UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549




---

FORM 10-K

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

THE SECURITIES EXCHANGE ACT OF 1934




---

(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, 2000                                            

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                     |  | 33566                             
|(Address of principal executive office)                   |  | (Zip Code)                        

Registrants telephone number, including area
code:  (813) 754-4330

Securities registered pursuant to Section 12(b) of the Act:

|                    |  |                         
|------------------- |  | ------------------------
|                    |  | Name of Each Exchange on
|Title of Each Class |  | Which Registered        
|                    |  |                         
|None                |  | None                    

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, $.01 par value

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 
     NO

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
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.

The aggregate market value of the registrants common stock
held by non-affiliates of the registrant as of March 14,
2000 was approximately $12,844,804 based upon the last sale
price for the registrants common stock on that date. As of
March 14, 2001 there were 3,782,226 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.









---



TABLE OF CONTENTS

|              |  |                                                                                        |  |   
|------------- |  | -------------------------------------------------------------------------------------- |  | --
|PART I       
|             
|             
|             
|             
|Item 1.       |  | Business of the Company                                                                |  | 1 
|             
|             
|             
|             
|Item 2.       |  | Properties                                                                             |  | 22
|             
|             
|             
|             
|Item 3.       |  | Legal Proceedings                                                                      |  | 22
|             
|             
|             
|             
|Item 4.       |  | Submission of Matters to a Vote of Security Holders                                    |  | 22
|PART II      
|             
|             
|             
|             
|Item 5.       |  | Market for Registrants Common Equity and Related
	Stockholder Matters                 |  | 23
|             
|             
|             
|             
|Item 6.       |  | Selected Financial Data                                                                |  | 24
|             
|             
|             
|             
|Item 7.       |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |  | 24
|             
|             
|             
|             
|Item 7A.      |  | Quantitative and Qualitative Disclosure About Market Risk                              |  | 30
|             
|             
|             
|             
|Item 8.       |  | Financial Statements and Supplementary Data                                            |  | 32
|             
|             
|             
|             
|Item 9.       |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosures |  | 49
|PART III     
|             
|             
|             
|             
|Item 10.      |  | Directors and Executive Officers of the Registrant                                     |  | 49
|             
|             
|             
|             
|Item 11.      |  | Executive Compensation                                                                 |  | 49
|             
|             
|             
|             
|Item 12.      |  | Security Ownership of Certain Beneficial Owners and Management                         |  | 49
|             
|             
|             
|             
|Item 13.      |  | Certain Relationships and Related Transactions                                         |  | 50
|PART IV      
|             
|             
|             
|             
|Item 14.      |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                       |  | 50
|             
|             
|             
|             
|SIGNATURES    |  | 55                                                                                    
|             
|             
|             
|             
|EXHIBIT INDEX |  | 56                                                                                    

i



---



PART I

Item  1.     Business of the
Company

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 our election to operate as a BDC, we
were engaged in the business of technology transfer as an
operating company.

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 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 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 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 in their business of researching,
identifying and developing new technologies and markets. We also
assist them in acquiring the licenses to new 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 who will acquire the portfolio company from us in
exchange for common stock.

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 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 and, in some cases, to fund additional

1



---





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 acquired
and 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 U2BSM
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.

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SM. Using our U2BSM
investment model, we intend to acquire securities in portfolio
companies and eventually exchange those securities primarily for
securities in public 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.
|
| | 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 in the private
sector. We believe that

2



---





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 essential 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.

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 have been less than that amount.
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
achieve some form of liquidity for our portfolio investments by
selling our portfolio companies primarily to public companies.

Identifying New Technologies

We have developed relationships with a number of universities in
the United States that actively conduct research. In order to
provide us early access to new technologies, we have entered
into alliances, licensing or license option 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 deem it appropriate,
to enter into license option agreements with the university
providing our company with the exclusive right to seek a
licensee or other commercial opportunity for the technology,
provided mutually agreeable terms are reached, for a

3



---







| |   |                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------
| |  | 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
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 pursuant to which we have agreed to review certain
technologies developed at Fraunhofer to gauge their potential
for successful commercialization in the United States. Pursuant
to the agreement, Fraunhofer will 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

4



---





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.

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 to
review certain technologies developed at the Universite
Catholique de Louvain 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 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 June 2000, we entered into an agreement with California
Institute of Technology (also known as Caltech) to review its
intellectual property and technologies to gauge their potential
for successful commercialization. Under the agreement,
California Institute of Technology may grant us a 12-month
exclusive, 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 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 commercializa-

5



---





The term of the agreement is five years but may be terminated by
either party on 60 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 new 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            
|
| |  | 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 they 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 use in the
field of work of acquirers of our portfolio companies. These
licenses 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
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.

Uwe Reischl serves as the executive director of the Scientific
Advisory Council. Our Scientific Advisory Council currently
consists 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,            |  | Cell biology/Nobel             
|                           |  | Rockefeller University              |  | Prize winner in                
|                           |  |                                     |  | Medicine (1999).               
|                          
|Alain M. Boudet, Ph.D.     |  | Professor, University of Paul       |  | Cell and molecular plant       
|                           |  | Sabatier                            |  | biology.                       
|                          
|Russell Brantman, Ph.D.    |  | Consultant                          |  | Systems                        
|                           |  |                                     |  | Engineering/Vehicle safety     
|                           |  |                                     |  | analysis.                      
|                          
|Tzann T. Fang, M.D.        |  | Physician, Midwestern Regional      |  | Medical oncology/Internal      
|                           |  | Medical Center                      |  | medicine/Hematology.           
|                          
|Walter Kohn, Ph.D.         |  | Professor, University of California |  | Semiconductors and             
|                           |  |                                     |  | Super Conductivity             
|                           |  |                                     |  | of materials/Nobel             
|                           |  |                                     |  | Prize winner in                
|                           |  |                                     |  | Chemistry (1998).              

6



---



|                             |  |                                     |  |                                                                                       
|---------------------------- |  | ----------------------------------- |  | --------------------------------------------------------------------------------------
|Name                         |  | Title                               |  | Expertise                                                                             
|                             |  |                                     |  |                                                                                       
|Gerald Krueger, Ph.D., CPE   |  | Principal Scientist/Ergonomist,     |  | Human performance enhancement/                                                        
|                             |  | Col. U.S. Army (retired)            |  | Human systems design.                                                                 
|Jean-Marie Lehn, Ph.D.       |  | Professor, College de France,       |  | Nanotechnologies/Nobel                                                                
|                             |  | Strasbourg, France                  |  | Prize winner in Chemistry                                                             
|                             |  |                                     |  | (1987).                                                                               
|                            
|Yun-Fan Liaw, M.D.           |  | Professor, Chang Gung Medical       |  | Gastroenterology/Hepatology.                                                          
|                             |  | College                             |  |                                                                                       
|                            
|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 and Dean             |  | Molecular chemistry.                                                                  
|                             |  | of Research                         |  |                                                                                       
|                             |  | University of Akron                 |  |                                                                                       
|                            
|Charles Proctor, Ph.D., P.E. |  | Senior Managing Engineer,           |  | Safety and Human                                                                      
|                             |  | Exponent, Inc.                      |  | Factors Engineering.                                                                  
|                            
|Peter Reischl, Ph.D.         |  | Professor, San Jose State           |  | Electrical engineering/                                                               
|                             |  | University                          |  | High frequency energy                                                                 
|                             |  |                                     |  | conversion.                                                                           
|                            
|Brian B. Schwartz, Ph.D.     |  | Professor, Graduate School of       |  | Physics and material science.                                                         
|                             |  | the City University of New York     |  |                                                                                       
|                            
|Dean Sheppard, M.D.          |  | Professor, University of California |  | Molecular biology.                                                                    
|                             |  |  San Francisco                     |  |                                                                                       
|                            
|Michael Zaworotko, Ph.D.     |  | Professor, University of            |  | Nanotechnology/                                                                       
|                             |  | South Florida                       |  | Crystal engineering/                                                                  
|                             |  |                                     |  | X-ray crystallography.                                                                

In addition to the Scientific Advisory Council, we have in place
a European Advisory Council for the purpose of developing
business in Europe for us. We are also considering additional
strategies for developing business and university alliances in
Europe. The Company considers all of its efforts to date to be
preliminary. Our European Advisory Council consists of the
following members:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bo Hjelt. Mr. Hjelt was educated at Indiana
	University, Geneva University (HEC), and IMI Geneva (MBA). He is
	the Chairman of Corporate Development International, which he
	founded in 1973. Mr. Hjelt is also the member of several
	boards of directors, and serves on the Board of the
	International Federation for Hydrocephalus and Spina Bifida.                                                                                                                                                                           
|
| | Lord Chesham. Lord Chesham was educated at Eton College,
	Qualified Chartered Accountant. He was the Former Finance
	Director of Bowater Corporation of Australia. He was appointed
	Deputy Chief Whip of the House of Lords, 1995-97.                                                                                                                                                                                                                                                                                              
|
| | Professor Marcel Crochet, Ph.D. Professor Crochet was
	educated at the University of Louvain and the University of
	California at Berkeley. He was appointed Rector of the Catholic
	University of Louvain-la-neuve in 1995. Prior to this he served
	as Chairman of the Department of Mechanical Engineering and Dean
	of Engineering at the University of Louvain. Professor Crochet
	is the author of 140 scientific publications in the field of
	fluid mechanics and is on the editorial board of several
	scientific journals.

