid nature of the
investment as well as our minority, non-control position. When
an external event such as a purchase transaction, public
offering, or subsequent equity sale occurs, the pricing
indicated by the external event is used to corroborate our
private equity valuation. Equity securities in public companies
that carry certain restrictions on sale are generally valued at
a discount from the public market value of the securities.

The Board of Directors bases its determination of
fair value upon, among other things, applicable quantitative and
qualitative factors. These factors may include, but are not
limited to, type of securities, nature of business,
marketability, market price of unrestricted securities of the
same issue (if any), comparative valuation of securities of
publicly-traded companies in the same or similar industries,
current financial conditions and operating results, sales and
earnings growth, operating revenues, competitive conditions and
current and prospective conditions in the overall stock market.

26



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##### 



Without a readily ascertainable market value, the
estimated value of our portfolio of equity securities may differ
significantly from the values that would be placed on the
portfolio if there existed a ready market for such equity
securities. Any changes in estimated value are recorded in the
Companys Statements of Operations as Net realized
and unrealized gains (losses) during the period of change.

We have retained Bolten Financial Consulting,
Inc., to provide us with valuations of the securities we receive
in exchange for portfolio companies, updated to each quarterly
valuation date.

Without a readily ascertainable market value, the
estimated value of our portfolio of equity securities may differ
significantly from the values that would be placed on the
portfolio if there existed a ready market for such equity
securities. Any changes in estimated value are recorded in the
Companys Statements of Operations as Net realized
and unrealized gains (losses) during the period of change.

We have retained Bolten Financial Consulting,
Inc., to provide us with valuations of the securities we receive
in exchange for portfolio companies, updated to each quarterly
valuation date.

General

Our primary business is to make investments in
companies that possess or will likely identify emerging and
established technologies and markets for those technologies. Our
primary investment objective is to increase our net assets by
exchanging stock in our portfolio companies for cash and other
assets we will use to acquire licenses to additional
technologies. We believe that we will be able to achieve our
objectives by concentrating on investments in companies which we
believe are likely to benefit from our managements
expertise in technology transfer.

The income that we derive from our investments in
our portfolio companies consists of both cash and equity
securities that we receive upon disposition of our portfolio
companies. The value of the equities that we receive makes up
most of our revenues. Pursuant to the requirements of the 1940
Act, our Board of Directors is responsible for determining in
good faith the fair value of our securities and assets for which
market quotations are not readily available. In making its
determination, the Board of Directors may consider valuation
appraisals provided by independent financial experts. With
respect to private equity securities, each investment is valued
using industry valuation benchmarks, and then the value is
assigned a discount reflecting the illiquid nature of the
investment as well as our minority, non-control position. When
an external event such as a purchase transaction, public
offering, or subsequent equity sale occurs, the pricing
indicated by the external event is used to corroborate our
private equity valuation. Equity securities in public companies
that carry certain restrictions on sale are generally valued at
a discount from the public market value of the securities.

The Board of Directors bases its determination
upon, among other things, applicable quantitative and
qualitative factors. These factors may include, but are not
limited to, type of securities, nature of business,
marketability, market price of unrestricted securities of the
same issue (if any), comparative valuation of securities of
publicly-traded companies in the same or similar industries,
current financial conditions and operating results, sales and
earnings growth, operating revenues, competitive conditions and
current and prospective conditions in the overall stock market.

Without a readily ascertainable market value, the
estimated value of our portfolio of equity securities may differ
significantly from the values that would be placed on the
portfolio if there existed a ready market for such equity
securities. Any changes in estimated value are recorded in the
Companys Statements of Operations as Net realized
and unrealized gains (losses) during the period of change.

We have retained Bolten Financial Consulting,
Inc., to provide us with valuations of the securities we receive
in exchange for portfolio companies, updated to each quarterly
valuation date. We pay Bolten Financial Consulting, Inc. a fee
each time it values our investments. In 2001, we paid Bolten
Financial Consulting, Inc. a total of $53,921 for its valuation
services.

Our expenses include salaries and wages,
professional fees, sales and marketing costs as well as general
and administrative costs. Sales and marketing costs include
license and sponsored research fees, as well as advertising,
commissions, salaries, travel and other expenses that vary with
revenues. General and administrative costs include rent,
depreciation, office, investor relations and other overhead
costs.

27



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##### 



We used an equity-based method of compensating
certain outside service providers during 1998 and 1999. Those
costs are reflected in the general and administrative costs of
the statement of operations. Some service agreements were for
periods in excess of one year and any remaining value was
recorded as a prepaid expense for the period.

On October 25, 2000, the Company completed
its IPO of 1,000,000 shares of its common stock at $6.00 per
share to raise additional equity to support its growth strategy.
The net proceeds of the offering were $4,047,849.

Financial Condition

The Companys total assets were $12,410,958
and its net assets were $9,909,440 at December 31, 2001,
compared to $10,088,666 and $8,455,002 at December 31, 2000
respectively.

Net asset value per share (NAV) was
$2.53 at December 31, 2001, compared to $2.24 at
December 31, 2000. Net assets increased by $1,454,438 in
2001 and by $5,170,549 in 2000.

Among the significant changes that affected total
assets, net assets and NAV during 2001 were:



| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | Four technology transfers valued at $3,419,653;                         
|
| |  | Private placement of common stock for net
	proceeds of $375,617;        
|
| |  | Four strategic alliance agreements with earned
	revenue of $534,782; and
|
| |  | Acquisition of PAX Technology Transfer Ltd.
	valued at $440,000.        

The Companys common shares outstanding as
of December 31, 2001 were 3,915,672, compared to 3,782,226
at December 31, 2000. The Companys outstanding shares
were increased as a result of the issuance of shares in a
private placement and in connection with the acquisition of PAX
Technology Transfer, Ltd.

The Companys financial condition is
dependent on a number of factors including the ability to
effectuate technology transfers and the performance of the
equity securities that we receive for these transfers. The
Company has invested a substantial portion of its assets in
private development stage or start-up companies. These private
businesses are thinly capitalized, unproven, small companies
that lack management depth, are dependent on new, commercially
unproven technologies and have no history of operations. At
December 31, 2001, $4,932,861 or 40% of the Companys
total assets consisted of investments at fair value in publicly
traded securities, of which net unrealized depreciation, after
income tax effect, was $(18,827); the remaining $5,055,911 or
41% of the Companys total assets consisted of non-publicly
traded securities at fair value of which net unrealized
appreciation, after income tax effect, was $644,294. See Note 2
to the Consolidated Financial Statements under Item 8.

At December 31, 2000, $3,438,602 or 34% of
the Companys total assets consisted of investments at fair
value in publicly traded securities, of which net unrealized
appreciation, after income tax effect, was $(217,845); the
remaining $2,510,980 or 25% of the Companys total assets
consisted of investments at fair value in private businesses, of
which net unrealized appreciation, after income tax effect, was
$376,137. The increase in the value of publicly traded
securities from $3,438,602 in 2000 to $4,932,861 in 2001 is
primarily owing to the two technology transfer transactions with
Advanced Recycling Sciences, Inc., and Sense Holdings, Inc.
originally valued at $1,927,153. Additionally, Centrex, Inc.
became a publicly traded company during 2001.

A summary of the Companys investment
portfolio is as follows:

|                                                           |  |                         |            |      |  |   |           | 
|---------------------------------------------------------- |  | ----------------------- | ---------- | ---- |  | - | --------- | 
|                                                           |  |                        
|                                                           |  | Year Ended December 31,
|                                                           |  |                        
|                                                           |  | 2001                    |            | 2000
|                                                           |  |                         |            |     
|Investments, at cost                                       |  | $                       | 10,018,958 |      |  | $ | 5,695,788 | 
|Unrealized appreciation (depreciation), before
	income tax |  |                         | (30,186    | )    |  |   | 253,794   | 
|                                                           |  |                         |            |      |  |   |           | 
|Investments, at fair value                                 |  | $                       | 9,988,772  |      |  | $ | 5,949,582 | 
|                                                           |  |                         |            |      |  |   |           | 

Following an initial investment in a portfolio
company, the Company may make additional investments in such
portfolio company or subsequent acquirer in order to:
(1) increase its ownership percentage; (2) exercise

28



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##### 



warrants or options that were acquired in a prior
financing; (3) preserve the Companys proportionate
ownership in a subsequent financing; (4) transfer
additional technologies to enhance the portfolio companys
intellectual capital or (5) attempt to preserve or enhance
the value of the Companys investment. Such additional
investments are referred to as follow-on
investments. There can be no assurance that the Company will
make follow-on investments or have sufficient funds to make
additional investments. The failure to make such follow-on
investments could jeopardize the viability of the portfolio
company and the Companys investment or could result in a
missed opportunity for the Company to participate to a greater
extent in a portfolio companys successful operations. The
Company attempts to maintain adequate liquid capital to make
follow-on investments in its private portfolio companies.
However there can be no assurance that the Company will have
liquid capital. The Company may elect not to make a follow-on
investment either because it does not want to increase its
concentration of risk, because it prefers other opportunities,
or because it is inhibited by compliance with BDC requirements,
even though the follow-on investment opportunity appears
attractive.


The following table is a summary of the
Companys capital investments made in its portfolio
companies during the year ended December 31, 2001:

|                                                 |       |        |         |         | 
|------------------------------------------------ | ----- | ------ | ------- | ------- | 
|Capital Investments Made in Portfolio Companies: |       | Amount
|                                                 |       |       
|Ocular Technologies, Inc.                        |       | $      | 150     |        
|UTEK Real Estate Holdings, Inc.                  |       |        | 150     |        
|Watermark Technologies, Inc.(2)                  |       |        | 156,859 |        
|Fiber Gel Technologies, Inc.                     |       |        | 150     |        
|Advanced Microsphere Technology, Inc.(4)         |       |        | 22,150  |        
|Technology Development, Inc.(1)                  |       |        | 198,582 |        
|Micro Sensor Technologies, Inc.(3)               |       |        | 224,155 |        
|Advanced Sensor Technologies, Inc.               |       |        | 752     |        
|                                                 |       |        |         |        
|                                                 | Total |        | $       | 602,948 | 
|                                                 |       |        |         |        






|    |                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------
|(1) | Technology Development merged with Advanced
	Recycling Sciences, Inc. on February 19, 2001.               
|(2) | Watermark Technologies, Inc. merged with
	Bitzmart, Inc. on April 20, 2001.                               
|(3) | Micro Sensor Technologies, Inc. merged with Sense
	Holdings, Inc. on May 31, 2001.                        
|(4) | Advanced Microsphere Technology, Inc. merged with
	Prime Pharmaceutical Corporation on September 26, 2001.

Of the total capital invested in our subsidiaries
during the year ended December 31, 2001, $356,000 was
expended on research and development costs, $141,000 on license
and consulting fees, both of which are reflected in the
Consolidated Statement of Operations in sales and marketing
expenses.

Results of Operations

The Company accounts for its operations under
generally accepted accounting principles for investment
companies. On this basis, the principal measure of a
Companys financial performance is the Net increase
in net assets from operations which is the sum of three
elements. The first element is Net income from
operations, which is the difference between the
Companys income from technology transfers, consulting
fees, interest, dividends, fees and other income and its
operating expenses, net of applicable income tax provision. The
second element is Net realized gain (loss) on
investments, which is the difference between the proceeds
received from dispositions of portfolio securities and their
stated cost, net of applicable income tax provision. The third
element, Increase (decrease) in unrealized
appreciation on investments, is the net change in the fair
value of the Companys investment portfolio, net of
increase (decrease) in deferred income taxes that would
become payable if the unrealized appreciation were realized
through the sale or other disposition of the investment
portfolio.

Year Ended
December 31, 2001 Compared To The Year Ended
December 31, 2000

Income from
operations.Income from operations
decreased 11% to $4,075,248 for the twelve months ended
December 31, 2001 from $4,576,814 for the twelve months
ended December 31, 2000. The decrease in income from
operations resulted from completing four tax-free mergers in
2001 as compared to four tax-free mergers and a sale in 2000,
offset by an increase in consulting fees of $534,782 related to
strategic alliance

29



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##### 



agreements. As described below, we completed four
tax free mergers in 2001 in which we received securities valued
at $3,419,653, compared to four tax free mergers and a sale in
2000 valued at $4,501,584.


In 2001, we completed the following transactions:



| |   |                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Advanced Recycling Sciences,
	Inc.We received an additional
	1,466,153 shares of common stock of Advanced Recycling Sciences,
	Inc. that were valued at the time of sale at $1.00 per share in
	connection with a technology transfer.
|
| |  | Bitzmart, Inc.We
	received 450,000 shares of common stock of Bitzmart, Inc. that
	were valued at the time of sale at $2.31 per share in connection
	with a technology transfer.                                                       
|
| |  | Sense Holdings, Inc.We received an additional 1,850,000 shares of common stock of
	Sense Holdings, Inc. that were valued at the time of sale at
	$.26 per share in connection with a technology transfer.                             
|
| |  | Prime Pharmaceutical
	Corporation.We received 560,000
	shares of common stock of Prime Pharmaceutical Corporation that
	were valued at the time of the sale at $.60 per share in
	connection with a technology transfer.              

Consulting fees increased to $534,782 in the year
ended December 31, 2001 from $-0- in the year ended
December 31, 2000. The fees were paid in the form of
unregistered shares of common stock in our client. The increase
was a direct result of the implementation of the strategic
alliance initiative, which began in 2001. To facilitate
establishing on-going consulting engagements with its clients,
the Company has developed a strategic alliance process.
UTEKs strategic alliances are designed to help technology
companies rapidly enhance their new product pipeline through the
acquisition of proprietary intellectual capital from
universities and federal laboratories.

Expenses.Total
operating expenses for the twelve months ended December 31, 2001
were $2,611,970 consisting of salaries and wages of $616,796,
professional fees of $372,029, sales and marketing expenses of
$904,141, and general and administrative expenses of $719,004.
These expenses compared to the $1,883,868 reported for the
twelve months ended December 31, 2000, consisting of
salaries and wages of $376,053, professional fees of $309,619,
sales and marketing expenses of $780,670, and general and
administrative expenses of $417,516. The 39% increase in total
operating expenses was due to additional expenses incurred in
operating as a public company for a full year in 2001 as
compared to less than three months in 2000,the increased
number of employees and outside services used to grow the
business and our ongoing effort to develop the UTEK U2B®
brand. The 16% increase in sales and marketing expenses was
largely due to increased efforts to reach a broader market for
technology transfers, the cost of additional sales staff, as
well as additional research and development programs funded to
consummate those transfers. The 64% increase in salaries and
wages reflects increased salary costs from the addition of a
full-time CFO, an additional part-time employee, as well as a
bonus for our CEO. The 20% increase in professional fees is
largely due to the cost associated with operating as a public
company, reporting requirements of a public company, preparing
the corporate and subsidiary tax returns, as well as additional
attorneys fees for work related to intellectual property
and complying with BDC regulatory requirements. The 72% increase
in general and administrative costs is largely due to the
increased services required and expenses related to the
requirements of being a public company such as investor
relations costs, printing and mailing costs, and other related
costs.

Net Realized and Unrealized Gains (Losses) and
Income Taxes.Net realized losses on
investments amounted to $86,578 for the twelve months ended
December 31, 2001 and were substantially related to sales
of 924,973 shares of Lexon, Inc. common stock for $162,480 and
51,000 shares of Advanced Recycling Sciences, Inc. for $33,135
during the reporting period. The Company also sold various other
short-term investments with net proceeds of $524,728 resulting
in a realized gain of $2,873. Net realized gains on investments
amounted to $23,715 for the twelve months ended
December 31, 2000 and were substantially related to sales
of 75,027 shares of Lexon, Inc. common stock for $62,037 in cash
during the reporting period.

The net unrealized appreciation
(depreciation) of investments, net of taxes, increased by
$177,119 for the twelve months ended December 31, 2001, a
69% decrease from the decrease in unrealized appreciation of
$575,627 for the twelve months ended December 31, 2000. The
net unrealized losses consisted of fluctuations

30



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##### 



in fair value resulting from the Board of
Directors valuation of the Companys assets for the
twelve months ended December 31, 2001. There were declines
in value related to our investments in Lexon, Inc., Nubar, Inc.,
NuElectric Corporation, Rosbon, Inc., Torvec, Inc. and Prime
Pharmaceutical Corporation, Inc. However the decline in value
was offset by an increase in value in our investments in Image
Analysis, Inc., Centrex, Inc., Advanced Recycling Sciences,
Inc., Bitzmart, Inc. and Sense Holdings, Inc. Centrex, Inc.
became a publicly traded company with a value increase of
$1,552,320 for the year ended December 31, 2001.


The Companys net realized and unrealized
gains (losses) can vary substantially, due to a variety of
factors, therefore, current results may or may not be indicative
of the Companys future performance.

Our effective tax rate was a provision of 37.9%
and 37.8% for the twelve months ended December 31, 2001 and
December 31, 2000, respectively.

Year
Ended December 31, 2000 Compared To The Year Ended
December 31, 1999.

Income from
operations.Income from operations
increased 248% to $4,576,814 for the twelve months ended
December 31, 2000 from $1,315,373 for the twelve months
ended December 31, 1999. The increase in income from
operations resulted from completing five technology transfers.
As described below, in the twelve months ended December 31,
2000, we sold one portfolio company for $200,000 and completed
four tax free mergers in which we received securities valued at
$4,301,584, compared to five tax free mergers valued at
$1,098,212 for the twelve months ended December 31, 1999.
Our Board of Directors determines the fair value of the shares
we receive in the absence of readily ascertainable market
values. In making its determination, the Board of Directors may
consider valuation appraisals provided by independent financial
experts. In our transactions with:



| |   |                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Graphco Technologies, Inc.We received 100,799 shares of common
	stock of Graphco Technologies, Inc. that were valued at the time
	of sale at $9.45 per share in connection with a technology
	transfer.                          
|
| |  | Lexon, Inc.We sold
	one of our portfolio companies for $200,000. Under the terms of
	the agreement, we received $50,000 on the date of the
	transaction and a $150,000 promissory note in connection with a
	technology transfer.
|
| |  | The Quantum Group, Inc.We received 931,000 shares of common
	stock of The Quantum Group, Inc. that were valued at the time of
	sale at $.81 per share in connection with a technology transfer.                                  
|
| |  | NuElectric Corporation.We received an additional 546,000
	shares of common stock of NuElectric Corporation that were
	valued at the time of sale at $.82 per share in connection with
	a technology transfer.                    
|
| |  | Torvec, Inc.We
	received 1,068,354 shares of common stock of Torvec, Inc. that
	were valued at the time of the sale at $2.01 per share in
	connection with a technology transfer.                                                

Consulting fees decreased to $-0- from $165,000
as of the years ended December 31, 2000 and 1999,
respectively. The decrease is the result of the Company not
engaging in any consulting service agreements during 2000.

Expenses.Total
operating expenses for the twelve months ended December 31, 2000
were $1,883,868 consisting of salaries and wages of $376,053,
professional fees of $309,619, sales and marketing expenses of
$780,670, and general and administrative expenses of $417,526.
These expenses compared to the $728,322 reported for the twelve
months ended December 31,1999, consisting of salaries and
wages of $197,125, professional fees of $184,697, sales and
marketing expenses of $79,544, and general and administrative
expenses of $266,956. The 159% increase in total operating
expenses was due to additional expenses incurred in operating as
a public company, the increased number of employees and outside
services used to grow the business and our ongoing effort to
develop the UTEK U2B(SM) brand. The 881% increase in sales and
marketing expenses was largely due to increased efforts to reach
a broader market for technology transfers and the cost of
research and development programs funded to consummate those
transfers. The 91% increase in salaries and wages reflects
increased salary costs from the addition of two full-time
Managers of Technology Alliances, an additional full-time
Executive Assistant, as well as a full year of our
Presidents salary. The 68%

31



---



##### 



increase in professional fees is largely due to
the cost associated with operating as a public company,
reporting requirements of a public company, preparing the
corporate and subsidiary tax returns, as well as additional
attorneys fees for work related to intellectual property
and complying with BDC regulatory requirements. The 56% increase
in general and administrative costs is largely due to the
increased services required and expenses related to the
requirements of being a public company such as investor
relations costs, printing and mailing costs, and other related
costs.


Net Realized and Unrealized Gains and Income
Taxes.Net realized gains on
investments amounted to $23,715 for the twelve months ended
December 31, 2000 and were generated from the sale of
75,027 shares of Lexon, Inc. common stock for $62,037 in cash.
There were no realized gains (losses) for the twelve months
ended December 31, 1999.

The net unrealized appreciation of investments
decreased by $575,627 for the twelve months ended
December 31, 2000, a 568% decrease from the increase in
unrealized appreciation of $122,919 for the twelve months ended
December 31, 1999. The net unrealized losses consisted of
declines in fair value resulting from the Board of
Directors valuation of the Companys assets for the
twelve months ended December 31, 2000 related to our
investments in Lexon, Inc., NuElectric Corporation., The Quantum
Group, Inc., Centrex, Inc. and Nubar, Inc. Our investments in
Lexon, Inc., NuElectric Corporation. and The Quantum Group,
Inc., all publicly traded securities, lost value due to the
existing volatile market. Torvec, Inc., however, offset some of
the decline with an increase in value in the last quarter of
2000. Most of the decline in value occurred in the last two
quarters, as the overall market started to decline. Centrex,
Inc. and Nubar, Inc. are private companies whose net worth
warranted a reduction in the Companys carrying value.

The Companys net realized and unrealized
gains can vary substantially, due to a variety of factors,
therefore, current results may or may not be indicative of the
Companys future performance.

Our effective tax rate was a provision of 37.8%
for the twelve months ended December 31, 2000 compared with
a provision of 51.3% for the twelve months ended
December 31, 1999. Prior to October 16, 1999, the
Companys business was structured as a limited liability
company (LLC). The LLC elected to be treated as a
partnership under the provisions of Subchapter K of the Internal
Revenue Code. Under those provisions, the LLC did not pay
corporate income taxes on its taxable income. Instead, the
owners of the LLC were individually liable for income taxes on
the LLCs taxable income. As of October 16, 1999, the
Company is taxable as a C corporation. Therefore the
provision for income taxes for the twelve months ended
December 31, 2000 is not comparable to the provision for
income taxes for the twelve months ended December 31, 1999.

Liquidity and Capital Resources

Net assets increased 17% to $9,909,440 at
December 31, 2001 from $8,455,002 at December 31,
2000, attributable to income from operations, realized losses,
the unrealized depreciation of non-controlled affiliate
investments, the completion of a private placement, and the
acquisition of PAX Technology Transfer, Ltd.

Our primary source of liquidity and capital
through December 31, 2001 was from the issuance of common
stock rather than income from operations. Our income from
operations consists primarily of the sale of technology rights
for equity securities rather than cash. Since inception, we have
completed four private placement transactions resulting in
proceeds of $375,617 in 2001, $1,305,807 in 1999 and $530,453 in
1998. We also received $162,480 in cash in 2001 for sales of our
investments in non-controlled affiliates. In 2000, we completed
the Companys IPO with net proceeds of $4,047,849.

On December 31, 2001 we had $1,432,473 in
cash and cash equivalents. We anticipate needing to raise
additional equity to fund our operations and anticipated growth
in our investment portfolio.

On September 10, 2001, the Company secured a
$500,000 revolving line of credit with a local financial
institution. Advances under the line of credit bear interest at
the financial institutions prime rate less .25%. The line
of credit is due on demand and is secured by a pledge of a
portion of our investments in non-controlled affiliates. At
December 31, 2001, we had no borrowings outstanding under
the line of credit. The balance due was $-0-.

32



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##### 



Impact of New Accounting Standards

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets
(SFAS 142). SFAS 142 revises the standards
of accounting for goodwill and indefinite-lived intangible
assets. SFAS 142 prohibits the amortization of goodwill and
intangible assets with indefinite useful lives and requires that
these assets be reviewed for impairment at least annually, or
more frequently if impairment indicators arise. Intangible
assets with finite lives will continue to be amortized over
their estimated useful lives. The non-amortization provisions of
SFAS 142 apply to goodwill and indefinite lived intangible
assets acquired in a business combination after June 30,
2001. As a result, the goodwill recorded in connection with the
Companys acquisition of Pax Technology Transfer Ltd. will
not be amortized. See Note 8 to the Consolidated Financial
Statements under Item 8. The Company will apply the
remaining provisions of SFAS 142 in the first quarter of
2002 and does not anticipate that application of those
provisions will have a material impact on the Companys
financial position or its results of operations.






| |                                                                         
| | ------------------------------------------------------------------------
| | Item
	7A.     Quantitative and Qualitative
	Disclosure About Market Risk

The Companys business activities contain
elements of risk. The Company considers a principal type of
market risk to be valuation risk. Investments are stated at
fair value as defined in the 1940 Act and in the
applicable regulations of the SEC. All assets are valued at fair
value as determined in good faith by, or under the direction of,
the Board of Directors. See Investments in the notes
to Consolidated Financial Statements.

Neither the Companys investments nor an
investment in the Company is intended to constitute a balanced
investment program. The Company has exposure to public-market
price fluctuations to the extent of its publicly traded
portfolio.

The Company has invested a substantial portion of
its assets in private development stage or start-up companies.
These private businesses tend to be thinly capitalized,
unproven, small companies that lack management depth and have
not attained profitability or have no history of operations.
Because of the speculative nature and the lack of public market
for these investments, there is significantly greater risk of
loss than is the case with traditional investment securities.
The Company expects that some of its investments will be a
complete loss or will be unprofitable and that some will appear
to be likely to become successful but never realize their
potential.

Because there is typically no public market for
the equity interests of the small companies in which the Company
invests, the valuation of the equity interests in the
Companys portfolio is subject to the estimate of the
Companys Board of Directors in accordance with the
Companys Asset Valuation Policy Guidelines. In the absence
of a readily ascertainable market value, the estimated value of
the Companys portfolio of equity interests may differ
significantly from the values that would be placed on the
portfolio if a ready market for the equity interests existed.
Any changes in valuation are recorded in the Companys
consolidated statements of operations as Net increase
(decrease) in unrealized appreciation of non-controlled
affiliate investments in the period of change.

33



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##### 






Item 8.     Financial
Statements and Supplementary Data

UTEK CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
SCHEDULES


|                                                                                                       |  |      |    | 
|------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|Documents                                                                                              |  | Page
|                                                                                                       |  |     
|Report of Independent Certified Public Accountants                                                     |  |      | 35 | 
|Consolidated Balance Sheets at December 31,
	2001 and 2000                                             |  |      | 36 | 
|Consolidated Statements of Operations for the
	years ended December 31, 2001, 2000 and 1999            |  |      | 37 | 
|Consolidated Statements of Cash Flows for the
	years ended December 31, 2001, 2000 and 1999            |  |      | 38 | 
|Consolidated Statements of Changes in Net Assets
	for the years ended December 31, 2001, 2000 and 1999 |  |      | 39 | 
|Schedule of Investments at December 31, 2001
	and 2000                                                 |  |      | 40 | 
|Notes to Consolidated Financial Statements                                                             |  |      | 42 | 
|Selected Per Share Data and Ratios for the years
	ended December 31, 2001, 2000, 1999, 1998, 1997      |  |      | 54 | 

34



---



##### 



REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS

Board of Directors and Shareholders

UTEK Corporation


We have audited the accompanying consolidated
balance sheets of UTEK Corporation, including the schedules of
investments, as of December 31, 2001 and 2000, and the
related consolidated statements of operations, cash flows, and
changes in net assets for each of the three years in the period
ended December 31, 2001, and selected per share data and
ratios for each of the five years in the period ended
December 31, 2001. These consolidated financial statements
and selected per share data and ratios are the responsibility of
the Companys management. Our responsibility is to express
an opinion on these financial statements and selected per share
data and ratios based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements and per share data and ratios are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included the physical inspection of
securities owned as of December 31, 2001 and 2000. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial
statements and selected per share data and ratios referred to
above present fairly, in all material respects, the consolidated
financial position of UTEK Corporation at December 31, 2001
and 2000, and the consolidated results of its operations, its
cash flows and changes in its net assets for each of the three
years in the period ended December 31, 2001, and the
selected per share data and ratios for each of the five years in
the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States.