7



---



| |                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Dr. Crochet has also served as the chief executive officer
	of POLYFLOW Corporation. He has received numerous international
	awards recognizing his work in technology innovation.                                                                                                                                                                       
|
| | Jonas Lonnroth, M.D. Dr. Lonnroth was educated at
	Davidson College, N.C. and at the medical facility of the
	University of Uppsala, Sweden. He completed studies in Russian
	and law, and is a specialist in ear, nose and throat surgery.
	Dr. Lonnroth speaks eight languages, and holds a patent in
	compass technology.                             
|
| | Lupold von Wedel. Mr. von Wedel was educated in
	Paris at the Institut des Hautes Etudes Internationales and
	studied law at Freiburg University. He began his business career
	with Hoechst AG as regional manager. Mr. von Wedel was
	managing director of Logika AG, a diversified services firm that
	provides senior management support to industry.

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, 2000, with a brief description of their
business:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Microsphere Technologies, Inc. is a development stage
	company that is currently seeking to acquire licenses to new
	materials science technologies. We own 100% of the common stock
	of Microsphere Technologies, Inc. We have invested $5,000 in
	Microsphere Technologies, Inc. as of December 31, 2000. Uwe
	Reischl is the sole director and president of Microsphere
	Technologies.                                                                         
|
| | Technology Development, Inc. is a development stage
	company that is seeking to acquire de-icing technology for
	roadways and other ground-based surfaces. We own 100% of the
	common stock of Technology Development, Inc. We have invested
	$150 in Technology Development, Inc. as of December 31,
	2000. Clifford M. Gross is the sole director and president of
	Technology Development, Inc.                                                                
|
| | Ocular Technologies, Inc.(formerly Advanced
	Desalination Technologies, Inc.) is a development stage
	company that is seeking to acquire eye-scanning technologies. We
	own 100% of the common stock of Ocular Technologies, Inc. We
	have invested $150 in Ocular Technologies, Inc. as of
	December 31, 2000. Uwe Reischl is the sole director and
	president of Ocular Technologies, Inc.                                                                      
|
| | Doppler Tomography International, Inc. is a development
	stage company that is seeking to acquire new technologies for
	the non-invasive analysis of body tissue. We own 100% of the
	common stock of Doppler Tomography. We have invested $750 in
	Doppler Tomography as of December 31, 2000. Uwe Reischl is
	the sole director and president of Doppler Tomography.                                                                                            
|
| | XGR Imaging, Inc., is a development stage company that is
	currently seeking to acquire licenses to new imaging
	technologies. We own 100% of the issued and outstanding common
	stock of XGR Imaging, Inc. We have invested $250 in XGR Imaging,
	Inc. as of December 31, 2000. Uwe Reischl is the sole
	director and president of XGR Imaging, Inc.                                                                                                             
|
| | Composite Springs Technologies, Inc. (formerly
	Advanced Measurement Systems, Inc.) is a development
	stage company that is currently seeking to acquire licenses to
	new material science technologies. We own 100% of the common
	stock of Composite Springs Technologies, Inc. We have invested
	$250 in Composite Springs Technologies, Inc. as of
	December 31, 2000. Uwe Reischl is the sole director and
	president of Composite Springs Technologies, Inc.
|
| | Voice Tech Worldwide, Inc., is a development stage
	company that is seeking to acquire a license to information
	management technologies. Pursuant to the terms of the technology
	license agreement between the Company and the university, the
	technology that we had licensed reverted back to the university,
	as we did not sell Voice Tech Worldwide, Inc. We own 100% of the
	common stock of Voice                                                       

8



---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Tech Worldwide, Inc. We have invested $229 in Voice Tech
	Worldwide, Inc. as of December 31, 2000. Uwe Reischl is the
	sole director and president of Voice Tech Worldwide, Inc.                                                                                                                                                                                                                                                                                                                                                                                
|
| | Universal Keypad, Inc., is a development stage company
	that is seeking to acquire a license to advanced interface
	technologies. Pursuant to the terms of the technology license
	agreement between the Company and the inventor, the technology
	that we had licensed reverted back to the inventor, as we did
	not sell Universal Keypad, Inc. We own 100% of the common stock
	of Universal Keypad, Inc. We have invested $250 in Universal
	Keypad, Inc. as of December 31, 2000. Uwe Reischl is the sole
	director and president of Universal Keypad, Inc.

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 acquirors 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 companies transfer to the acquiror, and the acquiror
assumes all obligations under the license agreements. Most of
our merger transactions to date have been with private companies
whose common stock is not publicly traded. However, as a result
of merger transactions, the Company has acquired shares of
public companies, including Lexon, Inc., The Quantum Group,
Inc., NuElectric Corporation, and Torvec, Inc. Our goal is to
engage in merger transactions primarily with public companies.

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 therefrom. As
a result, our ability to sell or otherwise transfer the
securities we hold in our portfolio will be limited.

Our management and staff have primary responsibility for
locating suitable merger partners. However, we have five
independent marketing representatives with diverse backgrounds
offering varied expertise for the purpose of assisting us in
locating promising prospects for mergers. Our current marketing
representatives include: GunnAllen Financial, Schneider
Securities, Inc., Dr. Gerald Krueger, Seth Frielich and
Dr. Wolfram Weinsheimer. We have entered into agreements
with our independent marketing representatives. The agreements
provide that a marketing representative will receive a fixed fee
or a percentage commission in connection with the sale of a
portfolio company to a company that the representative has
introduced to us. Included in our agreement with Schneider
Securities, Inc. and GunnAllen Financial is a reciprocal
agreement that requires that they pay UTEK a 10% success fee,
based on all stock-based compensation and/or related services,
if UTEK introduces a company to Schneider Securities, Inc. or
GunnAllen Financial that engages them to perform investment
banking or related services. The Company will also receive a fee
of 10% of investment banking fees not to include any brokerage
commissions and/or non-accountable expenses received as allowed
by the National Association of Securities Dealers (NASD).

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

9



---





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, 2000, we owned
879,300 shares of common stock of Image Analysis, Inc., which
represents approximately 11.3% of the issued and outstanding
common stock of Image Analysis, Inc. as of December 31,
2000.

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 share of Centrex, Inc. common stock. 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 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. As a result of two transactions,
we owned 1,584,000 shares of Centrex common stock at
December 31, 2000, which represents approximately 19.9% of
the issued and outstanding common stock of Centrex as of
December 31, 2000.

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, 2000, we owned
900,000 shares of common stock of Nubar, Inc. which represents
approximately 15.0% of the issued and outstanding common stock
of Nubar, Inc. as of December 31, 2000.

Clean Water Technologies, Inc./NuElectric
Corporation

In June 1999, our portfolio company Clean Water Technologies,
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 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, 2000, 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, 2000.

10



---



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 is a privately held development stage company. As a
result of two transactions, we owned 1,584,000 shares of Centrex
common stock at December 31, 2000, which represents
approximately 19.9% of the issued and outstanding common stock
of Centrex as of December 31, 2000.

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
Agreement and subsequent extensions granted to Lexon, Inc. by
us, we have received $170,000. Lexon, Inc was not able to meet
the December 31, 2000 deadline for payment on the remaining
balance; therefore we granted them an additional extension. We
expect to receive the remaining $30,000 plus interest of
approximately $9,000 by March 31, 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 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, 2000, 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, 2000.

Advanced Recycling Sciences, Inc./The Quantum
Group, Inc.

In June 2000, Advanced Recycling Sciences, Inc., a portfolio
company, merged with The Quantum Group, Inc., a development
stage Nevada corporation. In connection with the merger, we
received 931,000 unregistered shares of common stock of The
Quantum Group, Inc. The Quantum Group, Inc is a public
development stage company with shares traded on the
over-the-counter bulletin board under the symbol QTMG. The
Quantum Group, Inc. provides technology for recycling vehicular
tires. As a result of the merger, Quantum acquired the worldwide
license to a technology for a method of reclamation of
scrap-vulcanized rubber using supercritical fluids. As of
December 31, 2000, we owned 931,000 shares of common stock
of The Quantum Group, Inc., which represents approximately 8.2%
of the total issued and outstanding common stock of The Quantum
Group, Inc. as of December 31, 2000.

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,
2000, 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,
2000.

11



---



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, 2000, we owned 1,068,354 shares of common
stock of Torvec, Inc., which represents approximately 4.8% of
the issued and outstanding common stock of Torvec, Inc. as of
December 31, 2000.

Technology Development, Inc./The Quantum Group,
Inc.

In February 2001, Technology Development, Inc., a portfolio
company, merged with The Quantum Group, Inc., a development
stage Nevada corporation. In connection with the merger, we
received 1,446,153 unregistered shares of common stock of The
Quantum Group, Inc. The Quantum Group, Inc is a public
development stage company with shares traded on the
over-the-counter bulletin board under the symbol QTMG. The
Quantum Group, Inc. provides technology for recycling vehicular
tires. As a result of the merger, Quantum acquired the worldwide
license to a technology for ground surface application of a
novel ice adhesion modification technology. As of February 2001,
we owned 2,377,153 shares of common stock of The Quantum Group,
Inc., which represents approximately 18.5% of the total issued
and outstanding common stock of The Quantum Group, Inc.

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 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 2000, we paid Bolten Financial
Consulting, Inc. a total of $36,930 for its valuation services.

12



---



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 together with
the proceeds from our recent offering, 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 and other smaller public
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.

Fundamental Policies

We do not contemplate issuing senior securities. We will not
issue senior securities except in accordance with restrictions
imposed by Section 61 of the 1940 Act, which require, among
other things, asset coverage in the amount of at least 200% of
our net assets. Further, we may issue more than one class of
senior securities and warrants, options or other profit sharing
arrangements, subject to the provisions set forth in
Section 61. We will not sell securities short or on margin,
write puts or calls or purchase or sell commodities or commodity
contracts. We may from time to time sell some of the securities
we receive in consideration for stock for our portfolio
companies in exchange for real estate, which may be subject to
mortgages. The amount of assumed mortgages will not exceed 15%
of our net assets. We will not underwrite the issuance of
securities of other companies. We will not purchase real estate
mortgage loans. We will limit the amount of money we borrow to
30% of our net assets. Where necessary, we may make loans to or
additional investments in portfolio companies to protect our
initial investment and we will continue to invest in restricted
securities of portfolio companies. We will not make loans to our
portfolio companies, which in the aggregate exceed 25% of our
net assets. We may concentrate our investments in a particular
industry or group. However, we do not intend to concentrate on
investments in one industry.

Our Board of Directors has adopted the following policies
regarding investments in portfolio companies. These policies
include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | limiting the amount of our total investment in any single
	portfolio company to $500,000 or 10% of our net assets,
	whichever is less;                                                                                                                                                                                                                                                                                         
|
| |  | not permitting a portfolio company to commit significant amounts
	of the funds we have invested towards payment to third parties
	for the acquisition of the rights to a technology or the further
	development of a technology, until we have an agreement in place
	to resell the technology or to merge the portfolio company with
	an acquiring company or at least an executed letter of intent
	for a merger or sale; and
|
| |  | limiting the investment in new portfolio companies that we will
	merge with private companies such that our total investment in
	our portfolio companies that have merged with private companies
	does not exceed 10% of our total net assets measured as of the
	date of our Initial Public Offering (IPO).                                                                                                                   

We contemplate that, based on existing federal tax law, most
sales of our portfolio companies will be structured as merger
transactions where we will receive common stock in the acquiror
in exchange for all our shares in our portfolio company.

13



---



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 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 Commission.

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 Commission. 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.

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.

14



---



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. Should we lose our status
as a BDC, we would become subject to more stringent regulation
under the 1940 Act if we did not become exempt 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 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.

Competition

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.

15



---



Risk Factors

Our quarterly results could fluctuate.

The Companys quarterly operating results could fluctuate
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 results are not necessarily indicative of the
Companys performance in future quarters.

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 we nor our portfolio companies 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. 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 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.

16



---



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 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 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 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

17



---





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 eleven transactions that we have
completed, six have been with companies controlled by the same
group of investors.

At December 31, 2000, we have completed only eleven
transactions, including ten 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 exposed to significant asset concentration risk.

As of December 31, 2000, six out of the eleven consummated
transactions have been with merger parties
controlled by a similar group of investors. The value of these
investments represented approximately 19% of our total net
assets as of December 31, 2000.

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

Our investment strategy is based upon selling our portfolio
companies in stock for stock exchanges to public 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, we do not expect that we will
be able to sell the portfolio company securities to the public.
Therefore, our entire investment in the portfolio company could
be lost.

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

18



---





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.

Our investments in our portfolio companies are not made on a
multi-tiered basis and are subject to loss.

Substantially all of our portfolio companies are early stage
companies. We may make substantial investments in our portfolio
companies to enable them to conduct initial research,
development and acquisition activities. These investments are
not made in companies at different stages of development and,
accordingly, our investments do not benefit from any advantages,
which might be obtained by making investments on a multi-tiered
basis. We cannot assure you that any or all of our portfolio
companies will find or acquire new technologies. If any or all
of them do find or acquire new technologies, we cannot give you
any assurance that the portfolio companies will be able to find
suitable merger partners or other suitable purchasers of the
technologies. As a result, any or all of our portfolio companies
may use the proceeds of our investments to pay the costs and
expenses of researching, developing or acquiring technologies.

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, 2000, 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

19



---





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, 2000, we have completed eleven sales of
portfolio companies. Of these sales, six have been to public
companies, and the remainder have been to 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 acquirors shares, we may be deemed to be an
affiliate of the acquiror 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 therefrom. 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, 2000 and December 31, 1999,
respectively, equity securities amounting to $5,949,582 or 70.4%
of net assets and $2,594,931 or 79.0% 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, 2000 we have granted 240,000 options to
purchase shares of our common stock to certain officers and
employees. We have also reserved an additional 510,000 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.

We depend upon Clifford M. Gross and Uwe Reischl for our
investment decisions in portfolio companies.

We rely, and will continue to be substantially dependent upon,
the continued services of our management, principally our Chief
Executive Officer and Chairman of the Board, Clifford M. Gross,
and our President Uwe Reischl. Our management 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

20



---





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.

We are subject to 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 business,
has had no experience in managing and operating a business
development company, and has little or no experience in
corporate finance and corporate mergers.

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

21



---





Our management has broad discretion in investing the proceeds
from our recent offering.

Subject to our fundamental policies, our management has broad
discretion in the application of the proceeds of our recent IPO.
We intend to invest the majority of the net proceeds of the IPO
as either initial or additional investments in our portfolio
companies. Accordingly, purchasers of our securities must rely
on the ability of management in making portfolio investments
consistent with our objectives. Investors will not have the
opportunity to evaluate personally the relevant economic,
financial and other information that will be utilized by
management in deciding whether or not to make a particular
investment.

There are no significant barriers to entry to our business
and we expect to face significant competition as new competitors
enter the market.

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.

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 52% of our common
stock as of December 31, 2000. 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.

Forward-Looking Statements

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 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, including the risk factors described above.

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 2002. We
believe our office space is suitable for our needs for the
foreseeable future.

Item  3.     Legal
Proceedings

Neither the Company nor any of its property are a party to or
are the subject of any 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, 2000.

22



---



PART II

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

Computershare Trust Company Inc., 12039 W. Alameda Parkway,
Suite Z-2, Lakewood, CO 80228, 303-986-5400, 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 500
shareholders at December 31, 2000. The net asset value per
share of the Companys common stock at December 31,
2000, was $2.24. The following table reflects the high and low
closing prices per share of the Companys common stock on
the Nasdaq SmallCap Market for various periods.

|                                     |  |      |      |     |  |   |      | 
|------------------------------------ |  | ---- | ---- | --- |  | - | ---- | 
|                                     |  | High |      | Low
|                                     |  |      |      |    
|October 25, 2000  October 31, 2000  |  | $    | 6.31 |     |  | $ | 6.00 | 
|                                    
|                                    
|                                    
|                                    
|November 1, 2000  November 30, 2000 |  | $    | 6.25 |     |  | $ | 6.00 | 
|                                    
|                                    
|                                    
|                                    
|December 1, 2000  December 31, 2000 |  | $    | 6.25 |     |  | $ | 5.56 | 

For the fiscal years ended December 31, 2000 and 1999, the
Company did not declare or pay dividends.

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.

23



---



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

|                          |  |              |            |      |  |      |           |      |  |   |           |  |  |   |        | 
|------------------------- |  | ------------ | ---------- | ---- |  | ---- | --------- | ---- |  | - | --------- |  |  | - | ------ | 
|                          |  |             
|                          |  | December 31,
|                          |  |             
|                          |  | 2000         |            | 1999 |  | 1998 |           | 1997
|                          |  |              |            |      |  |      |           |     
|Balance Sheet Data:       |  |              |            |      |  |      |           |      |  |   |           |  |  |   |        | 
|                         
|                         
|                         
|                         
|Investments at fair value |  | $            | 5,949,582  |      |  | $    | 2,594,931 |      |  | $ | 1,300,000 |  |  | $ |       | 
|                         
|                         
|                         
|                         
|Cash and cash equivalents |  |              | 3,952,280  |      |  |      | 1,007,229 |      |  |   | 418,178   |  |  |   | 139    | 
|                         
|                         
|                         
|                         
|Total assets              |  |              | 10,088,666 |      |  |      | 4,205,345 |      |  |   | 1,805,795 |  |  |   | 31,708 | 
|                         
|                         
|                         
|                         
|Total liabilities         |  |              | 1,633,664  |      |  |      | 920,892   |      |  |   | 440,148   |  |  |   |       | 
|                         
|                         
|                         
|                         
|Net assets                |  |              | 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 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.

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

24



---





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 2000, we paid Bolten Financial
Consulting, Inc. a total of $36,930 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, travel and
other expenses that vary with revenues. General and
administrative costs include rent, depreciation, office,
investor relations and other overhead costs.