| |                      
| | ---------------------
| | /S/ ERNST & YOUNG LLP

Tampa, Florida

March 15, 2002


35



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##### 



UTEK CORPORATION

CONSOLIDATED BALANCE SHEETS

|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |           |           |            | 
|------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------- | ------------ | --------- | ---------- | --------- | --------- | --------- | ---------- | 
|                                                                                                                         |                                                                                                                                                                 | December 31,                                                                                       |                           | December 31,
|                                                                                                                         |                                                                                                                                                                 | 2001                                                                                               |                           | 2000        
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |             
|ASSETS                                                                                                                   |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|Investments in non-controlled affiliates (cost
	$10,018,959 and $5,695,788 at December 31, 2001 and 2000,
	respectively) |                                                                                                                                                                 | $                                                                                                  | 9,988,772                 |              |           | $          | 5,949,582 |          
|Cash and cash equivalents                                                                                                |                                                                                                                                                                 |                                                                                                    | 1,432,473                 |              |           |            | 3,952,280 |          
|Short-term marketable securities                                                                                         |                                                                                                                                                                 |                                                                                                    | 282,284                   |              |           |            |          |          
|Prepaid expenses and other assets                                                                                        |                                                                                                                                                                 |                                                                                                    | 192,450                   |              |           |            | 110,331   |          
|Fixed assets, net                                                                                                        |                                                                                                                                                                 |                                                                                                    | 88,286                    |              |           |            | 76,473    |          
|                                                                                                                         | Intangible assets                                                                                                                                               |                                                                                                    |                           | 426,693      |           |            |           |          |          
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    | TOTAL ASSETS              |              |           | 12,410,958 |           |           |           | 10,088,666 | 
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|LIABILITIES                                                                                                              |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|Notes payable to bank                                                                                                    |                                                                                                                                                                 |                                                                                                    |                          |              |           |            | 39,975    |          
|Accrued expenses                                                                                                         |                                                                                                                                                                 |                                                                                                    | 90,125                    |              |           |            | 101,901   |          
|Deferred revenue                                                                                                         |                                                                                                                                                                 |                                                                                                    | 523,406                   |              |           |            |          |          
|Deferred income taxes                                                                                                    |                                                                                                                                                                 |                                                                                                    | 1,887,987                 |              |           |            | 1,491,788 |          
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    | TOTAL LIABILITIES         |              |           | 2,501,518  |           |           |           | 1,633,664  | 
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    | NET ASSETS                |              | $         | 9,909,440  |           |           | $         | 8,455,002  | 
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|Commitments and Contingencies                                                                                            |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|Composition of net assets                                                                                                |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|                                                                                                                         | Common stock, $.01 par value, 19,000,000 shares
	authorized; 3,915,672 and 3,782,226 shares issued and
	outstanding at December 31, 2001 and 2000, respectively |                                                                                                    | $                         | 39,157       |           |            | $         | 37,822    |          
|                                                                                                                         | Preferred stock, $.01 par value, 1,000,000 shares
	authorized; none issued and outstanding                                                                      |                                                                                                    |                           |             |           |            |           |          |          
|                                                                                                                         | Additional paid in capital                                                                                                                                      |                                                                                                    |                           | 6,988,141    |           |            |           | 6,173,859 |          
|                                                                                                                         | Accumulated income:                                                                                                                                             |                                                                                                    |                           |              |           |            |           |           |          
|                                                                                                                         |                                                                                                                                                                 | Accumulated net operating income                                                                   |                           |              | 2,969,294 |            |           |           | 2,061,314 |           
|                                                                                                                         |                                                                                                                                                                 | Net realized gain (loss) on investments, net
	of income taxes                                      |                           |              | (62,863   | )          |           |           | 23,715    |           
|                                                                                                                         |                                                                                                                                                                 | Net unrealized appreciation
	(depreciation) of investments, net of deferred income taxes
	(Note 4) |                           |              | (18,827   | )          |           |           | 158,292   |           
|                                                                                                                         |                                                                                                                                                                 | Foreign currency translation adjustment                                                            |                           |              | (5,462    | )          |           |           |          |           
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    | Net assets                |              | $         | 9,909,440  |           |           | $         | 8,455,002  | 
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    | Net asset value per share |              | $         | 2.53       |           |           | $         | 2.24       | 
|                                                                                                                         |                                                                                                                                                                 |                                                                                                    |                           |              |           |            |           |          

See accompanying notes

36



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##### 



UTEK CORPORATION

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |           |         | 
|------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | --------- | ------- | ---- | --------- | --------- | --------- | - | --------- | --------- | ------- | 
|                                                       |                                                                                                                                                                                                                         |                           
|                                                       |                                                                                                                                                                                                                         | Year Ended December 31    
|                                                       |                                                                                                                                                                                                                         |                           
|                                                       |                                                                                                                                                                                                                         | 2001                       |           | 2000      |         | 1999
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |     
|Income from operations:                                |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       | Sale of technology rights                                                                                                                                                                                               |                            | $         | 3,419,653 |         |      | $         | 4,501,584 |           |   | $         | 1,098,212 |        
|                                                       | Consulting fees                                                                                                                                                                                                         |                            |           | 534,782   |         |      |           |          |           |   |           | 165,000   |        
|                                                       | Investment income, net                                                                                                                                                                                                  |                            |           | 120,813   |         |      |           | 75,230    |           |   |           | 52,161    |        
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       |                                                                                                                                                                                                                         |                            | 4,075,248 |           |         |      | 4,576,814 |           |           |   | 1,315,373 |          
|Expenses:                                              |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       | Salaries and wages                                                                                                                                                                                                      |                            |           | 616,796   |         |      |           | 376,053   |           |   |           | 197,125   |        
|                                                       | Professional fees                                                                                                                                                                                                       |                            |           | 372,029   |         |      |           | 309,619   |           |   |           | 184,697   |        
|                                                       | Sales and marketing                                                                                                                                                                                                     |                            |           | 904,141   |         |      |           | 780,670   |           |   |           | 79,544    |        
|                                                       | General and administrative                                                                                                                                                                                              |                            |           | 719,004   |         |      |           | 417,526   |           |   |           | 266,956   |        
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       |                                                                                                                                                                                                                         |                            | 2,611,970 |           |         |      | 1,883,868 |           |           |   | 728,322   |          
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|Income before income taxes                             |                                                                                                                                                                                                                         |                            | 1,463,278 |           |         |      | 2,692,946 |           |           |   | 587,051   |          
|Provision for income taxes (Note 4)                    |                                                                                                                                                                                                                         |                            | 555,298   |           |         |      | 1,018,334 |           |           |   | 301,190   |          
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       |                                                                                                                                                                                                                         | Net income from operations |           |           | 907,980 |      |           |           | 1,674,612 |   |           |           | 285,861 | 
|Net realized and unrealized gains
	(losses):           |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       | Net realized gain (loss) on investments, net
	of income tax expense (benefit) of $(52,236) and $14,312,
	for 2001 and 2000 respectively                                                                                 |                            |           | (86,578   | )       |      |           | 23,715    |           |   |           |          |        
|                                                       | Change in unrealized appreciation (depreciation)
	of non-controlled affiliate investments, net of deferred tax
	expense (benefit) of $(106,861), $(347,298) and $73,800 for
	2001, 2000 and 1999, respectively (Note 4) |                            |           | (177,119  | )       |      |           | (575,627  | )         |   |           | 122,919   |        
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|Net increase in net assets from operations             |                                                                                                                                                                                                                         | $                          | 644,283   |           |         | $    | 1,122,700 |           |           | $ | 408,780   |          
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|Net increase in net assets from operations per
	share: |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       | Basic                                                                                                                                                                                                                   |                            | $         | .17       |         |      | $         | .38       |           |   | $         | .15       |        
|                                                       | Diluted                                                                                                                                                                                                                 |                            | $         | .17       |         |      | $         | .38       |           |   | $         | .15       |        
|Weighted average shares:                               |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       | Basic                                                                                                                                                                                                                   |                            |           | 3,840,714 |         |      |           | 2,968,018 |           |   |           | 2,682,420 |        
|                                                       | Diluted                                                                                                                                                                                                                 |                            |           | 3,882,914 |         |      |           | 2,968,720 |           |   |           | 2,682,420 |        
|Unaudited pro forma information:                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       | Net increase in net assets from operations before
	pro forma effect of change in Companys tax structure                                                                                                                |                            | $         | 644,283   |         |      | $         | 1,122,700 |           |   | $         | 408,780   |        
|                                                       | Pro forma effect of change in tax structure                                                                                                                                                                             |                            |           |          |         |      |           |          |           |   |           | 78,794    |        
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          
|                                                       | Pro forma increase in net assets from operations                                                                                                                                                                        |                            | $         | 644,283   |         |      | $         | 1,122,700 |           |   | $         | 487,574   |        
|                                                       |                                                                                                                                                                                                                         |                            |           |           |         |      |           |           |           |   |           |          

See accompanying notes

37



---



##### 



UTEK CORPORATION

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |           |            |          |           |  
|------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | --------------------------------- | ---------------------------------------------------- | ---------- | -------- | ---------- | --------- | ---------- | ------- | ---------- | --------- | ---------- | -------- | --------- | -
|                                                  |                                                                                                                     |                                                                   
|                                                  |                                                                                                                     | Year Ended December 31                                            
|                                                  |                                                                                                                     |                                                                   
|                                                  |                                                                                                                     | 2001                                                               |                                   | 2000                                                 |            | 1999    
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |         
|Operating Activities:                             |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|                                                  | Net increase in net assets from operations                                                                          |                                                                    | $                                 | 644,283                                              |            |          | $          | 1,122,700 |            |         | $          | 408,780   |           
|                                                  | Adjustments to reconcile net increase in net
	assets from operations to net cash provided by operating
	activities: |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |           |           
|                                                  |                                                                                                                     | (Increase) decrease in net unrealized
	appreciation of investments |                                   |                                                      | 283,980    |          |            |           | 922,925    |         |            |           | (196,719   | )       
|                                                  |                                                                                                                     | Depreciation                                                       |                                   |                                                      | 23,297     |          |            |           | 19,251     |         |            |           | 14,046     |         
|                                                  |                                                                                                                     | (Gain) loss on sale of investments                                 |                                   |                                                      | 138,814    |          |            |           | (38,027    | )       |            |           |           |         
|                                                  |                                                                                                                     | Deferred income taxes                                              |                                   |                                                      | 396,199    |          |            |           | 685,349    |         |            |           | 374,989    |         
|                                                  |                                                                                                                     | Investment securities received from sale of
	portfolio companies   |                                   |                                                      | (3,419,653 | )        |            |           | (4,301,585 | )       |            |           | (1,098,212 | )       
|                                                  |                                                                                                                     | Services rendered in exchange for investment
	securities           |                                   |                                                      | (453,635   | )        |            |           |           |         |            |           |           |         
|                                                  |                                                                                                                     | Stock issued for services received                                 |                                   |                                                      |           |          |            |           |           |         |            |           | 204,219    |         
|                                                  | Changes in operating assets and liabilities:                                                                        |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |           |           
|                                                  |                                                                                                                     |                                                                    | Prepaid expenses and other assets |                                                      |            | (117,032 | )          |           |            | 36,754  |            |           |            | (499,687 | )        
|                                                  |                                                                                                                     |                                                                    | Deferred revenue                  |                                                      |            | 27,008   |            |           |            |        |            |           |            |         |          
|                                                  |                                                                                                                     |                                                                    | Accrued expenses                  |                                                      |            | (11,776  | )          |           |            | (12,552 | )          |           |            | 105,755  |          
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|                                                  |                                                                                                                     |                                                                    |                                   | Net cash used in operating activities                |            |          | (2,488,515 | )         |            |         | (1,565,185 | )         |            |          | (686,829  | )
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|Investing Activities:                             |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|                                                  | Purchases of investment securities                                                                                  |                                                                    |                                   | (5,411,844                                           | )          |          |            |          |            |         |            |          |           
|                                                  | Proceeds received on sale of investments                                                                            |                                                                    |                                   | 5,049,343                                            |            |          |            | 62,037    |            |         |            |          |           
|                                                  | Cash acquired in acquisition of PAX Technology
	Transfer Ltd.                                                       |                                                                    |                                   | 27,533                                               |            |          |            |          |            |         |            |          |           
|                                                  | Purchases of fixed assets                                                                                           |                                                                    |                                   | (26,504                                              | )          |          |            | (14,987   | )          |         |            | (29,927   | )         
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|                                                  |                                                                                                                     |                                                                    |                                   | Net cash provided by (used in) investing
	activities |            |          | (361,472   | )         |            |         | 47,050     |           |            |          | (29,927   | )
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|Financing Activities:                             |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|                                                  | Proceeds from short term borrowings                                                                                 |                                                                    |                                   | 150,000                                              |            |          |            | 140,975   |            |         |            |          |           
|                                                  | Repayments on short-term borrowings                                                                                 |                                                                    |                                   | (189,975                                             | )          |          |            | (101,000  | )          |         |            |          |           
|                                                  | Net proceeds from issuance of common stock                                                                          |                                                                    |                                   | 375,617                                              |            |          |            | 4,423,181 |            |         |            | 1,305,807 |           
|                                                  | Net proceeds from issuance of common stock
	warrants                                                                |                                                                    |                                   |                                                     |            |          |            | 30        |            |         |            |          |           
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|                                                  |                                                                                                                     |                                                                    |                                   | Net cash provided by financing activities            |            |          | 335,642    |           |            |         | 4,463,186  |           |            |          | 1,305,807 |  
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|Foreign currency translation adjustment           |                                                                                                                     |                                                                    | (5,462                            | )                                                    |            |          |           |           |            |         |           |          
|Increase (decrease) in cash and cash
	equivalents |                                                                                                                     |                                                                    | (2,519,807                        | )                                                    |            |          | 2,945,051  |           |            |         | 589,051    |          
|Cash and cash equivalents at beginning of year    |                                                                                                                     |                                                                    | 3,952,280                         |                                                      |            |          | 1,007,229  |           |            |         | 418,178    |          
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|Cash and cash equivalents at end of year          |                                                                                                                     | $                                                                  | 1,432,473                         |                                                      |            | $        | 3,952,280  |           |            | $       | 1,007,229  |          
|                                                  |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|Supplemental Cash Flow Information:               |                                                                                                                     |                                                                    |                                   |                                                      |            |          |            |           |            |         |            |          
|Cash paid for interest                            |                                                                                                                     | $                                                                  | 606                               |                                                      |            | $        | 1,699      |           |            | $       |           |          
|Stock received in satisfaction of note receivable |                                                                                                                     | $                                                                  | 39,614                            |                                                      |            | $        |           |           |            | $       |           |          