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 $10,088,666 and its net
assets were $8,455,002 at December 31, 2000, compared to
$4,205,345 and $3,284,453 at December 31, 1999 respectively.

Net asset value per share (NAV) was $2.24 at
December 31, 2000, compared to $1.18 at December 31,
1999. Net assets increased by $5,170,549 in 2000 and by
$1,918,806 in 1999.

25



---



Among the significant changes that affected total assets, net
assets and NAV during 2000 were:



| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | Five technology transfers valued at $4,501,584, with one in
	particular being valued in excess of $2,100,000
|
| |  | Initial Public Offering being successfully completed with net
	proceeds of $4,047,849                       

The Companys common shares outstanding as of
December 31, 2000 were 3,782,226, compared to 2,782,226 at
December 31, 1999. The Companys outstanding shares
were increased as a result of the successful completion of our
IPO.

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 stakes 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, 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 depreciation, after income tax effect, was
$(217,845); the remaining $2,510,980 or 25% 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 $376,137. See Note 2 to the
Consolidated Financial Statements under Item 8.

At December 31, 1999, $1,025,013 or 24% 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 $350,735; the
remaining $1,569,918 or 37% 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
$383,184. The increase in the value of publicly traded
securities from $1,025,013 in 1999 to $3,438,602 in 2000 is
primarily owing to the three technology transfer transactions
with NuElectric Corporation; The Quantum Group, Inc.; and
Torvec, Inc., with the value of one transfer being in excess of
$2,100,000.

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

|                                           |  |                         |           |      |  |   |           | 
|------------------------------------------ |  | ----------------------- | --------- | ---- |  | - | --------- | 
|                                           |  |                        
|                                           |  | Year Ended December 31,
|                                           |  |                        
|                                           |  | 2000                    |           | 1999
|                                           |  |                         |           |     
|Investments, at cost                       |  | $                       | 5,695,788 |      |  | $ | 1,418,212 | 
|                                          
|                                          
|                                          
|                                          
|Unrealized appreciation, before income tax |  |                         | 253,794   |      |  |   | 1,176,719 | 
|                                           |  |                         |           |      |  |   |           | 
|Investments, at fair value                 |  | $                       | 5,949,582 |      |  | $ | 2,594,931 | 
|                                           |  |                         |           |      |  |   |           | 

Following an initial investment in a portfolio company, the
Company may make additional investments in such investee or
subsequent acquirer in order to: (1) increase its ownership
percentage; (2) exercise 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 investee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 investee company and the Companys investment or
could result in a missed opportunity for the Company to
participate to a greater extent in an investees successful
operations. The Company attempts to maintain adequate liquid
capital to make follow-on investments in its private investee
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
Business Development Company (BDC) requirements, even
though the follow-on investment opportunity appears attractive.

26



---



The following table is a summary of the Companys capital
investments made in its portfolio companies during the year
ended December 31, 2000:

|                                                 |       |        |         |         | 
|------------------------------------------------ | ----- | ------ | ------- | ------- | 
|Capital Investments Made in Portfolio Companies: |       | Amount
|                                                 |       |       
|Ocular Technologies, Inc.                        |       | $      | 150     |        
|                                                
|                                                
|                                                
|                                                
|Composite Springs Technologies, Inc.             |       |        | 250     |        
|                                                
|                                                
|                                                
|                                                
|Doppler Tomography International, Inc.           |       |        | 150     |        
|                                                
|                                                
|                                                
|                                                
|XGR Imaging                                      |       |        | 250     |        
|                                                
|                                                
|                                                
|                                                
|Universal Keypad, Inc.                           |       |        | 250     |        
|                                                
|                                                
|                                                
|                                                
|Voice Tech Worldwide, Inc.                       |       |        | 229     |        
|                                                
|                                                
|                                                
|                                                
|Microsphere Technologies, Inc.                   |       |        | 5,000   |        
|                                                
|                                                
|                                                
|                                                
|Technology Development, Inc.                     |       |        | 150     |        
|                                                
|                                                
|                                                
|                                                
|Zorax, Inc.(1)                                   |       |        | 57,150  |        
|                                                
|                                                
|                                                
|                                                
|Ice Surface Technologies, Inc.(2)                |       |        | 185,750 |        
|                                                
|                                                
|                                                
|                                                
|Cancer Diagnostics, Inc.(3)                      |       |        | 1,250   |        
|                                                
|                                                
|                                                
|                                                
|Digital Personnel, Inc.(4)                       |       |        | 205,000 |        
|                                                
|                                                
|                                                
|                                                
|Advanced Recycling Sciences, Inc.(5)             |       |        | 45,000  |        
|                                                 |       |        |         |        
|                                                 | Total |        | $       | 500,579 | 
|                                                 |       |        |         |        



|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(1) | Zorax, Inc. merged with NuElectric Corporation on
	September 21, 2000.                  
|(2) | Ice Surface Technologies, Inc merged with Torvec, Inc. on
	November 29, 2000.           
|(3) | Cancer Diagnostics, Inc. was sold to Lexon, Inc. on
	January 28, 2000.                  
|(4) | Digital Personnel, Inc. merged with Graphco Technologies, Inc.
	on March 21, 2000.      
|(5) | Advanced Recycling Sciences, Inc. merged with The Quantum Group,
	Inc on June  24, 2000.

Of the total capital invested in our subsidiaries during the
year ended December 31, 2000, $375,000 was expended on
research and development costs, $119,150 on license and
consulting fees, both of which are reflected in the Consolidated
Statement of Operations as 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,
interest, dividends, fees and other income and its operating
expenses, net of applicable income tax provision. The second
element is Net realized gain on investment, 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, 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

27



---







| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                         
|
| |  | 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.
|
| |  | 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.                                
|
| |  | 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.                    
|
| |  | 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.                                               

Consultation 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% 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 conforming with BDC requirements.

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
August 2000 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. 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.

28



---



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.

Year Ended December 31, 1999 Compared
to Year Ended December 31, 1998

Income from operations. Income from operations increased
244% to $1,315,373 for the year ended December 31, 1999
from $381,843 for the year ended December 31, 1998. This
increase was due to the completion of transactions with four
companies in 1999 versus one transaction during the year ended
December 31, 1998. In each transaction we received
restricted shares in a tax-free exchange for a portfolio
company. An independent consultant valued the shares received in
each transaction. In our transactions with:



| |   |                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Image Analysis, Inc., we received 879,300 shares of common stock
	of Image Analysis, Inc. The shares were valued at time of sale
	at $0.25 per share;                                                                                                                                                                                                                                  
|
| |  | Nubar, Inc., we received 900,000 shares of common stock of
	Nubar, Inc. The shares were valued at time of sale at $0.14 per
	share;                                                                                                                                                                                                                                                    
|
| |  | Centrex, Inc., we received 1,584,000 shares of common stock of
	Centrex, Inc. The shares were valued at time of sale at $0.33;
	and                                                                                                                                                                                                                                                    
|
| |  | NuElectric Corporation, we received 791,957 shares of common
	stock of NuElectric. The shares were valued at time of sale at
	$0.29 per share. Subsequent to this transaction, we exchanged
	300,000 NuElectric Corporation shares for 150 shares of Rosbon,
	Inc. in a private transaction of equal value. As of
	December 31, 1999 we owned 491,957 shares in NuElectric
	Corporation

We also entered into several consulting agreements that
generated aggregate revenues of $165,000 for the year ended
December 31, 1999 as compared to $55,000 for the year ended
December 31, 1998.

Expenses. Total expenses increased 241% to $728,322 for
the year ended December 31, 1999 from $213,437 for the year
ended December 31, 1998. Salaries and wages increased 623%
to $197,125 for the year ended December 31, 1999 from
$27,275 for the year ended December 31, 1998. Professional
fees increased as well by 4,595% to $184,697 for the year ended
December 31, 1999 from $3,934 for the year ended
December 31, 1998. Sales and marketing costs increased 21%
to $79,544 from $65,649. General and administrative expenses
increased by 129% to $266,956 for the year ended
December 31, 1999 from $116,579 for the year ended
December 31, 1998. These increases were the result of not
being fully operational until May 1998, as well as increases in
staff and salaries and the engagement of auditors and other
professional service providers necessary to grow our business.
We anticipate that these will be reoccurring expenses.

Net Realized and Unrealized Gains and Income Taxes. The
increase in unrealized appreciation of investments declined 80%
to $122,919 for the year ended December 31, 1999 versus
$611,000 for the year ended December 31, 1998. The value of
our investment in Lexon, Inc. declined, while Image Analysis,
Inc. and NuElectric Corporation appreciated by a greater amount.

Our effective tax rate was a provision of 51.3% for the year
ended December 31, 1999 compared with a provision of 37.1%
for the year ended December 31, 1998. The provision
recorded in 1999 was higher primarily as a result of the tax
losses generated by UTEK LLC (UTEK LLC was formed on
December 31, 1998), which was passed through to its members.

29



---



Liquidity and Capital Resources

Net assets increased 157% to $8,455,002 at December 31,
2000 from $3,284,453 at December 31, 1999, attributable to
income from operations less the unrealized depreciation of
non-controlled affiliate investments and the successful
completion of our IPO in October 2000.