See accompanying notes

38



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##### 



UTEK CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET
ASSETS

|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |           |           | 
|--------------------------------------- | --------------------------------------------------------------------------------------------------- | -------------------------------------------------- | --------- | -------- | --------- | ---- | --------- | --------- | --------- |  | --------- | --------- | --------- | 
|                                        |                                                                                                     |                                                   
|                                        |                                                                                                     | Year Ended December 31                            
|                                        |                                                                                                     |                                                   
|                                        |                                                                                                     | 2001                                               |           | 2000     |           | 1999
|                                        |                                                                                                     |                                                    |           |          |           |     
|Changes in net assets from
	operations: |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|                                        | Net income from operations                                                                          |                                                    | $         | 907,980  |           |      | $         | 1,674,612 |           |  | $         | 285,861   |          
|                                        | Net realized gain (loss) on sale of
	investments                                                    |                                                    |           | (86,578  | )         |      |           | 23,715    |           |  |           |          |          
|                                        | Change in net unrealized appreciation
	(depreciation) of investments, net of related deferred taxes |                                                    |           | (177,119 | )         |      |           | (575,627  | )         |  |           | 122,919   |          
|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|                                        |                                                                                                     | Net increase in net assets from operations         |           |          | 644,283   |      |           |           | 1,122,700 |  |           |           | 408,780   | 
|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|Capital stock transactions:             |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|                                        | Common stock issued for cash                                                                        |                                                    |           | 375,617  |           |      |           | 4,047,819 |           |  |           | 1,305,807 |          
|                                        | Common stock warrants issued for cash                                                               |                                                    |           |         |           |      |           | 30        |           |  |           |          |          
|                                        | Common stock issued in acquisition of PAX
	Technology Transfer, Ltd.                                |                                                    |           | 440,000  |           |      |           |          |           |  |           |          |          
|                                        | Common stock issued for services                                                                    |                                                    |           |         |           |      |           |          |           |  |           | 204,219   |          
|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|                                        |                                                                                                     | Net increase in net assets from stock transactions |           |          | 815,617   |      |           |           | 4,047,849 |  |           |           | 1,510,026 | 
|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|Foreign currency translation adjustment |                                                                                                     |                                                    | (5,462    | )        |           |      |          |           |           |  |          |          
|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|Net increase in net assets              |                                                                                                     |                                                    | 1,454,438 |          |           |      | 5,170,549 |           |           |  | 1,918,806 |          
|Net assets at beginning of year         |                                                                                                     |                                                    | 8,455,002 |          |           |      | 3,284,453 |           |           |  | 1,365,647 |          
|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          
|                                        |                                                                                                     | Net assets at end of year                          |           | $        | 9,909,440 |      |           | $         | 8,455,002 |  |           | $         | 3,284,453 | 
|                                        |                                                                                                     |                                                    |           |          |           |      |           |           |           |  |           |          

See accompanying notes

39



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##### 



UTEK CORPORATION

Schedule of Investments

December 31, 2001


| |  |        |           |             |  |  |       |          |  |                                                                                                                                                |  |   |            |  |  |   |           |  
| |  | ------ | --------- | ----------- |  |  | ----- | -------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- |  |  | - | --------- | -
| |  |        |           | Original    |  |  |       |          |  |                                                                                                                                               
| |  |        |           | Date of     |  |  |       | Original |  | Fair                                                                                                                                          
| |  | Shares |           | Acquisition |  |  |       | Cost     |  | Value                                                                                                                                         
| |  |        |           |             |  |  |       |          |  |                                                                                                                                               
| |  |        |           |             |  |  |       |          |  | Common stock in non-controlled
	affiliates  100.8%                                                                                            |  |   |            |  |  |   |           |  
| |  |        | 236,000   |             |  |  | 3/01  |          |  | Lexon,
	Inc. publicly traded over
	the counter  .2%; developer of health care technology                                                     |  | $ | 39,614     |  |  | $ | 21,240    |  
| |  |        | 879,300   |             |  |  | 1/99  |          |  | Image Analysis,
	Inc., privately held 
	17.2%; medical and hospital equipment developer                                                       |  |   | 219,825    |  |  |   | 1,705,842 |  
| |  |        | 1,584,000 |             |  |  | 5/99  |          |  | Centrex, Inc.,
	publicly traded over the counter  15.7%; developer of
	water and purification methodologies                                   |  |   | 522,720    |  |  |   | 1,552,320 |  
| |  |        | 900,000   |             |  |  | 5/99  |          |  | Nubar, Inc.,
	privately held  0%; developer of construction
	materials                                                                        |  |   | 126,000    |  |  |   |          |  
| |  |        | 1,037,957 |             |  |  | 6/99  |          |  | NuElectric
	Corporation, publicly traded over the
	counter  3.8%; environmental services                                                      |  |   | 590,388    |  |  |   | 373,665   |  
| |  |        | 150       |             |  |  | 11/99 |          |  | Rosbon, Inc.,
	privately held  0.8%; real estate development                                                                                  |  |   | 90,705     |  |  |   | 76,768    |  
| |  |        | 100,799   |             |  |  | 3/00  |          |  | Graphco Technologies,
	Inc., privately held  5.1%;
	developer of e-commerce technologies                                                      |  |   | 952,362    |  |  |   | 511,050   |  
| |  |        | 2,326,153 |             |  |  | 6/00  |          |  | Advanced Recycling Sciences,
	Inc., formerly The Quantum Group,
	Inc., publicly traded over the counter  10.6%; tire
	recycling methodologies |  |   | 2,158,953  |  |  |   | 1,046,769 |  
| |  |        | 1,068,354 |             |  |  | 11/00 |          |  | Torvec, Inc.,
	publicly traded over the counter  8.7%; advanced
	automotive technologies                                                      |  |   | 2,147,392  |  |  |   | 865,367   |  
| |  |        | 641,667   |             |  |  | 4/01  |          |  | Bitzmart, Inc.,
	privately held  18.8%; software products                                                                                     |  |   | 1,658,000  |  |  |   | 1,867,251 |  
| |  |        | 1,850,000 |             |  |  | 5/01  |          |  | Sense Holdings,
	Inc., publicly traded over the
	counter  10.3%; biometric technologies                                                       |  |   | 481,000    |  |  |   | 1,017,500 |  
| |  |        | 810,000   |             |  |  | 9/01  |          |  | Prime Pharmaceutical
	Corporation, privately
	held  4.1%; pharmaceutical developments in
	dermatology                                         |  |   | 486,000    |  |  |   | 405,000   |  
| |  |        | 1,000,000 |             |  |  | 11/01 |          |  | Primapharm Funding
	Corporation, privately
	held  4.9%; intellectual property development                                                     |  |   | 490,000    |  |  |   | 490,000   |  
| |  |        | 400,000   |             |  |  | 11/01 |          |  | USAOnestar.Net Inc.,
	publicly traded over the counter  .6%; telecom,
	educational internet service                                           |  |   | 56,000     |  |  |   | 56,000    |  
| |  |        |           |             |  |  |       |          |  |                                                                                                                                                |  |   |            |  |  |   |           |  
| |  |        |           |             |  |  |       |          |  | TOTAL INVESTMENTS  100.8%                                                                                                                     |  | $ | 10,018,959 |  |  | $ | 9,988,772 |  
| |  |        |           |             |  |  |       |          |  |                                                                                                                                                |  |   |            |  |  |   |           |  
| |  |        |           |             |  |  |       |          |  | Cash and other assets, less
	liabilities  (.8)%                                                                                               |  |   |            |  |  |   | (79,332   | )
| |  |        |           |             |  |  |       |          |  |                                                                                                                                                |  |   |            |  |  |   |           |  
| |  |        |           |             |  |  |       |          |  | Net assets at December 31, 2001 
	100%                                                                                                        |  |   |            |  |  | $ | 9,909,440 |  
| |  |        |           |             |  |  |       |          |  |                                                                                                                                                |  |   |            |  |  |   |           |  

Notes to Schedule of Investments:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The above investments are non-income producing.
	Equity investments that have not paid dividends within the last
	twelve months are considered non-income producing.                                                                                                                                                                                                                                            
|
| |  | The value of all restricted securities is
	determined in good faith by the Board of Directors. In making
	its determination, the Board of Directors may consider valuation
	appraisals provided by independent financial experts. (Notes 1
	and 2).                                                                                                                                                             
|
| |  | As of December 31, 2001, all of the
	securities that we have received in exchange for our portfolio
	companies are restricted securities, as that term is
	defined under Rule 144. These securities may not be sold in
	the absence of registration under the 1933 Act or an exemption
	therefrom. As a result, our ability to sell or otherwise
	transfer the securities we hold in our portfolio is limited.
|
| |  | The Company owns more than 10% of the outstanding
	common stock of each of the above investments with the exception
	of Graphco Technologies, Inc., Torvec, Inc., Lexon, Inc. and
	Prime Pharmaceutical Corporation. As such, the Company is deemed
	to be an affiliate of the above companies, as defined under
	Rule 144, except for those specifically noted.                                                

See accompanying notes.

40



---



##### 



UTEK CORPORATION

Schedule of Investments

December 31, 2000


|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|------ | --------- | ----------- |  |  | ----- | -------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  |  | - | --------- | 
|       |           | Original    |  |  |       |          |  |                                                                                                                          
|       |           | Date of     |  |  |       | Original |  | Fair                                                                                                                     
|Shares |           | Acquisition |  |  |       | Cost     |  | Value                                                                                                                    
|       |           |             |  |  |       |          |  |                                                                                                                          
|       |           |             |  |  |       |          |  | Common stock in non-controlled
	affiliates  70.4%                                                                        |  |   |           |  |  |   |           | 
|       | 924,973   |             |  |  | 5/98  |          |  | Lexon,
	Inc. publicly traded over
	the counter development stage enterprise  1.8%;
	developer of health care technology |  | $ | 295,991   |  |  | $ | 147,996   | 
|       | 879,300   |             |  |  | 1/99  |          |  | Image Analysis, Inc.,privately held  16.8%;
	medical and hospital equipment developer                                    |  |   | 219,825   |  |  |   | 1,424,466 | 
|       | 1,584,000 |             |  |  | 5/99  |          |  | Centrex, Inc.,privately held  0%;
	developer of water and purification methodologies                                     |  |   | 522,720   |  |  |   |          | 
|       | 900,000   |             |  |  | 5/99  |          |  | Nubar, Inc.,privately held  0.6%;
	developer of construction materials                                                   |  |   | 126,000   |  |  |   | 51,300    | 
|       | 1,037,957 |             |  |  | 6/99  |          |  | NuElectric Corporation.,publicly traded over the
	counter  7.1%; environmental services                                  |  |   | 590,388   |  |  |   | 602,015   | 
|       | 150       |             |  |  | 11/99 |          |  | Rosbon, Inc.,privately held  1.0%; real
	estate development                                                              |  |   | 87,000    |  |  |   | 82,852    | 
|       | 100,799   |             |  |  | 3/00  |          |  | Graphco Technologies, Inc.,privately held  11.3%;
	developer of e-commerce technologies                                  |  |   | 952,362   |  |  |   | 952,362   | 
|       | 931,000   |             |  |  | 6/00  |          |  | The Quantum Group, Inc.,publicly traded over the
	counter  2.9%; tire recycling methodologies                            |  |   | 754,110   |  |  |   | 242,060   | 
|       | 1,068,354 |             |  |  | 11/00 |          |  | Torvec, Inc.,publicly traded over the
	counter  28.9%; advanced automotive technologies                                  |  |   | 2,147,392 |  |  |   | 2,446,531 | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|       |           |             |  |  |       |          |  | TOTAL INVESTMENTS  70.4%                                                                                                 |  | $ | 5,695,788 |  |  | $ | 5,949,582 | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|       |           |             |  |  |       |          |  | Cash and other assets, less
	liabilities  29.6%                                                                          |  |   |           |  |  |   | 2,505,420 | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|       |           |             |  |  |       |          |  | Net assets at December 31, 2000 
	100%                                                                                   |  |   |           |  |  | $ | 8,455,002 | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 

Notes to Schedule of Investments:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The above investments are non-income producing.
	Equity investments that have not paid dividends within the last
	twelve months are considered non-income producing.                                                                                                                                                                                                                                                  
|
| |  | The value of all restricted securities is
	determined in good faith by the Board of Directors. In making
	its determination, the Board of Directors may consider valuation
	appraisals provided by independent financial experts. (Notes 1
	and 2).                                                                                                                                                                   
|
| |  | As of December 31, 2000, all of the
	securities that we have received in exchange for our portfolio
	companies are restricted securities, as that term is
	defined under Rule 144. These securities may not be sold in
	the absence of registration under the 1933 Act or an exemption
	there from. As a result, our ability to sell or otherwise
	transfer the securities we hold in our portfolio will be limited.
|
| |  | The Company owns more than 10% of the outstanding
	common stock of each of the above investments with the exception
	of Graphco Technologies, Inc., Torvec, Inc. and The Quantum
	Group, Inc. As such, the Company is deemed to be an affiliate of
	the above companies, as defined under Rule 144.                                                                                                                   

See accompanying notes

41



---



##### 



UTEK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

1. Nature of business and significant
accounting policies

The
Company

We are a non-diversified, closed-end management
investment company that has elected to be treated as a Business
Development Company (BDC) under the Investment
Company Act of 1940 (1940 Act).

We commenced operations in 1997 as UTEK
Corporation (UTEK Florida), which was incorporated
under the laws of the State of Florida in August 1996. UTEK
Florida was engaged in the business of technology transfer. On
December 31, 1998, we formed UTEK, LLC, a limited liability
company organized under the laws of the State of Florida.
Subsequent thereto, the shareholders of UTEK Florida exchanged
their shares of common stock for membership units in UTEK, LLC.
In July 1999, we formed UTEK Corporation under the laws of the
State of Delaware and in October 1999, UTEK LLC was merged into
UTEK Corporation. In September 2001, UTEK Corporation acquired
100% of PAX Technology Transfer Ltd., a United Kingdom
corporation, in a stock for stock transaction. See Note 8.