Our primary source of liquidity and capital through
December 31, 2000 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. In total, we have completed three
private placement transactions resulting in proceeds of $530,453
in 1998 and $1,305,807 in 1999. In 2000, we completed the
Companys IPO with net proceeds of $4,047,849 (after
deducting offering costs of $375,362 incurred in 1999). On
December 31, 2000 we had $3,952,280 in cash and cash
equivalents and $39,975 in notes payable to bank. Based upon our
anticipated capital needs for operations, general corporate
purposes, and future research and development agreements with
universities to complete technology transfer transactions,
management believes that the net proceeds received from the IPO
will be sufficient to meet our funding requirements for at least
12 months.

On September 13, 2000 the Company secured a $150,000
revolving line of credit with a local financial institution.
Advances under the line of credit bear interest at the financial
institutions prime rate, (9.5% at December 31, 2000).
The line of credit is due on demand and is secured by a pledge
of a portion of our investments in non-controlled affiliates and
the personal guarantees of the chief executive officer, a
director and a shareholder. The Company had used $39,975 of the
credit line for operations at December 31, 2000.

Impact of New Accounting Standards

In June 1998, the FASB issued Statement No. 133,
Accounting for Derivative Instruments and Hedging
Activities. This statement establishes accounting and
reporting standards for derivative financial instruments and
requires recognition of derivatives in the statement of
financial position to be measured at fair value. Gains or losses
resulting from changes in the value of derivatives would be
accounted for depending on the intended use of the derivative
and whether it qualifies for hedge accounting. This statement is
effective for financial statements beginning in 2001. Adoption
of Statement No. 133 is not expected to have a significant
effect on the Companys financial position or 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

30



---





Our interest income is sensitive to changes in the general level
of U.S. interest rates, particularly since the majority of our
investments are in short-term instruments. Due to the nature of
our short-term investments, we have concluded that we do not
have material market risks exposure.

Our investment policy requires us to invest funds in excess of
current operating requirements in:



| |   |                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | obligations of the U.S. government and its agencies;                                                                                                                                                
|
| |  | investment grade state and local government obligations;                                                                                                                                            
|
| |  | securities of U.S. corporations rated A1 or P1 by Standard &
	Poors or the Moodys equivalents; and/or                                                                                             
|
| |  | money market funds, deposits or notes issued or guaranteed by
	U.S. and non-U.S. commercial banks meeting certain credit rating
	and net worth requirements with maturities of less than two
	years.

At December 31, 2000 our cash and cash equivalents
consisted primarily of demand deposits and money market funds
held by a large institution in the U.S.

31



---



Item  8.     Financial
Statements and Supplementary Data

UTEK CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES


The following reports and consolidated financial schedules of
UTEK Corporation are filed herewith and included in response to
Item 8.

|                                                                                                       |  |      |    | 
|------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|Documents                                                                                              |  | Page
|                                                                                                       |  |     
|Report of Independent Auditors                                                                         |  |      | 33 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Consolidated Balance Sheets as of December 31, 2000 and 1999                                           |  |      | 34 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Consolidated Statements of Operations for the years ended
	December 31, 2000, 1999 and 1998            |  |      | 35 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Consolidated Statements of Cash Flows for the years ended
	December 31, 2000, 1999 and 1998            |  |      | 36 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Consolidated Statements of Changes in Net Assets for the years
	ended December 31, 2000, 1999 and 1998 |  |      | 37 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Schedule of Investments as of December 31, 2000                                                        |  |      | 38 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Schedule of Investments as of December 31, 1999                                                        |  |      | 39 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Notes to Consolidated Financial Statements                                                             |  |      | 40 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Selected Per Share Data and Ratios for the years ended
	December 31, 2000, 1999, 1998, and 1997        |  |      | 49 | 

Schedules other than those listed above have been omitted
because they are not applicable or the required information is
presented in the consolidated financial statements and/or
related notes.

32



---



REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders



We have audited the accompanying consolidated balance sheets of
UTEK Corporation, including the schedules of investments, as of
December 31, 2000 and 1999, 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, 2000, and selected per share data and ratios
for each of the four years in the period ended December 31,
2000. 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, 2000 and 1999. 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, 2000 and 1999,
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, 2000, and the selected per share
data and ratios for each of the four years in the period ended
December 31, 2000, in conformity with accounting principles
generally accepted in the United States.



| |                      
| | ---------------------
| | /s/ ERNST & YOUNG LLP

Tampa, Florida



33



---



UTEK CORPORATION

CONSOLIDATED BALANCE SHEETS

|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |           |         |           | 
|---------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------- | ----------- | --------- | ---------- | --------- | --------- | ------- | --------- | 
|                                                                                                                       |                                                                                                                                                                 | December 31                                                                        |                           | December 31
|                                                                                                                       |                                                                                                                                                                 | 2000                                                                               |                           | 1999       
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |            
|ASSETS                                                                                                                 |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Investments in non-controlled affiliates (cost $5,695,788 and
	$1,418,212 at December 31, 2000 and 1999, respectively) |                                                                                                                                                                 | $                                                                                  | 5,949,582                 |             |           | $          | 2,594,931 |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Cash and cash equivalents                                                                                              |                                                                                                                                                                 |                                                                                    | 3,952,280                 |             |           |            | 1,007,229 |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Deferred offering costs                                                                                                |                                                                                                                                                                 |                                                                                    |                          |             |           |            | 375,362   |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Prepaid expenses and other assets                                                                                      |                                                                                                                                                                 |                                                                                    | 110,331                   |             |           |            | 147,085   |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Fixed assets, net                                                                                                      |                                                                                                                                                                 |                                                                                    | 76,473                    |             |           |            | 80,738    |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    | TOTAL ASSETS              |             |           | 10,088,666 |           |           |         | 4,205,345 | 
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                      
|LIABILITIES                                                                                                            |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Notes payable to bank                                                                                                  |                                                                                                                                                                 |                                                                                    | 39,975                    |             |           |            |          |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Accrued expenses                                                                                                       |                                                                                                                                                                 |                                                                                    | 101,901                   |             |           |            | 114,453   |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Deferred income taxes                                                                                                  |                                                                                                                                                                 |                                                                                    | 1,491,788                 |             |           |            | 806,439   |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    | TOTAL LIABILITIES         |             |           | 1,633,664  |           |           |         | 920,892   | 
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    | NET ASSETS                |             | $         | 8,455,002  |           |           | $       | 3,284,453 | 
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|Commitments and Contingencies                                                                                          |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|Composition of net assets:                                                                                             |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Common stock, $.01 par value, 19,000,000 shares authorized;
	3,782,226 and 2,782,226 shares issued and outstanding at
	December 31, 2000 and 1999, respectively |                                                                                    | $                         | 37,822      |           |            | $         | 27,822    |        
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Preferred stock, $.01 par value, 1,000,000 shares authorized;
	none issued and outstanding                                                                      |                                                                                    |                           |            |           |            |           |          |        
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Additional paid in capital                                                                                                                                      |                                                                                    |                           | 6,173,859   |           |            |           | 2,136,010 |        
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       | Accumulated income:                                                                                                                                             |                                                                                    |                           |             |           |            |           |           |        
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       |                                                                                                                                                                 | Accumulated net operating income                                                   |                           |             | 2,061,314 |            |           |           | 386,702 |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       |                                                                                                                                                                 | Net realized gain on investments, net of income taxes                              |                           |             | 23,715    |            |           |           |        |          
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                      
|                                                                                                                       |                                                                                                                                                                 | Net unrealized appreciation of investments, net of deferred
	income taxes (Note 4) |                           |             | 158,292   |            |           |           | 733,919 |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    | Net assets                |             | $         | 8,455,002  |           |           | $       | 3,284,453 | 
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          
|                                                                                                                       |                                                                                                                                                                 |                                                                                    | Net asset value per share |             | $         | 2.24       |           |           | $       | 1.18      | 
|                                                                                                                       |                                                                                                                                                                 |                                                                                    |                           |             |           |            |           |          

See accompanying notes

34



---



UTEK CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |           |         | 
|----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | --------- | --------- | ---- | --------- | --------- | ------- | - | ------- | --------- | ------- | 
|                                                      |                                                                                                                                                                                                                     |                           
|                                                      |                                                                                                                                                                                                                     | Year Ended December 31    
|                                                      |                                                                                                                                                                                                                     |                           
|                                                      |                                                                                                                                                                                                                     | 2000                       |           | 1999      |           | 1998
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |     
|Income from operations:                               |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Sale of technology rights                                                                                                                                                                                           |                            | $         | 4,501,584 |           |      | $         | 1,098,212 |         |   | $       | 320,000   |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Consulting fees                                                                                                                                                                                                     |                            |           |          |           |      |           | 165,000   |         |   |         | 55,000    |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Investment income, net                                                                                                                                                                                              |                            |           | 75,230    |           |      |           | 52,161    |         |   |         | 6,843     |        
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                      |                                                                                                                                                                                                                     |                            | 4,576,814 |           |           |      | 1,315,373 |           |         |   | 381,843 |          
|                                                     
|                                                     
|                                                     
|                                                     
|Expenses:                                             |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Salaries and wages                                                                                                                                                                                                  |                            |           | 376,053   |           |      |           | 197,125   |         |   |         | 27,275    |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Professional fees                                                                                                                                                                                                   |                            |           | 309,619   |           |      |           | 184,697   |         |   |         | 3,934     |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Sales and marketing                                                                                                                                                                                                 |                            |           | 780,670   |           |      |           | 79,544    |         |   |         | 65,649    |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | General and administrative                                                                                                                                                                                          |                            |           | 417,526   |           |      |           | 266,956   |         |   |         | 116,579   |        
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                      |                                                                                                                                                                                                                     |                            | 1,883,868 |           |           |      | 728,322   |           |         |   | 213,437 |          
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                      | Income before income taxes                                                                                                                                                                                          |                            |           | 2,692,946 |           |      |           | 587,051   |         |   |         | 168,406   |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Provision for income taxes (Note 4)                                                                                                                                                                                 |                            |           | 1,018,334 |           |      |           | 301,190   |         |   |         | 62,450    |        
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                      |                                                                                                                                                                                                                     | Net income from operations |           |           | 1,674,612 |      |           |           | 285,861 |   |         |           | 105,956 | 
|                                                     
|                                                     
|                                                     
|                                                     
|Net realized and unrealized gains (losses):           |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net realized gain on investment, net of income tax expense of
	$14,312                                                                                                                                              |                            |           | 23,715    |           |      |           |          |         |   |         |          |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Increase (decrease) in unrealized appreciation of
	non-controlled affiliate investments, net of deferred tax
	expense (benefit) of $(347,298), $73,800 and $369,000 for
	2000, 1999 and 1998, respectively (Note 4) |                            |           | (575,627  | )         |      |           | 122,919   |         |   |         | 611,000   |        
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|Net increase in net assets from operations            |                                                                                                                                                                                                                     | $                          | 1,122,700 |           |           | $    | 408,780   |           |         | $ | 716,956 |          
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|Net increase in net assets from operations per share: |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Basic                                                                                                                                                                                                               |                            | $         | .38       |           |      | $         | .15       |         |   | $       | .31       |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Diluted                                                                                                                                                                                                             |                            | $         | .38       |           |      | $         | .15       |         |   | $       | .31       |        
|                                                     
|                                                     
|                                                     
|                                                     
|Weighted average shares:                              |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Basic                                                                                                                                                                                                               |                            |           | 2,968,018 |           |      |           | 2,682,420 |         |   |         | 2,304,691 |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Diluted                                                                                                                                                                                                             |                            |           | 2,968,720 |           |      |           | 2,682,420 |         |   |         | 2,304,691 |        
|                                                     
|                                                     
|                                                     
|                                                     
|Unaudited pro forma information:                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net increase in net assets from operations before pro forma
	effect of change in Companys tax structure                                                                                                            |                            | $         | 1,122,700 |           |      | $         | 408,780   |         |   | $       | 716,956   |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Pro forma effect of change in tax structure                                                                                                                                                                         |                            |           |          |           |      |           | 78,794    |         |   |         |          |        
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          
|                                                      | Pro forma increase in net assets from operations                                                                                                                                                                    |                            | $         | 1,122,700 |           |      | $         | 487,574   |         |   | $       | 716,956   |        
|                                                      |                                                                                                                                                                                                                     |                            |           |           |           |      |           |           |         |   |         |          

See accompanying notes

35



---



UTEK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |          |          |       |          |  
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------ | --------------------------------- | ----------------------------------------- | ------- | ------- | ---------- | ---------- | -------- | -------- | ---------- | -------- | -------- | ----- | -------- | -
|                                               |                                                                                                                    |                                                                   
|                                               |                                                                                                                    | Year Ended December 31                                            
|                                               |                                                                                                                    |                                                                   
|                                               |                                                                                                                    | 2000                                                               |                                   | 1999                                      |         | 1998   
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |        
|Operating Activities:                          |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|                                              
|                                              
|                                              
|                                              
|                                               | Net increase in net assets from operations                                                                         |                                                                    | $                                 | 1,122,700                                 |         |         | $          | 408,780    |          |          | $          | 716,956  |         
|                                              
|                                              
|                                              
|                                              
|                                               | 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 |                                   |                                           | 922,925 |         |            |            | (196,719 | )        |            |          | (980,000 | )    
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                                                                    | Deferred income taxes                                              |                                   |                                           | 685,349 |         |            |            | 374,989  |          |            |          | 431,450  |      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                                                                    | Services rendered for stock                                        |                                   |                                           |        |         |            |            | 204,219  |          |            |          | 86,550   |      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                                                                    | Depreciation                                                       |                                   |                                           | 19,251  |         |            |            | 14,046   |          |            |          | 4,181    |      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                                                                    | Gain on sale of investments                                        |                                   |                                           | (38,027 | )       |            |            |         |          |            |          |         |      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                                                                    | Changes in operating assets and liabilities:                       |                                   |                                           |         |         |            |            |          |          |            |          |          |      
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                                                                    |                                                                    | Prepaid expenses and other assets |                                           |         | 36,754  |            |            |          | (499,687 | )          |          |          | 8,809 |         
|                                              
|                                              
|                                              
|                                              
|                                               |                                                                                                                    |                                                                    | Accrued expenses                  |                                           |         | (12,552 | )          |            |          | 105,755  |            |          |          | 8,698 |         
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|                                               |                                                                                                                    |                                                                    |                                   | Net cash provided by operating activities |         |         | 2,736,400  |            |          |          | 411,383    |          |          |       | 276,644  |  
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|Investing Activities:                          |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|                                              
|                                              
|                                              
|                                              
|                                               | Investment securities received for sale of portfolio companies                                                     |                                                                    |                                   | (4,301,585                                | )       |         |            | (1,098,212 | )        |          |            | (320,000 | )       
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds received on sale of investments                                                                           |                                                                    |                                   | 62,037                                    |         |         |            |           |          |          |            |         |         
|                                              
|                                              
|                                              
|                                              
|                                               | Purchases of fixed assets                                                                                          |                                                                    |                                   | (14,987                                   | )       |         |            | (29,927    | )        |          |            | (69,038  | )       
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|                                               |                                                                                                                    |                                                                    |                                   | Net cash used in investing activities     |         |         | (4,254,535 | )          |          |          | (1,128,139 | )        |          |       | (389,038 | )
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|Financing Activities:                          |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|                                              
|                                              
|                                              
|                                              
|                                               | Proceeds from short term borrowings                                                                                |                                                                    |                                   | 140,975                                   |         |         |            |           |          |          |            |         |         
|                                              
|                                              
|                                              
|                                              
|                                               | Repayments on short-term borrowings                                                                                |                                                                    |                                   | (101,000                                  | )       |         |            |           |          |          |            |         |         
|                                              
|                                              
|                                              
|                                              
|                                               | Net proceeds from issuance of common stock                                                                         |                                                                    |                                   | 4,423,181                                 |         |         |            | 1,305,807  |          |          |            | 530,433  |         
|                                              
|                                              
|                                              
|                                              
|                                               | Net proceeds from issuance of common stock warrants                                                                |                                                                    |                                   | 30                                        |         |         |            |           |          |          |            |         |         
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|                                               |                                                                                                                    |                                                                    |                                   | Net cash provided by financing activities |         |         | 4,463,186  |            |          |          | 1,305,807  |          |          |       | 530,433  |  
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|Increase in cash and cash equivalents          |                                                                                                                    |                                                                    | 2,945,051                         |                                           |         |         | 589,051    |            |          |          | 418,039    |         
|                                              
|                                              
|                                              
|                                              
|Cash and cash equivalents at beginning of year |                                                                                                                    |                                                                    | 1,007,229                         |                                           |         |         | 418,178    |            |          |          | 139        |         
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|Cash and cash equivalents at end of year       |                                                                                                                    | $                                                                  | 3,952,280                         |                                           |         | $       | 1,007,229  |            |          | $        | 418,178    |         
|                                               |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|Supplemental Cash Flow Information:            |                                                                                                                    |                                                                    |                                   |                                           |         |         |            |            |          |          |            |         
|                                              
|                                              
|                                              
|                                              
|                                               | Cash paid for interest                                                                                             |                                                                    | $                                 | 1,699                                     |         |         | $          |           |          |          | $          |         |         