As a BDC, we must be primarily engaged in the
business of furnishing capital and managerial assistance to
companies that do not have ready access to capital through
conventional financial channels. Such companies are termed
portfolio companies.

The Company invests in portfolio companies that
management believes are positioned to benefit from the
acquisition of new technology. The Companys investments in
portfolio companies generally are used by the portfolio
companies to acquire the license rights to new technologies
developed at universities and/or government research facilities.
The Company provides portfolio companies with managerial
assistance in technology transfer. Technology transfer is the
process by which technologies developed by universities or
research laboratories are licensed to companies for commercial
use. The Company also may make additional investments to fund
continued research and development of the acquired technologies.

The Company seeks merger partners for
portfolio companies, whereby the Company receives common stock
in the merger partner in a non-taxable exchange for shares of
the portfolio company. The Company generally seeks merger
partners that are in the early stages of development. The merger
partners normally have little or no prior operating history.

To facilitate establishing on-going consulting
engagements with its clients, the Company has developed a
strategic alliance process. UTEKs strategic alliances are
designed to help technology companies rapidly enhance their new
product pipeline through the acquisition of proprietary
intellectual capital from universities and federal laboratories.

Principles of
Consolidation

The consolidated financial statements include the
accounts of UTEK Corporation and its wholly owned subsidiaries.
All intercompany transactions and balances are eliminated in
consolidation. Portfolio companies are consolidated with the
Company prior to the exchange of their shares with a merger
partner.

Impairment of
Long-lived Assets

The Company reviews long-lived assets, including
goodwill, for impairment. Such assets are written down to fair
value when events or changes in circumstances indicate that the
carrying value may not be recoverable.

Intangible
Assets

Intangible assets consist primarily of the excess
cost over the fair value of net identifiable assets acquired
(goodwill) relating to the September 28, 2001 acquisition
of Pax Technology Transfer, Ltd. The Company applied the
non-amortization provisions of Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible
Assets and as a result, the related goodwill in not being
amortized.

42



---



##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



1. Nature of business and significant
accounting policies  (Continued)


Segment
Disclosures

Management considers the Company as operating in
only one segment, the transfer of new technologies through the
sale of portfolio companies. A subsidiary of UTEK Corporation
has assets in the United Kingdom, however, the assets and
operations are not significant.

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 amounts reported in the financial
statements and accompanying notes. Actual results could differ
from those estimates.

Investments

Pursuant to the requirements of the 1940 Act, our
Board of Directors is responsible for determining, in good
faith, the fair value of our securities and assets for which
market quotations are not readily available. In making its
determination, the Board of Directors may consider valuation
appraisals provided by independent financial experts. With
respect to private equity securities, each investment is valued
using industry valuation benchmarks, and then the value is
assigned a discount reflecting the illiquid nature of the
investment as well as our minority, non-control position. When
an external event such as a purchase transaction, public
offering, or subsequent equity sale occurs, the pricing
indicated by the external event is used to corroborate our
private equity valuation. Equity securities in public companies
that carry certain restrictions on sale are generally valued at
a discount from the public market value of the securities.

The Board of Directors bases its determination
upon, among other things, applicable quantitative and
qualitative factors. These factors may include, but are not
limited to, type of securities, nature of business,
marketability, market price of unrestricted securities of the
same issue (if any), comparative valuation of securities of
publicly-traded companies in the same or similar industries,
current financial conditions and operating results, sales and
earnings growth, operating revenues, competitive conditions and
current and prospective conditions in the overall stock market.

Without a readily ascertainable market value, the
estimated value of our portfolio of equity securities may differ
significantly from the values that would be placed on the
portfolio if there existed a ready market for such equity
securities. Equity securities at December 31, 2001 and 2000
(100.8% and 70.4% of net assets, respectively) are stated at
fair value as determined by the Board of Directors, in the
absence of readily ascertainable fair values.

Cash and Cash
Equivalents

The Company considers all highly liquid fixed
income investments with maturities of three months or less to be
cash equivalents.

Short-term
Investments

The Company has a cash management program which
provides for the investment of excess cash balances primarily in
short-term commercial paper, treasury bills and mutual funds.
The Company classifies all of its short-term investments as
available-for-sale securities. Such short-term investments
consist of a mutual fund which is stated at market value, with
unrealized gains and losses on such securities reflected, net of
tax, in net assets. Realized gains and losses on short-term
investments are included in earnings and are derived using the
specific identification method for determining the cost of
securities.

43



---



##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

1. Nature of business and significant
accounting policies  (Continued)

Income
Taxes

The Company does not qualify as a Regulated
Investment Company for income tax purposes. Therefore, the
Company is taxed as a regular corporation for federal and state
income tax purposes.

Revenue
Recognition

Effective January 1, 2000, the Company
adopted the provisions of SEC Staff Accounting Bulletin 101,
Revenue Recognition in Financial Statements
(SAB 101). SAB 101 provides guidance on the
recognition, presentation and disclosures of revenue in
financial statements. The adoption of SAB 101 had no material
impact on the Companys financial statements.

The Company recognizes revenue from the sale of
technology rights upon the exchange of the shares of portfolio
companies with unrelated merger partners. The Company records
revenue based on the value of the consideration received. In
most cases, the consideration received for the rights is the
common stock of the purchaser. The common stock received is
recorded as an investment at value. Revenue derived from
consulting services is recognized as earned, over the life of
the underlying consulting agreements. In some cases, the Company
is paid a fee for negotiating a successful technology transfer.
In these instances, revenue is recognized upon consummation of
the transaction.

Revenue from strategic alliance agreements are
deferred and recognized over the term of each agreement,
typically twelve months. These agreements are cancelable at any
time.

The Companys consolidated subsidiary
derives its revenue primarily from consulting contracts with
third parties. Revenue from consulting contracts are deferred
and recognized ratably over the term of the contract, typically
ninety days.

Fixed
Assets

Fixed assets are stated at cost, less accumulated
depreciation. Depreciation is recorded using the straight-line
method over the estimated useful lives of the respective assets
(generally two to five years). Leasehold improvements are
amortized over the shorter of the estimated useful life of the
assets or lease term.

Stock Based
Compensation

The Company follows Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees(APB 25) and related interpretations in accounting for
its qualified and nonqualified stock options and has adopted the
disclosure-only option under Statements of Financial Accounting
Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation(SFAS 123).

Concentrations
of Credit Risk

Cash and cash equivalents are financial
instruments that potentially subject the Company to
concentrations of credit risk. The estimated fair value of
financial instruments approximates the carrying value based on
available market information. The Company invests its excess
available funds primarily in U.S. Government backed securities.
The Companys customers are typically located in the United
States.

Research and
Development

Research and development costs consist of
expenditures incurred during the course of planned search and
investigation aimed at discovery of new knowledge that will be
useful in developing new products or processes. The Company
expenses all research and development costs as they are
incurred. For the year December 31, 1999, the Company
incurred no such costs. For the years ended December 31,
2001 and 2000, the Company

44



---



##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

1. Nature of business and significant
accounting policies  (Continued)

incurred $356,000 and $375,000, respectively, in
such costs, which is classified as sales and marketing expense
in the consolidated statements of operations.

Foreign currency
translation

The Company translates the assets and liabilities
of its non-U.S. functional currency subsidiary into dollars at
the current rates of exchange in effect at the end of each
reporting period. Revenues and expenses are translated using
rates that approximate those in effect during the period.
Translation adjustments are included in net assets under the
caption Foreign currency translation adjustment.

Reclassifications

Certain amounts for 1999 and 2000 in the
accompanying consolidated financial statements have been
reclassified to conform to the current years presentation.

Impact of New
Accounting Standards

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets(SFAS 142). SFAS 142 revises the
standards of accounting for goodwill and indefinite-lived
intangible assets. SFAS 142 prohibits the amortization of
goodwill and intangible assets with indefinite useful lives and
requires that these assets be reviewed for impairment at least
annually, or more frequently if impairment indicators arise.
Intangible assets with finite lives will continue to be
amortized over their estimated useful lives. The
non-amortization provisions of SFAS 142 apply to goodwill
and indefinite lived intangible assets acquired in a business
combination after June 30, 2001. As a result, the goodwill
recorded in connection with the Companys acquisition of
Pax Technology Transfer Ltd. will not be amortized. See
Note 8 to the Consolidated Financial Statements under
Item 8. The Company will apply the remaining provisions of
SFAS 142 in the first quarter of 2002 and does not
anticipate that application of those provisions will have a
material impact on the Companys financial position or its
results of operations.

2. Investments

Equity securities at December 31, 2001 and
December 31, 2000, (100.8% and 70.4% of net assets)
respectively were valued at fair value as determined by the
Board of Directors, in the absence of readily ascertainable
market values.

The values assigned to these securities are based
upon available information and do not reflect amounts that could
be realized upon immediate sale, nor amounts that ultimately may
be realized. Accordingly, the fair values included in the
schedule of investments may differ from the values that would
have been used had a ready market existed for these securities
and such differences could be significant.

As of December 31, 2001 and
December 31, 2000, the Company had established four and
eight portfolio companies, respectively, with net assets of $0
and $740, respectively, which are included in other assets.

On January 28, 2000, the Company sold its
Cancer Diagnostic, Inc. portfolio company to Lexon, Inc. for
$200,000. The Company received $170,000 in cash and 236,000
shares were issued in March 2001 for the remaining balance and
accrued interest on the note.

On March 21, 2000, the Company sold its
Digital Personnel, Inc. portfolio company to a subsidiary of
Graphco Technologies, Inc. (GTC) for 100,799 shares
of GTC common stock in a non-taxable exchange.

45



---



##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

2. Investments 
(Continued)

On June 24, 2000, the Company sold its
Advanced Recycling Sciences, Inc. portfolio company to The
Quantum Group, Inc. for 931,000 unregistered shares of The
Quantum Group, Inc. common stock in a non-taxable exchange.

On September 21, 2000, the Company sold its
Zorax, Inc. portfolio company to NuElectric Corporation for
546,000 unregistered shares of NuElectric Corporation common
stock in a non-taxable exchange.

On November 29, 2000, the Company sold its
Ice Surface Development, Inc. portfolio company to Torvec, Inc.
for 1,068,354 unregistered shares of Torvec, Inc. common stock
in a non-taxable exchange.

On February 19, 2001, the Company sold its
Technology Development, Inc. portfolio company to Advanced
Recycling Sciences, Inc., (formerly known as The Quantum Group,
Inc.) for 1,446,153 unregistered shares of Advanced Recycling
Sciences, Inc. common stock in a non-taxable exchange.

On April 20, 2001, the Company sold its
Watermark Technologies, Inc. portfolio company to Bitzmart, Inc.
for 450,000 unregistered shares of Bitzmart, Inc. common stock
in a non-taxable exchange.

On May 31, 2001, the Company sold its Micro
Sensor Technologies, Inc. portfolio company to Sense Holdings,
Inc. for 1,850,000 unregistered shares of Sense Holdings, Inc.
common stock in a non-taxable exchange.

On September 28, 2001, the Company sold its
Advanced Microsphere Technology, Inc. portfolio company to Prime
Pharmaceutical Corporation for 560,000 shares of Prime
Pharmaceutical Corporation common stock in a non-taxable
exchange.

On August 14, 2001, the Company acquired
41,667 unregistered shares from Bitzmart, Inc. at $3.00 per
share for $125,000.

On September 27, 2001, the Company acquired
250,000 unregistered shares from Prime Pharmaceutical
Corporation at $.60 per share for $150,000.

On September 14, 2001, the Company received
100,000 unregistered shares from Bitzmart, Inc. at $2.31 per
share in a strategic alliance agreement.

On October 29, 2001, the Company received
1,000,000 unregistered shares of Primapharm Funding Corporation
in a strategic alliance agreement. For the period ended
December 31, 2001, the Company recognized consulting fees
relating to 42,743 shares at the valuation price of $.14.

On November 1, 2001, the Company received
50,000 unregistered shares of Bitzmart, Inc. at $2.91 per share
in a strategic alliance agreement, all of which was recognized
as consulting fees for the period ended December 31, 2001.

On November 28, 2001, the Company received
400,000 unregistered shares of USAOnestar.net, Inc. in a
strategic alliance agreement. For the period ended
December 31, 2001, the Company recognized consulting fees
relating to 145,206 shares at the valuation price of $.49.

3. Fixed Assets

Fixed assets consist of the following:

|                              |  |              |         |      |  |   |         |  
|----------------------------- |  | ------------ | ------- | ---- |  | - | ------- | -
|                              |  |             
|                              |  | December 31,
|                              |  |             
|                              |  | 2001         |         | 2000
|                              |  |              |         |     
|Computer Equipment            |  | $            | 86,859  |      |  | $ | 69,727  |  
|Furniture and Fixtures        |  |              | 43,051  |      |  |   | 26,268  |  
|Leasehold Improvements        |  |              | 19,150  |      |  |   | 17,955  |  
|                              |  |              |         |      |  |   |         |  
|                              |  |              | 149,060 |      |  |   | 113,950 |  
|Less accumulated depreciation |  |              | (60,774 | )    |  |   | (37,477 | )
|                              |  |              |         |      |  |   |         |  
|                              |  | $            | 88,286  |      |  | $ | 76,473  |  
|                              |  |              |         |      |  |   |         |  

46



---



##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

4. Income Taxes

Prior to October 14, 1999, the
Companys business was structured as a limited liability
company (LLC). The LLC elected to be treated as a
partnership under the provisions of Subchapter K of the Internal
Revenue Code. Under those provisions, the LLC did not pay
corporate income taxes on its taxable income. Instead, the
owners of the LLC were individually liable for income taxes on
the LLCs taxable income. The LLCs subsidiaries,
including UTEK Holdings and UTEK Corporation, were all taxed as
C corporations.

On October 14, 1999, the Company
restructured its business, whereby the members of the LLC
contributed their membership interests to the Company, a newly
created corporation. As a result, all of the LLCs assets,
including the stock of its subsidiaries, were transferred to the
Company and the LLC was dissolved. In addition, UTEK Holdings
and UTEK Corporation were liquidated into the Company. As of
October 14, 1999, the Company is taxable as a C corporation.