See accompanying notes

36



---



UTEK CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

|                                       |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |           |           | 
|-------------------------------------- | ------------------------------------------------------------------------------------ | -------------------------------------------------- | - | --------- | --------- | ---- | - | --------- | --------- |  | - | --------- | --------- | 
|                                       |                                                                                      |                                                   
|                                       |                                                                                      | Year Ended December 31                            
|                                       |                                                                                      |                                                   
|                                       |                                                                                      | 2000                                               |   | 1999      |           | 1998
|                                       |                                                                                      |                                                    |   |           |           |     
|Changes in net assets from operations: |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          
|                                      
|                                      
|                                      
|                                      
|                                       | Net income from operations                                                           |                                                    | $ | 1,674,612 |           |      | $ | 285,861   |           |  | $ | 105,956   |          
|                                      
|                                      
|                                      
|                                      
|                                       | Net realized gain on sale of investments                                             |                                                    |   | 23,715    |           |      |   |          |           |  |   |          |          
|                                      
|                                      
|                                      
|                                      
|                                       | Change in net unrealized appreciation of investments, net of
	related deferred taxes |                                                    |   | (575,627  | )         |      |   | 122,919   |           |  |   | 611,000   |          
|                                       |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          
|                                       |                                                                                      | Net increase in net assets from operations         |   |           | 1,122,700 |      |   |           | 408,780   |  |   |           | 716,956   | 
|                                       |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          
|Capital stock transactions:            |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          
|                                      
|                                      
|                                      
|                                      
|                                       | Common stock issued for cash                                                         |                                                    |   | 4,047,819 |           |      |   | 1,305,807 |           |  |   | 530,433   |          
|                                      
|                                      
|                                      
|                                      
|                                       | Common stock warrants issued for cash                                                |                                                    |   | 30        |           |      |   |          |           |  |   |          |          
|                                      
|                                      
|                                      
|                                      
|                                       | Common stock issued for services                                                     |                                                    |   |          |           |      |   | 204,219   |           |  |   | 86,550    |          
|                                       |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          
|                                       |                                                                                      | Net increase in net assets from stock transactions |   |           | 4,047,849 |      |   |           | 1,510,026 |  |   |           | 616,983   | 
|                                       |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          
|                                       | Net increase in net assets                                                           |                                                    |   | 5,170,549 |           |      |   | 1,918,806 |           |  |   | 1,333,939 |          
|                                      
|                                      
|                                      
|                                      
|                                       | Net assets at beginning of year                                                      |                                                    |   | 3,284,453 |           |      |   | 1,365,647 |           |  |   | 31,708    |          
|                                       |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          
|                                       |                                                                                      | Net assets at end of year                          |   | $         | 8,455,002 |      |   | $         | 3,284,453 |  |   | $         | 1,365,647 | 
|                                       |                                                                                      |                                                    |   |           |           |      |   |           |           |  |   |          

See accompanying notes

37



---



UTEK CORPORATION

SCHEDULE OF INVESTMENTS

December 31, 2000


|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|------ | --------- | ----------- |  |  | ----- | -------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  |  | - | --------- | 
|       |           | Original    |  |  |       |          |  |                                                                                                                          
|       |           | Date of     |  |  |       | Original |  |                                                                                                                          
|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 therefrom. 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

38



---



UTEK CORPORATION

SCHEDULE OF INVESTMENTS

December 31, 1999


|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|------ | --------- | ----------- |  |  | ----- | -------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  |  | - | --------- | 
|       |           | Original    |  |  |       |          |  |                                                                                                                          
|       |           | Date of     |  |  |       | Original |  |                                                                                                                          
|Shares |           | Acquisition |  |  |       | Cost     |  | Value                                                                                                                    
|       |           |             |  |  |       |          |  |                                                                                                                          
|       |           |             |  |  |       |          |  | Common Stock in non-controlled
	affiliates  79.0%                                                                        |  |   |           |  |  |   |           | 
|      
|      
|      
|      
|       | 1,000,000 |             |  |  | 5/98  |          |  | Lexon, Inc., publicly traded over the counter development
	stage enterprise  21.9%; developer of health care
	technology |  | $ | 320,000   |  |  | $ | 720,000   | 
|      
|      
|      
|      
|       | 879,300   |             |  |  | 1/99  |          |  | Image Analysis, Inc., privately held  23.1%;
	medical and hospital equipment developer                                   |  |   | 219,825   |  |  |   | 756,198   | 
|      
|      
|      
|      
|       | 1,584,000 |             |  |  | 5/99  |          |  | Centrex, Inc., privately held  15.9%;
	developer of water purification methodologies                                     |  |   | 522,720   |  |  |   | 522,720   | 
|      
|      
|      
|      
|       | 900,000   |             |  |  | 5/99  |          |  | Nubar, Inc., privately held  3.8%; developer
	of construction materials                                                  |  |   | 126,000   |  |  |   | 126,000   | 
|      
|      
|      
|      
|       | 491,957   |             |  |  | 6/99  |          |  | NuElectric Corporation, publicly traded over the
	counter  9.3%; environmental services                                  |  |   | 142,667   |  |  |   | 305,013   | 
|      
|      
|      
|      
|       | 150       |             |  |  | 11/99 |          |  | Rosbon, Inc., privately held  5.0%; real
	estate development                                                             |  |   | 87,000    |  |  |   | 165,000   | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|       |           |             |  |  |       |          |  | TOTAL INVESTMENTS  79.0%                                                                                                 |  | $ | 1,418,212 |  |  | $ | 2,594,931 | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|       |           |             |  |  |       |          |  | Cash and other assets, less liabilities  21.0%                                                                           |  |   |           |  |  |   | 689,522   | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 
|       |           |             |  |  |       |          |  | Net Assets at December 31, 1999  100%                                                                                    |  |   |           |  |  | $ | 3,284,453 | 
|       |           |             |  |  |       |          |  |                                                                                                                           |  |   |           |  |  |   |           | 

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 therefrom. 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. As such, the Company is deemed
	to be an affiliate of the above companies, as defined under
	Rule 144.                                                                                                                                                                                                             

See accompanying notes

39



---



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.

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.

Principles of Consolidation

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

Segment Disclosures

Management considers the Company as operating in only one
segment, the transfer of new technologies through the sale of
portfolio companies. The Company has no assets or significant
operations established outside the United States.

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.

40



---



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



1.  Nature of Business and Significant Accounting
Policies  (Continued)


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.

Cash and Cash Equivalents

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

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 has no 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.

41



---



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



1.  Nature of Business and Significant Accounting
Policies  (Continued)


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
employee 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 year ended December 31, 2000 the Company incurred
$375,000 in such costs, which is classified as sales and
marketing expense in the consolidated statements of operations.

Impact of New Accounting Standards

In June 1998, the FASB issued Statement No. 133,
Accounting for Derivative Instruments and Hedging
Activities. This statement establishes accounting and
reporting standards for derivative financial instruments and
requires recognition of derivatives in the statement of
financial position to be measured at fair value. Gains or losses
resulting from changes in the value of derivatives would be
accounted for depending on the intended use of the derivative
and whether it qualifies for hedge accounting. This statement is
effective for financial statements beginning in 2001. The
Company is currently studying the future effects of adopting
this statement. Adoption of statement No. 133 is not
expected to have a significant effect on the Companys
financial position or results of operations.

2.  Investments

Equity securities at December 31, 2000 and
December 31, 1999, (70.4% and 79.0% 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.

42



---



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

2.  Investments  (Continued)

As of December 31, 2000 and December 31, 1999, the
Company had established eight and seven portfolio companies,
respectively, with net assets of $740 and $133,000,
respectively, which are included in other assets.

On January 28, 1999, the Company sold its Image Analysis
Corporation portfolio company to Image Analysis, Inc. for
879,300 shares of Image Analysis, Inc. common stock in a
non-taxable exchange.

On May 31, 1999, the Company sold its E. Coli Measurement
Systems, Inc. portfolio company to Centrex, Inc. for 900,000
shares of Centrex, Inc. common stock in a non-taxable exchange.

On May 28, 1999, the Company sold its Advanced Reinforcing
Technologies, Inc. portfolio company to Nubar, Inc. for 900,000
shares of Nubar Inc. common stock in a non-taxable exchange.

On June 30, 1999, the Company sold its Clean Water
Technologies, Inc. portfolio company to NuElectric, Inc. for
791,957 shares of NuElectric Corporation common stock in a
non-taxable exchange.

On September 17, 1999, the Company sold its Safe Water
Technologies, Inc. portfolio company to Centrex, Inc. for
684,000 shares of Centrex, Inc. common stock in a non-taxable
exchange.

On November 12, 1999, the Company acquired 150 shares of
common stock in Rosbon, Inc. in exchange for 300,000 shares of
its NuElectric, Inc. stock in a non-taxable exchange

On January 28, 2000, the Company sold its Cancer
Diagnostic, Inc. portfolio company to Lexon, Inc. for $200,000.
The Company received $50,000 in cash and a promissory note for
$150,000, $120,000 of which was paid to the Company during the
year.

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.

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.