The Company accounts for income taxes under FASB
No. 109, Accounting for Income Taxes (SFAS
No. 109). Deferred income tax assets and liabilities are
determined based upon differences between financial reporting
and tax bases of assets and liabilities and are measured using
the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

The components of the income tax provision on
operations, excluding income tax expense (benefit) on
realized gains (losses) and unrealized appreciation
(depreciation) of investments are as follows:

|          |         |                         |         |         |  |      |           |         |  |   |         |         | 
|--------- | ------- | ----------------------- | ------- | ------- |  | ---- | --------- | ------- |  | - | ------- | ------- | 
|          |         |                        
|          |         | Year Ended December 31,
|          |         |                        
|          |         | 2001                    |         | 2000    |  | 1999
|          |         |                         |         |         |  |     
|Current:  |         |                         |         |         |  |      |           |         |  |   |         |        
|          | Federal |                         | $       |        |  |      | $         |        |  |   | $       |        | 
|          | State   |                         |         |        |  |      |           |        |  |   |         |        | 
|          |         |                         |         |         |  |      |           |         |  |   |         |        
|          |         | $                       |        |         |  | $    |          |         |  | $ |        |        
|          |         |                         |         |         |  |      |           |         |  |   |         |        
|Deferred: |         |                         |         |         |  |      |           |         |  |   |         |        
|          | Federal |                         | $       | 473,320 |  |      | $         | 867,428 |  |   | $       | 257,168 | 
|          | State   |                         |         | 81,978  |  |      |           | 150,906 |  |   |         | 44,022  | 
|          |         |                         |         |         |  |      |           |         |  |   |         |        
|          |         |                         | 555,298 |         |  |      | 1,018,334 |         |  |   | 301,190 |        
|          |         |                         |         |         |  |      |           |         |  |   |         |        
|          |         | $                       | 555,298 |         |  | $    | 1,018,334 |         |  | $ | 301,190 |        
|          |         |                         |         |         |  |      |           |         |  |   |         |        

A reconciliation of the differences between the
effective income tax rate and the statutory federal tax rate
follows:

|                                    |  |                         |         |      |  |      |           |  |  |   |         | 
|----------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | --------- |  |  | - | ------- | 
|                                    |  |                        
|                                    |  | Year Ended December 31,
|                                    |  |                        
|                                    |  | 2001                    |         | 2000 |  | 1999
|                                    |  |                         |         |      |  |     
|Tax at U.S. statutory rate          |  | $                       | 497,255 |      |  | $    | 915,601   |  |  | $ | 199,597 | 
|State taxes, net of federal benefit |  |                         | 54,104  |      |  |      | 98,217    |  |  |   | 29,057  | 
|LLC loss deductible by members      |  |                         |        |      |  |      |          |  |  |   | 71,193  | 
|Other                               |  |                         | 3,939   |      |  |      | 4,516     |  |  |   | 1,343   | 
|                                    |  |                         |         |      |  |      |           |  |  |   |         | 
|                                    |  | $                       | 555,298 |      |  | $    | 1,018,334 |  |  | $ | 301,190 | 
|                                    |  |                         |         |      |  |      |           |  |  |   |         | 

47



---



##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



4. Income Taxes 
(Continued)


Significant components of the Companys
deferred tax assets and liabilities are as follows:

|                                         |                            |                         |            |            |   |   |            |            |  
|---------------------------------------- | -------------------------- | ----------------------- | ---------- | ---------- | - | - | ---------- | ---------- | -
|                                         |                            |                        
|                                         |                            | Year Ended December 31,
|                                         |                            |                        
|                                         |                            | 2001                    |            | 2000      
|                                         |                            |                         |            |           
|Net operating loss carryforward          |                            | $                       | 871,326    |            |   | $ | 601,553    |           
|Capital loss carryforward                |                            |                         | 52,236     |            |   |   |           |           
|Other                                    |                            |                         | (876       | )          |   |   | (1,920     | )         
|Investments in non-controlled affiliates |                            |                         | (2,810,673 | )          |   |   | (2,091,421 | )         
|                                         |                            |                         |            |            |   |   |            |           
|                                         | Net deferred tax liability |                         | $          | (1,887,987 | ) |   | $          | (1,491,788 | )
|                                         |                            |                         |            |            |   |   |            |           

SFAS No. 109 requires a valuation allowance
to reduce the deferred tax assets reported if, based on the
weight of the evidence, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
After consideration of all the evidence, both positive and
negative, management has determined that a valuation allowance
was not necessary as of December 31, 2001 and 2000.

At December 31, 2001, the Company has
available U.S. net operating loss carryforwards of approximately
$2,315,000, which expire in years 2012, 2018, 2019, 2020 and
2021, and UK net operating loss carryforwards of $8,000 which
carryforward indefinitely. At December 31, 2001 the Company
has a capital loss carryforward of approximately $139,000, which
will expire in 2006.

On a pro forma basis, if the Company were a
taxable entity for all periods, the Company would have
recognized the benefit of additional taxable losses in 1999 of
approximately $209,000. The unaudited 1999 pro forma tax
provision on operations, presented as if the Company were a
taxable entity for all periods presented and calculated in
accordance with SFAS No. 109, is as follows:

|                              |  |              |         | 
|----------------------------- |  | ------------ | ------- | 
|                              |  | Year Ended  
|                              |  | December 31,
|                              |  | 1999        
|                              |  |             
|Current income tax provisions |  | $            |        | 
|Deferred income tax provision |  |              | 222,396 | 
|                              |  |              |         | 
|                              |  | $            | 222,396 | 
|                              |  |              |         | 

A reconciliation of the differences between the
1999 pro forma effective income tax rate and the pro forma
statutory federal tax rate follows:

|                                    |  |              |         | 
|----------------------------------- |  | ------------ | ------- | 
|                                    |  | Year Ended  
|                                    |  | December 31,
|                                    |  | 1999        
|                                    |  |             
|Tax at U.S. statutory rate          |  | $            | 199,597 | 
|State taxes, net of federal benefit |  |              | 21,456  | 
|Valuation allowance                 |  |              |        | 
|Other                               |  |              | 1,343   | 
|                                    |  |              |         | 
|                                    |  | $            | 222,396 | 
|                                    |  |              |         | 

48



---



##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|   |                     
|-- | --------------------
|5. | Stockholders Equity

Transactions in common stock for the three years
ended December 31, 2001 were as follows:

|                             |                                                                |        |           |           |  |                 |        |        |  |   |           |           | 
|---------------------------- | -------------------------------------------------------------- | ------ | --------- | --------- |  | --------------- | ------ | ------ |  | - | --------- | --------- | 
|Common Stock                 |                                                                | Shares |           | Par Value |  | Paid In Capital
|                             |                                                                |        |           |           |  |                
|Balance at December 31, 1998 |                                                                |        | 2,454,402 |           |  | $               | 24,544 |        |  | $ | 629,262   |          
|                             | Private placement  April 12, 1999                             |        |           | 281,424   |  |                 |        | 2,814  |  |   |           | 1,302,993 | 
|                             | Issued for services                                            |        |           | 46,400    |  |                 |        | 464    |  |   |           | 203,755   | 
|                             |                                                                |        |           |           |  |                 |        |        |  |   |           |          
|Balance at December 31, 1999 |                                                                |        | 2,782,226 |           |  |                 | 27,822 |        |  |   | 2,136,010 |          
|                             | Initial public offering  October 25,
	2000                    |        |           | 1,000,000 |  |                 |        | 10,000 |  |   |           | 4,037,849 | 
|                             |                                                                |        |           |           |  |                 |        |        |  |   |           |          
|Balance at December 31, 2000 |                                                                |        | 3,782,226 |           |  |                 | 37,822 |        |  |   | 6,173,859 |          
|                             | Private placement  June 5, 2001                               |        |           | 73,986    |  |                 |        | 740    |  |   |           | 374,877   | 
|                             | Acquisition PAX Technology Transfer,
	Ltd  September 28, 2001 |        |           | 59,460    |  |                 |        | 595    |  |   |           | 439,405   | 
|                             |                                                                |        |           |           |  |                 |        |        |  |   |           |          
|Balance at December 31, 2001 |                                                                |        | 3,915,672 |           |  | $               | 39,157 |        |  | $ | 6,988,141 |          
|                             |                                                                |        |           |           |  |                 |        |        |  |   |           |          

Pursuant to the IPO agreement, the Company issued
100,000 warrants on October 25, 2000 at $.0003 to the
underwriter, to purchase an equal number of shares of the
Companys common stock. These warrants are exercisable over
the next four years at $9.90 per share. The warrants expire on
October 25, 2005.

6. Stock Compensation, Employment
Agreements and Stock Options

The Company accounts for stock grants to
employees in exchange for services in accordance with APB
No 25, Accounting for Stock Issued to
Employees. Stock grants to non-employees in exchange for
services are accounted for in accordance with FAS 123,
Accounting for Stock-Based Compensation. Expenses
related to stock grants to employees and non-employees during
fiscal 2001, 2000, and 1999 amounted to $0, $0, and $204,000,
respectively.

Effective September 1, 1999, the Company
entered into five year employment agreements with its CEO and
President providing for an annual base salary of $150,000, and
$100,000, respectively, for their services. Effective February
20, 2001, the Company entered into a one year employment
agreement with its CFO providing for an annual base salary of
$90,000 for his services. Effective March 31, 2002 the CFO
resigned.

In the year ended December 31, 1999, the
Company reserved 750,000 shares of common stock for issuance in
connection with the stock option plans. The Company adopted an
incentive stock option plan in September 1999 (the 1999
Plan) and a non-qualified stock option plan in February
2000 (the 2000 Plan). Under the terms of the 1999
Plan, the Company is authorized to issue options to purchase up
to 500,000 shares of the Companys common stock. The
options are intended to be incentive stock options within the
meaning of Section 422 of the Internal Revenue Code (the
Code), however, options may be issued under the 1999
Plan that do not qualify for incentive treatment under the Code.
Under the terms of the 2000 Plan, the Company is authorized to
issue options to purchase up to 250,000 shares of the
Companys common stock. Under the 2000 Plan, the Company
may only issue options that do not qualify for incentive
treatment under Section 422 of the Code. The per share
exercise price of each stock option granted under the 1999 Plan
and the 2000 Plan must be equal to the quoted fair market value
of the stock on the date of grant, except in the case of a more
than 10% shareholder for which grants are exercisable at 110% of
fair market value of the stock on the date of grant. At
December 31, 2001, 448,000 options from the 1999 Plan had
been granted and 50,000 options from the 2000 Plan had been
granted.

Pursuant to SFAS No. 123 Accounting
for Stock-Based Compensation, the Company has elected to
account for its stock option plan under APB Opinion 25,
Accounting for Stock Issued to Employees, and

49



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##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

6. Stock Compensation, Employment
Agreements and Stock Options  (Continued)

adopt the disclosure-only provisions of SFAS
No. 123. Under APB 25, no compensation costs were
recognized relating to the option grants because the exercise
price of the options awarded was equal to the fair market price
of the common stock on the dates of grant. Under SFAS
No. 123, the net increase in net assets from operations
would have decreased by $197,692, or $0.05 per share, for the
year ended December 31, 2001.

The fair value of each option granted in 2001 was
estimated using the Black-Scholes option-pricing model with the
following assumptions:

|                        |  |  |                | 
|----------------------- |  |  | -------------- | 
|Expected dividend yield |  |  | 0.00%          | 
|Expected volatility     |  |  | 0.309          | 
|Risk-free interest      |  |  | 3.69% to 5.09% | 
|Expected term           |  |  | 5 years        | 

A summary of the Companys stock option
activity, and related information follows:

|                                                                |  |         |         |                  |  |   |      | 
|--------------------------------------------------------------- |  | ------- | ------- | ---------------- |  | - | ---- | 
|                                                                |  |         |         | Weighted-Average
|                                                                |  |         |         | Exercise Price  
|                                                                |  | Options |         | Per Share       
|                                                                |  |         |         |                 
|Outstanding  December 31, 1999                                 |  |         |        |                  |  | $ |     | 
|Granted                                                         |  |         | 240,000 |                  |  |   | 6.30 | 
|                                                                |  |         |         |                  |  |   |      | 
|Outstanding  December 31, 2000                                 |  |         | 240,000 |                  |  | $ | 6.30 | 
|Granted                                                         |  |         | 258,000 |                  |  |   | 7.02 | 
|Exercised                                                       |  |         |        |                  |  |   |     | 
|Canceled/expired                                                |  |         |        |                  |  |   |     | 
|                                                                |  |         |         |                  |  |   |      | 
|Outstanding  December 31, 2001                                 |  |         | 498,000 |                  |  | $ | 6.67 | 
|                                                                |  |         |         |                  |  |   |      | 
|Weighted-average fair value of options granted
	during the year |  |         |         |                  |  | $ | 2.51 | 
|                                                                |  |         |         |                  |  |   |      | 

50



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##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

6. Stock Compensation, Employment
Agreements and Stock Options  (Continued)

Approximately 205,750 options were exercisable at
December 31, 2001. The exercise price range of outstanding
options at December 31, 2001 follows:

|            |         |                 |  |            |      |             |  |  |      |  |  |  |         | 
|----------- | ------- | --------------- |  | ---------- | ---- | ----------- |  |  | ---- |  |  |  | ------- | 
|Outstanding |         | Exercise Price  |  |            |      | Exercisable
|Options     |         | Range Per Share |  | Expiration |      | Options    
|            |         |                 |  |            |      |            
|            | 85,000  |                 |  | $          | 6.00 |             |  |  | 2005 |  |  |  | 42,500  | 
|            | 55,000  |                 |  | $          | 6.13 |             |  |  | 2005 |  |  |  | 30,000  | 
|            | 100,000 |                 |  | $          | 6.60 |             |  |  | 2005 |  |  |  | 50,000  | 
|            | 20,000  |                 |  | $          | 5.75 |             |  |  | 2006 |  |  |  | 5,000   | 
|            | 2,000   |                 |  | $          | 7.50 |             |  |  | 2006 |  |  |  | 2,000   | 
|            | 55,000  |                 |  | $          | 7.00 |             |  |  | 2006 |  |  |  | 17,500  | 
|            | 7,000   |                 |  | $          | 7.41 |             |  |  | 2006 |  |  |  | 7,000   | 
|            | 5,000   |                 |  | $          | 7.65 |             |  |  | 2006 |  |  |  | 1,250   | 
|            | 4,000   |                 |  | $          | 7.53 |             |  |  | 2006 |  |  |  | 1,000   | 
|            | 5,000   |                 |  | $          | 7.51 |             |  |  | 2006 |  |  |  | 1,250   | 
|            | 125,000 |                 |  | $          | 7.40 |             |  |  | 2006 |  |  |  | 35,000  | 
|            | 5,000   |                 |  | $          | 7.75 |             |  |  | 2006 |  |  |  | 1,250   | 
|            | 5,000   |                 |  | $          | 7.45 |             |  |  | 2006 |  |  |  | 1,250   | 
|            | 2,500   |                 |  | $          | 7.23 |             |  |  | 2006 |  |  |  | 2,500   | 
|            | 3,500   |                 |  | $          | 7.13 |             |  |  | 2006 |  |  |  | 3,500   | 
|            | 4,000   |                 |  | $          | 7.05 |             |  |  | 2006 |  |  |  | 1,000   | 
|            | 5,000   |                 |  | $          | 7.09 |             |  |  | 2006 |  |  |  | 1,250   | 
|            | 10,000  |                 |  | $          | 7.25 |             |  |  | 2006 |  |  |  | 2,500   | 
|            |         |                 |  |            |      |             |  |  |      |  |  |  |         | 
|            | 498,000 |                 |  |            |      |             |  |  |      |  |  |  | 205,750 | 
|            |         |                 |  |            |      |             |  |  |      |  |  |  |         | 

The weighted-average remaining contractual life
of the outstanding options is approximately four years, and the
initial term for options is generally five years.

7. Commitments and
Contingencies

On September 10, 2001, the Company obtained
a revolving line of credit with a local financial institution.
This line of credit allows the Company to borrow up to $500,000,
with a rate of interest at .25 percentage points under
prime. The line of credit is due on demand and is secured by a
pledge of a portion of the Companys investments in
non-controlled affiliates. At December 31, 2001 the balance due
was $-0-.

On September 13, 2000, the Company obtained
a revolving line of credit with a local financial institution.
This line of credit in allows the Company to borrow up to
$150,000, with a rate of interest at the institutions
prime rate (9.5% at December 31, 2000). The line of credit
is due on demand and is secured by a pledge of a portion of the
Companys investments in non-controlled affiliates and the
personal guarantees of the chief executive officer, a director,
and a shareholder. The amount due to the bank at
December 31, 2000 was $39,975. The Company paid this line
of credit in full and cancelled the line in March 2001.

The Company has operating leases for its
corporate offices in the United States and the United Kingdom.
During fiscal year 2001, 2000, and 1999, rental expense related
to these leases was $20,275, $18,993, and $16,937, respectively.

51



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##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

7. Commitments and
Contingencies  (Continued)

At December 31, 2001, future minimum
payments under the operating lease is as follows:

|     |       |   |        |        | 
|---- | ----- | - | ------ | ------ | 
|2002 |       | $ | 36,458 |       
|2003 |       |   | 32,091 |       
|2004 |       |   | 4,748  |       
|     |       |   |        |       
|     | Total |   | $      | 73,297 | 
|     |       |   |        |       

8. Acquisition

On September 28, 2001, the Company acquired
the stock of PAX Technology Transfer Ltd., a United Kingdom
corporation. This acquisition was made with the issuance of
59,460 shares of unregistered common stock valued at $7.40 per
share. This acquisition has been accounted for under the
purchase method of accounting applying the provisions of
Statement of Financial Accounting Standards No. 141,
Business Combinations and accordingly, the operating
results have been included in the Companys consolidated
results of operations from the date of acquisition. The excess
of the consideration given over the fair value of net
identifiable assets acquired was approximately $431,000 and was
recorded as goodwill. None of the goodwill will be deductible
for income tax purposes.

9. Related Party Transactions

Carl Nisser, one of the Companys directors
was also associated with the Companys former counsel,
Gersten, Savage & Kaplowitz, LLP, with whom he served in an
of counsel capacity. In addition in connection with the October
2000 initial public offering, Mr. Nisser received
approximately 30% of the fees payable to Gersten,
Savage & Kaplowitz, LLP, (approximately $47,000).

Sam Reiber, the Companys General Counsel
and a director of the Company is also a partner with the law
firm Linsky & Reiber in Tampa, Florida.
Linsky & Reiber has received approximately $33,000 and
$67,000 in December 31, 2001 and 2000, respectively, in
compensation during the past fiscal year for services performed
for the Company and holds 6,100 shares of the Company stock.

10. Interim Financial Information
(Unaudited)

|                                                      |         |          |           |         |  |              |           |             |  |   |            |      |   |   |          |     | 
|----------------------------------------------------- | ------- | -------- | --------- | ------- |  | ------------ | --------- | ----------- |  | - | ---------- | ---- | - | - | -------- | --- | 
|Fiscal year 2001:                                     |         | March 31 |           | June 30 |  | September 30 |           | December 31
|                                                      |         |          |           |         |  |              |           |            
|Income from operations                                |         | $        | 1,492,535 |         |  | $            | 1,657,259 |             |  | $ | 599,986    |      |   | $ | 312,103  |    
|Net income from operations                            |         |          | 539,174   |         |  |              | 506,138   |             |  |   | 111,834    |      |   |   | (249,166 | )  
|Net increase in net assets from operations            |         |          | 753,353   |         |  |              | 610,834   |             |  |   | (1,458,815 | )    |   |   | 738,911  |    
|Net increase in net assets from operations per
	share |         |          |           |         |  |              |           |             |  |   |            |      |   |   |          |    
|                                                      | Basic   |          | $         | .20     |  |              | $         | .16         |  |   | $          | (.38 | ) |   | $        | .19 | 
|                                                      | Diluted |          | $         | .20     |  |              | $         | .16         |  |   | $          | (.38 | ) |   | $        | .19 | 

|                                                      |         |              |          |             |   |   |           |     | 
|----------------------------------------------------- | ------- | ------------ | -------- | ----------- | - | - | --------- | --- | 
|Fiscal year 2000:                                     |         | September 30 |          | December 31
|                                                      |         |              |          |            
|Income from operations                                |         | $            | 456,926  |             |   | $ | 2,196,256 |    
|Net income from operations                            |         |              | 153,790  |             |   |   | 914,036   |    
|Net increase in net assets from operations            |         |              | (356,619 | )           |   |   | 721,912   |    
|Net increase in net assets from operations per
	share |         |              |          |             |   |   |           |    
|                                                      | Basic   |              | $        | (.13        | ) |   | $         | .24 | 
|                                                      | Diluted |              | $        | (.13        | ) |   | $         | .24 | 

52



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##### 



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

11. Subsequent Events
(unaudited)

Charles Pope resigned as our Chief Financial
Officer effective March 31, 2002.

On March 25, 2002, our shares of common
stock commenced trading on the American Stock Exchange (AMEX)
under the symbol UTK. In conjunction with our move
to AMEX, our common stock no longer trades on the Nasdaq Small
Cap Market.

53



---



##### 



SELECTED PER SHARE DATA AND RATIOS

|                                                                       |                                                                                                |                        |           |      |   |      |           |      |   |      |           |      |   |   |           |     |  |   |           |     | 
|---------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------- | --------- | ---- | - | ---- | --------- | ---- | - | ---- | --------- | ---- | - | - | --------- | --- |  | - | --------- | --- | 
|                                                                       |                                                                                                |                       
|                                                                       |                                                                                                | Year Ended December 31
|                                                                       |                                                                                                |                       
|                                                                       |                                                                                                | 2001                   |           | 2000 |   | 1999 |           | 1998 |   | 1997
|                                                                       |                                                                                                |                        |           |      |   |      |           |      |   |     
|Per share information                                                  |                                                                                                |                        |           |      |   |      |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|Net asset value, beginning of year                                     |                                                                                                | $                      | 2.24      |      |   | $    | 1.18      |      |   | $    | 0.56      |      |   | $ | .02       |     |  | $ |          |    
|                                                                       | Net increase from operations(1)                                                                |                        |           | .23  |   |      |           | 0.56 |   |      |           | 0.10 |   |   |           | .05 |  |   |           |    | 
|                                                                       | Net change in realized and unrealized
	appreciation/ depreciation on investments (after taxes) |                        |           | (.14 | ) |      |           | (.87 | ) |      |           | (.04 | ) |   |           | .23 |  |   |           |    | 
|                                                                       | Foreign currency translation adjustment                                                        |                        |           | (.01 | ) |      |           |     |   |      |           |     |   |   |           |    |  |   |           |    | 
|                                                                       | Net increase from stock transactions                                                           |                        |           | .21  |   |      |           | 1.37 |   |      |           | 0.56 |   |   |           | .26 |  |   |           | .02 | 
|                                                                       |                                                                                                |                        |           |      |   |      |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|Net asset value, end of year                                           |                                                                                                | $                      | 2.53      |      |   | $    | 2.24      |      |   | $    | 1.18      |      |   | $ | .56       |     |  | $ | .02       |    
|                                                                       |                                                                                                |                        |           |      |   |      |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|Per share market value, end of year(2)                                 |                                                                                                | $                      | 7.10      |      |   | $    | 5.75      |      |   |      | N/A       |      |   |   | N/A       |     |  |   | N/A       |    
|Ratios/supplemental data                                               |                                                                                                |                        |           |      |   |      |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|Net assets, end of year                                                |                                                                                                | $                      | 9,909,440 |      |   | $    | 8,455,002 |      |   | $    | 3,284,453 |      |   | $ | 1,365,647 |     |  | $ | 31,708    |    
|Ratio of expenses to average net assets(3)                             |                                                                                                |                        | 28        | %    |   |      | 32        | %    |   |      | 31        | %    |   |   | 31        | %   |  |   | 32        | %  
|Ratio of net income to average net assets                              |                                                                                                |                        | 10        | %    |   |      | 29        | %    |   |      | 12        | %    |   |   | 15        | %   |  |   | (32       | )% 
|Diluted weighted average number of shares
	outstanding during the year |                                                                                                |                        | 3,882,914 |      |   |      | 2,968,720 |      |   |      | 2,682,420 |      |   |   | 2,304,691 |     |  |   | 2,070,494 |    






|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(1) | Calculated based on diluted weighted average
	number of shares outstanding during the year.
|(2) | Not applicable - Prior to public offering of
	shares.                                      
|(3) | Excluding income taxes.                                                                    






|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with
	Accountants on Accounting and Financial
	Disclosures

None.




PART III




Item 10.     Directors
and Executive Officers of the Registrant

The information set forth under the caption
ELECTION OF DIRECTORS, and SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE in the
Companys Proxy Statement for the 2002 Annual Meeting of
Stockholders to be filed pursuant to Regulation 14A under
the Securities Exchange Act of 1934 within 120 days from the
fiscal year end, is incorporated herein by reference.




Item 11.     Executive
Compensation

The information set forth under the caption
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS, in
the Companys Proxy Statement for the 2002 Annual Meeting
of Stockholders to be filed pursuant to Regulation 14A
under the Securities Exchange Act of 1934 within 120 days
from the fiscal year end, is incorporated herein by reference.




Item 12.     Security
Ownership of Certain Beneficial Owners and
Management

The information set forth under the caption
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS, in the Companys definitive Proxy Statement
for the 2002 Annual Meeting of Stockholders to be filed pursuant
to Regulation 14A under the Securities Exchange Act of 1934
within 120 days from the fiscal year end, is incorporated
herein by reference.

54



---



##### 






Item 13.     Certain
Relationships and Related Transactions

The information set forth under the caption
CERTAIN TRANSACTIONS in the Companys Proxy
Statement for the 2002 Annual Meeting of Stockholders to be
filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 within 120 days from the fiscal year
end, is incorporated herein by reference.




PART IV




Item 14.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K

(a) The following documents are filed as
part of this report:



| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | 1. Financial Statements  The
	following financial statements of the Company are contained in
	Item 8 of this Form 10-K:



| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | Consolidated Balance Sheets  At
	December 31, 2001 and 2000                                                    
|
| |  | Consolidated Statements of Operations 
	For the fiscal years ended December 31, 2001, 2000 and 1999            
|
| |  | Consolidated Statements of Cash Flows 
	For the fiscal years ended December 31, 2001, 2000 and 1999            
|
| |  | Consolidated Statements of Changes in Net
	Assets  For the fiscal years ended December 31,
	2001, 2000 and 1999
|
| |  | Schedule of Investments  For the
	fiscal years ended December 31, 2001 and 2000                                
|
| |  | Notes to the Financial Statements                                                                               
|
| |  | Selected Per Share Data and Ratios for the years
	ended December 31, 2001, 2000, 1999, 1998, and 1997           
|
| |  | Report of Independent Certified Public Accountants                                                              



| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. Financial Statement Schedules were
	omitted as they are not required or are not applicable, or the
	required information is included in the Financial Statements.
|
| | 3. Exhibits                                                                                                                                                         

a.   The following exhibits are
filed with this report or are incorporated herein by reference
to a prior filing, in accordance with Rule 12b-32 under the
Securities Exchange Act of 1934.

|           |  |   |  |                                                                                                                                                                                     
|---------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.(i)(1)   |  |  |  | Certificate of Incorporation, dated July 6,
	1999, as filed and recorded with the Secretary of State of the
	State of Delaware on July 13, 1999.                                    
|3.(ii)(2)  |  |  |  | Certificate of Amendment to Certificate of
	Incorporation, dated October 14, 1999, as filed and
	recorded with the Secretary of State of the State of Delaware on
	October 15, 1999.
|3.(iii)(3) |  |  |  | By-Laws of UTEK Corporation.                                                                                                                                                        
|3.(iv)*    |  |  |  | Certificate of Amendment to Certificate of
	Incorporation dated October 14, 1999, as filed and recorded
	with the Secretary of State of the State of Delaware on
	July 24, 2001.    
|4.1(4)     |  |  |  | Form of Representatives Warrant.                                                                                                                                                   
|4.2(5)     |  |  |  | Certificate of Merger of UTEK Corporation and
	UTEK LLC, dated October 18, 1999, as filed and recorded
	with the Secretary of State of the State of Delaware on
	October 25, 1999.  
|4.3(6)     |  |  |  | Specimen Common Stock Certificate.                                                                                                                                                  
|10.1(7)    |  |  |  | Form of Financial Consulting Agreement between
	UTEK Corporation and Schneider Securities, Inc.                                                                                     

55



---



##### 



|           |  |   |  |                                                                                                                                                 
|---------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|10.2(8)    |  |  |  | 1999 Incentive Stock Option Plan, as corrected.                                                                                                 
|10.3(9)    |  |  |  | 2000 Non-Qualified Stock Option Plan, as
	corrected.                                                                                            
|10.4(10)   |  |  |  | Employment Agreement with Clifford M. Gross.                                                                                                    
|10.5(11)   |  |  |  | Employment Agreement with Uwe Reischl.                                                                                                          
|10.6(12)   |  |  |  | Agreement dated January 30, 1998 between
	UTEK Corporation and the University of South Florida.                                                 
|10.7(13)   |  |  |  | Master Agreement dated June 18, 1999 between
	UTEK Corporation and Johns Hopkins University.                                                    
|10.8(14)   |  |  |  | Strategic Alliance dated November 3, 1999
	between UTEK Corporation and Fraunhofer Institute for
	Interfacial Engineering and Biotechnology IGB.
|10.9(15)   |  |  |  | Strategic Alliance dated October 18, 1999
	between UTEK Corporation and University of Florida.                                                  
|10.10(16)  |  |  |  | Services Agreement dated May 18, 1998
	between UTEK Corporation and the University of Memphis.                                                  
|10.11.(17) |  |  |  | Consulting Agreement between UTEK Corporation and
	NuElectric Corporation, dated November 16, 1998.                                             
|10.12(18)  |  |  |  | Consulting Agreement between UTEK Corporation and
	Darby Group Companies, dated May 3, 1999.                                                    
|10.13(19)  |  |  |  | License Agreement dated July 13, 1999
	between The Regents of the University of California and
	E. Coli Measurement Systems, Inc.               
|10.14(20)  |  |  |  | License Agreement dated January 1, 1999
	between Clean Water Technologies, Inc. and the University of
	South Florida Research Foundation, Inc.  
|10.15(21)  |  |  |  | Sponsored Research Agreement dated
	February 12, 1999 between Advanced Reinforcing
	Technologies, Inc. and Cornell University.                  
|10.16(22)  |  |  |  | License Agreement between Cornell Research
	Foundation, Inc. and Advanced Reinforcing Technologies, Inc.
	dated March 1, 1999.                  
|10.17(23)  |  |  |  | License Agreement dated December 15, 1999
	between the California Institute of Technology and Digital
	Personnel, Inc.                          
|10.18(24)  |  |  |  | License Agreement dated September 1999 between
	Safe Water Technologies, Inc. and University of South Florida
	Research Foundation, Inc.        
|10.19(25)  |  |  |  | Strategic Alliance dated December 13, 1999
	between UTEK Corporation and Virginia Tech Intellectual
	Properties, Inc.                           
|10.20(26)  |  |  |  | Agreement and Plan of Merger dated March 21,
	2000 between UTEK Corporation, Digital Personnel, Inc. and
	Graphco-DPI Holding Company, Inc.     
|10.21(27)  |  |  |  | License Agreement dated as of March 28, 2000
	between Johns Hopkins University and Zorax, Inc.                                                  
|10.22(28)  |  |  |  | Sponsored Research Agreement dated March 31,
	2000 between Johns Hopkins University and Zorax, Inc.                                             
|10.23(29)  |  |  |  | Strategic Alliance dated December 23, 1999
	between UTEK Corporation and Florida State University Research
	Foundation.                         
|10.24(30)  |  |  |  | Strategic Alliance dated March, 23, 2000 between
	UTEK Corporation and Florida Institute of Technology.                                         
|10.25(31)  |  |  |  | Strategic Alliance dated April 14, 2000
	between UTEK Corporation and Sopartec.                                                                 
|10.26(32)  |  |  |  | Strategic Alliance dated June 1, 2000
	between UTEK Corporation and Auburn University.                                                          
|10.27(33)  |  |  |  | Commercial Pledge and Security Agreement dated
	September 13, 2000 between UEK Corporation and The Bank of
	Tampa.                              

56



---



##### 



|          |  |   |  |                                                                                                                               
|--------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------
|10.28(34) |  |  |  | Merger Agreement dated September 21, 2000
	between UTEK Corporation, NuElectric Corporation. and Zorax, Inc.                  
|10.29(35) |  |  |  | Merger Agreement dated November 29, 2000
	between UTEK Corporation, Torvec, Inc., and Ice Surface
	Development, Inc.          
|10.30(36) |  |  |  | Safekeeping Agreement dated December 12,
	2000 between UTEK Corporation and Bank of Tampa.                                    
|10.31(37) |  |  |  | Corporate Custody Agreement dated
	November 27, 2000 between UTEK Corporation and Bank of
	Tampa.                             
|10.32(38) |  |  |  | License Agreement dated as of February 9,
	2000 between Dartmouth College and Technology Development, Inc.                    
|10.33(39) |  |  |  | Strategic Alliance dated December 14, 2000
	between UTEK Corporation and Dartmouth College.                                   
|10.34(40) |  |  |  | Merger Agreement dated February 19, 2000,
	between UTEK Corporation, Technology Development, Inc. and The
	Quantum Group, Inc.
|10.35(41) |  |  |  | Marketing Agreement dated April 15, 1999
	between UTEK Corporation and Wolfram Weinsheimer.                                   
|10.36(42) |  |  |  | Amendment dated March 28, 2000 to the
	Marketing Agreement between UTEK Corporation and Wolfram
	Weinsheimer.                 
|10.37(43) |  |  |  | Marketing Agreement dated December 8, 1998
	between UTEK Corporation and Seth Frielich.                                       
|10.38(44) |  |  |  | Amendment dated March 28, 2000 to the
	Marketing Agreement between UTEK Corporation and Seth Frielich.                        
|10.39(45) |  |  |  | Marketing Agreement dated January 26, 1999
	between UTEK Corporation and Gerald Krueger.                                      
|10.40(46) |  |  |  | Amendment dated March 29, 2000 to the
	Marketing Agreement between UTEK Corporation and Gerald Krueger.                       
|10.41(47) |  |  |  | Marketing Agreement dated November 6, 2000
	between UTEK Corporation and GunnAllen Financial.                                 
|10.42(48) |  |  |  | Marketing Agreement dated January 10, 2001
	between UTEK Corporation and Schneider Securities, Inc.                           
|10.43(49) |  |  |  | Employment Agreement with Charles Pope.                                                                                       
|10.44(50) |  |  |  | Extension of Agreement dated January 10,
	1998 between UTEK Corporation and the University of South
	Florida.                 
|10.45(51) |  |  |  | Stock Purchase Agreement dated September 28,
	2001 between UTEK Corporation and PAX Technology Transfer, Ltd.                 
|10.46(52) |  |  |  | Strategic Alliance Agreement dated
	August 14, 2001 between UTEK Corporation and Bitzmart, Inc.                               
|10.47*    |  |  |  | Revolving Line of Credit dated September 10,
	2001 between UTEK Corporation and The Bank of Tampa.                            
|24.1      |  |  |  | Powers of Attorney (included on signature page).                                                                              
|99(53)    |  |  |  | Code of Ethics of UTEK Corporation.                                                                                           






| |   |                
| | - | ---------------
| | * | Filed Herewith.

|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to Exhibit 3.1 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(2) | Incorporated by reference to Exhibit 3.2 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).

57



---



##### 



|    |                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Incorporated by reference to Exhibit 3.3 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(4) | Incorporated by reference to Exhibit 4.1 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(5) | Incorporated by reference to Exhibit 4.2 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(6) | Incorporated by reference to Exhibit 4.3 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(7) | Incorporated by reference to Exhibit 10.1 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(8) | Incorporated by reference to Exhibit 10.2 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(9) | Incorporated by reference to Exhibit 10.3 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).

|     |                                                                                                                                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to Exhibit 10.4 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(11) | Incorporated by reference to Exhibit 10.5 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(12) | Incorporated by reference to Exhibit 10.6 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(13) | Incorporated by reference to Exhibit 10.7 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(14) | Incorporated by reference to Exhibit 10.8 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(15) | Incorporated by reference to Exhibit 10.9 to
	the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913). 
|(16) | Incorporated by reference to Exhibit 10.10
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(17) | Incorporated by reference to Exhibit 10.11
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(18) | Incorporated by reference to Exhibit 10.12
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(19) | Incorporated by reference to Exhibit 10.13
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(20) | Incorporated by reference to Exhibit 10.14
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(21) | Incorporated by reference to Exhibit 10.15
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(22) | Incorporated by reference to Exhibit 10.16
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(23) | Incorporated by reference to Exhibit 10.17
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(24) | Incorporated by reference to Exhibit 10.18
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(25) | Incorporated by reference to Exhibit 10.19
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(26) | Incorporated by reference to Exhibit 10.20
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(27) | Incorporated by reference to Exhibit 10.21
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(28) | Incorporated by reference to Exhibit 10.22
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).

58



---



##### 



|     |                                                                                                                                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(29) | Incorporated by reference to Exhibit 10.23
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(30) | Incorporated by reference to Exhibit 10.24
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(31) | Incorporated by reference to Exhibit 10.25
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(32) | Incorporated by reference to Exhibit 10.26
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(33) | Incorporated by reference to Exhibit 10.27
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(34) | Incorporated by reference to Exhibit 10.28
	to the Companys registration statement on Form N-2A
	filed with the Commission on October 2, 2000 (File
	No. 333-93913).
|(35) | Incorporated by reference to Exhibit 10.1 to
	the Companys report on Form 10-Q for the quarter
	ended September 30, 2000.                                           
|(36) | Incorporated by reference to Exhibit 10.30
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(37) | Incorporated by reference to Exhibit 10.31
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(38) | Incorporated by reference to Exhibit 10.32
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(39) | Incorporated by reference to Exhibit 10.33
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(40) | Incorporated by reference to Exhibit 2 to
	the Companys report on Form 8-K filed on
	March 6, 2001.                                                                 
|(41) | Incorporated by reference to Exhibit 10.35
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(42) | Incorporated by reference to Exhibit 10.36
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(43) | Incorporated by reference to Exhibit 10.37
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(44) | Incorporated by reference to Exhibit 10.38
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(45) | Incorporated by reference to Exhibit 10.39
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(46) | Incorporated by reference to Exhibit 10.40
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(47) | Incorporated by reference to Exhibit 10.41
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(48) | Incorporated by reference to Exhibit 10.42
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(49) | Incorporated by reference to Exhibit 10.43
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(50) | Incorporated by reference to Exhibit 10.44
	to the Companys report on Form 10-K for the year
	ended December 31, 2000.                                              
|(51) | Incorporated by reference to Exhibit 10.45
	to the Companys report on Form 10-K for the year
	ended September 30, 2001.                                             
|(52) | Incorporated by reference to Exhibit 10.46
	to the Companys report on Form 10-K for the year
	ended September 30, 2001.                                             
|(53) | Incorporated by reference to Exhibit 99 to
	the Companys report on Form 10-K for the year ended
	December 31, 2000.                                                 






|   |                                                                                              
|-- | ---------------------------------------------------------------------------------------------
|b. | No reports on Form 8-K were filed by the
	Company during the quarter ended December 31, 2001.

|   |                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|c. | Financial Statement Schedules were omitted, as
	they are not required or not applicable, or the required
	information is included in the consolidated financial statements
	and/ or related notes.

59



---



##### 






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized on March 29, 2002.



| |                 
| | ----------------
| | UTEK CORPORATION



| |     |                      
| | --- | ---------------------
| | By: | /s/ CLIFFORD M. GROSS

| |                        
| | -----------------------
| |                        
| | Clifford M. Gross      
| | Chief Executive Officer

Pursuant to the requirements of the Securities
Exchange Act of 1934, this Report has been signed below by the
following persons on behalf of the Registrant in the capacities
and on the dates indicated.

|                                                   |  |                                                                     |  |               
|-------------------------------------------------- |  | ------------------------------------------------------------------- |  | --------------
|                                                   |  | Title                                                               |  |               
|Signature                                          |  | (Capacity)                                                          |  | Date          
|                                                   |  |                                                                     |  |               
|                                                  
|/s/ CLIFFORD M. GROSSClifford M. Gross             |  | Chairman and Chief Executive Officer (Principal
	Executive Officer) |  | March 29, 2002
|/s/ UWE REISCHLUwe Reischl                         |  | President                                                           |  | March 29, 2002
|/s/ CAROLE R. MASONCarole R. Mason                 |  | Controller (Principal Accounting Officer)                           |  | March 29, 2002
|/s/ CHARLES POPECharles Pope                       |  | Chief Financial Officer (Principal Financial
	Officer)              |  | March 29, 2002
|/s/ SAM REIBERSam Reiber                           |  | Director                                                            |  | March 29, 2002
|/s/ STUART M. BROOKSStuart M. Brooks               |  | Director                                                            |  | March 29, 2002
|/s/ KWABENA GYIMAH-BREMPONGKwabena Gyimah-Brempong |  | Director                                                            |  | March 29, 2002
|/s/ ARTHUR CHAPNIKArthur Chapnik                   |  | Director                                                            |  | March 29, 2002
|/s/ CARL NISSERCarl Nisser                         |  | Director                                                            |  | March 29, 2002
|/s/ JOHN MICEKJohn Micek                           |  | Director                                                            |  | March 29, 2002

60



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##### 






EXHIBIT INDEX

The following exhibits are filed with this report
in accordance with Rule 12b-32 under the Securities Exchange Act
of 1934.

|        |       |     |  |             |  |                                                                                                                                                                                 
|------- | ----- | --- |  | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |     |  |            
|No.     |       |     |  | Description
|        |       |     |  |            
|        | 3(iv) |     |  |            |  | Certificate of Amendment to Certificate of
	Incorporation dated October 14, 1999, as filed and recorded
	with the Secretary of State of the State of Delaware on
	July 24, 2001.
|        | 10    | .47 |  |            |  | Revolving Line of Credit dated September 10,
	2001 between UTEK Corporation and The Bank of Tampa.                                                                              

61