3.  Fixed Assets

Fixed assets consist of the following:

|                              |  |             |         |      |  |   |         |  
|----------------------------- |  | ----------- | ------- | ---- |  | - | ------- | -
|                              |  |            
|                              |  | December 31
|                              |  |            
|                              |  | 2000        |         | 1999
|                              |  |             |         |     
|Computer Equipment            |  | $           | 69,727  |      |  | $ | 54,741  |  
|                             
|                             
|                             
|                             
|Furniture and Fixtures        |  |             | 26,268  |      |  |   | 26,268  |  
|                             
|                             
|                             
|                             
|Leasehold Improvements        |  |             | 17,955  |      |  |   | 17,955  |  
|                              |  |             |         |      |  |   |         |  
|                              |  |             | 113,950 |      |  |   | 98,964  |  
|                             
|                             
|                             
|                             
|Less accumulated depreciation |  |             | (37,477 | )    |  |   | (18,226 | )
|                              |  |             |         |      |  |   |         |  
|                              |  | $           | 76,473  |      |  | $ | 80,738  |  
|                              |  |             |         |      |  |   |         |  

43



---



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 taxes on realized and unrealized appreciation
of investments, are as follows:

|          |         |                        |           |         |  |      |         |         |  |   |        |        | 
|--------- | ------- | ---------------------- | --------- | ------- |  | ---- | ------- | ------- |  | - | ------ | ------ | 
|          |         |                       
|          |         | Year Ended December 31
|          |         |                       
|          |         | 2000                   |           | 1999    |  | 1998
|          |         |                        |           |         |  |     
|Current:  |         |                        |           |         |  |      |         |         |  |   |        |       
|         
|         
|         
|         
|          | Federal |                        | $         |        |  |      | $       |        |  |   | $      |       | 
|         
|         
|         
|         
|          | State   |                        |           |        |  |      |         |        |  |   |        |       | 
|          |         |                        |           |         |  |      |         |         |  |   |        |       
|          |         | $                      |          |         |  | $    |        |         |  | $ |       |       
|          |         |                        |           |         |  |      |         |         |  |   |        |       
|Deferred: |         |                        |           |         |  |      |         |         |  |   |        |       
|         
|         
|         
|         
|          | Federal |                        |           | 867,428 |  |      |         | 257,168 |  |   |        | 53,322 | 
|         
|         
|         
|         
|          | State   |                        |           | 150,906 |  |      |         | 44,022  |  |   |        | 9,128  | 
|          |         |                        |           |         |  |      |         |         |  |   |        |       
|          |         |                        | 1,018,334 |         |  |      | 301,190 |         |  |   | 62,450 |       
|          |         |                        |           |         |  |      |         |         |  |   |        |       
|          |         | $                      | 1,018,334 |         |  | $    | 301,190 |         |  | $ | 62,450 |       
|          |         |                        |           |         |  |      |         |         |  |   |        |       

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

|                                    |  |                        |           |      |  |      |         |  |  |   |        |  
|----------------------------------- |  | ---------------------- | --------- | ---- |  | ---- | ------- |  |  | - | ------ | -
|                                    |  |                       
|                                    |  | Year Ended December 31
|                                    |  |                       
|                                    |  | 2000                   |           | 1999 |  | 1998
|                                    |  |                        |           |      |  |     
|Tax at U.S. statutory rate          |  | $                      | 915,601   |      |  | $    | 199,597 |  |  | $ | 57,258 |  
|                                   
|                                   
|                                   
|                                   
|State taxes, net of federal benefit |  |                        | 98,217    |      |  |      | 29,057  |  |  |   | 6,210  |  
|                                   
|                                   
|                                   
|                                   
|Valuation allowance                 |  |                        |          |      |  |      |        |  |  |   | (1,925 | )
|                                   
|                                   
|                                   
|                                   
|LLC loss deductible by members      |  |                        |          |      |  |      | 71,193  |  |  |   |       |  
|                                   
|                                   
|                                   
|                                   
|Other                               |  |                        | 4,516     |      |  |      | 1,343   |  |  |   | 907    |  
|                                    |  |                        |           |      |  |      |         |  |  |   |        |  
|                                    |  | $                      | 1,018,334 |      |  | $    | 301,190 |  |  | $ | 62,450 |  
|                                    |  |                        |           |      |  |      |         |  |  |   |        |  

44



---



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
|                                |                                     |                       
|                                |                                     | 2000                   |                            | 1999   
|                                |                                     |                        |                            |        
|Noncurrent deferred tax asset:  |                                     |                        |                            |         |            |            |         |        
|                               
|                               
|                               
|                               
|                                | Net operating loss carryforward     |                        | $                          | 601,553 |            |            | $       | 107,741 |         
|                               
|                               
|                               
|                               
|                                | Other                               |                        |                            | 203     |            |            |         | 203     |         
|                                |                                     |                        |                            |         |            |            |         |        
|                                |                                     |                        | 601,756                    |         |            |            | 107,944 |        
|                               
|                               
|                               
|                               
|Current deferred tax liability: |                                     |                        |                            |         |            |            |         |        
|                               
|                               
|                               
|                               
|                                | Other Investments in non-controlled |                        |                            | (2,123  | )          |            |         |        |         
|                               
|                               
|                               
|                               
|                                |                                     | affiliates             |                            |         | (2,091,421 | )          |         |         | (914,383 | )       
|                                |                                     |                        |                            |         |            |            |         |        
|                                |                                     |                        | Net deferred tax liability |         | $          | (1,491,788 | )       |         | $        | (806,439 | )
|                                |                                     |                        |                            |         |            |            |         |        

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, 2000 and 1999.

At December 31, 2000, the Company has available net
operating loss carryforwards of approximately $1,600,000, which
expire in years 2012, 2018, 2019 and 2020.

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, are 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 | 
|                                    |  |             |         | 

45



---



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)

5.  Stockholders Equity

Transactions in common stock for the three years ended
December 31, 2000 were as follows:

|                             |                                            |        |           |           |  |                 |        |        |  |   |           |           | 
|---------------------------- | ------------------------------------------ | ------ | --------- | --------- |  | --------------- | ------ | ------ |  | - | --------- | --------- | 
|                             |                                            |        |           |           |  | Additional     
|Common Stock                 |                                            | Shares |           | Par Value |  | Paid-in Capital
|                             |                                            |        |           |           |  |                
|Balance at January 1, 1998   |                                            |        | 2,116,334 |           |  | $               | 21,164 |        |  | $ | 15,659    |          
|                            
|                            
|                            
|                            
|                             | Private placement  May 14, 1998           |        |           | 207,068   |  |                 |        | 2,070  |  |   |           | 308,532   | 
|                            
|                            
|                            
|                            
|                             | Private placement  July 25,1998           |        |           | 96,400    |  |                 |        | 964    |  |   |           | 218,867   | 
|                            
|                            
|                            
|                            
|                             | Issued for services                        |        |           | 34,600    |  |                 |        | 346    |  |   |           | 86,204    | 
|                             |                                            |        |           |           |  |                 |        |        |  |   |           |          
|                             | 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 |          
|                             |                                            |        |           |           |  |                 |        |        |  |   |           |          

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 2000, 1999, and 1998
amounted to $0, $204,000, and $78,700, 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.

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 options 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, 2000, 190,000 options from
the 1999 Plan had been granted and 50,000 options from the 2000
Plan had been granted.

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. At December 31, 1999 no options had
been granted. At December 31, 2000, 240,000 options 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

46



---



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 been decreased by $80,877, or
$0.03 per share, for the year ended December 31, 2000.

The fair value of each option granted in 2000 was estimated
using the Black-Scholes option-pricing model with the following
assumptions:

|                        |  |  |         | 
|----------------------- |  |  | ------- | 
|                       
|                       
|                       
|                       
|Expected dividend yield |  |  | 0.00%   | 
|                       
|                       
|                       
|                       
|Expected volatility     |  |  | 0.469   | 
|                       
|                       
|                       
|                       
|Risk-free interest      |  |  | 5.77%   | 
|                       
|                       
|                       
|                       
|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 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Exercised                                                      |  |         |        |                  |  |   |     | 
|                                                              
|                                                              
|                                                              
|                                                              
|Canceled/expired                                               |  |         |        |                  |  |   |     | 
|                                                              
|                                                              
|                                                              
|                                                              
|Outstanding  December 31, 2000                                |  |         | 240,000 |                  |  | $ | 6.30 | 
|                                                               |  |         |         |                  |  |   |      | 
|Weighted-average fair value of options granted during the year |  |         |         |                  |  | $ | 2.89 | 

Approximately 63,750 options were exercisable at
December 31, 2000. The exercise price range of outstanding
options at December 31, 2000 follows:

|            |         |                 |  |            |      |             |  |  |      |  |  |  |        | 
|----------- | ------- | --------------- |  | ---------- | ---- | ----------- |  |  | ---- |  |  |  | ------ | 
|Outstanding |         | Exercise Price  |  |            |      | Exercisable
|Options     |         | Range Per Share |  | Expiration |      | Options    
|            |         |                 |  |            |      |            
|            | 85,000  |                 |  | $          | 6.00 |             |  |  | 2005 |  |  |  | 21,250 | 
|            | 5,000   |                 |  | $          | 6.13 |             |  |  | 2005 |  |  |  | 5,000  | 
|            | 50,000  |                 |  | $          | 6.13 |             |  |  | 2005 |  |  |  | 12,500 | 
|            | 100,000 |                 |  | $          | 6.60 |             |  |  | 2005 |  |  |  | 25,000 | 
|            |         |                 |  |            |      |             |  |  |      |  |  |  |        | 
|            | 240,000 |                 |  |            |      |             |  |  |      |  |  |  | 63,750 | 
|            |         |                 |  |            |      |             |  |  |      |  |  |  |        | 

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

7.  Commitments and Contingencies

On September 13, 2000, the Company obtained a revolving
line of credit with a local financial institution. This line of
credit 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 current amount due to the bank is $39,975.

The Company has an operating lease for its corporate office.
During fiscal year 2000, 1999, and 1998, rental expense related
to this lease was $18,993, $16,937, and $6,932 respectively.

47



---



UTEK CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)



7.  Commitments and Contingencies 
(Continued)


At December 31, 2000, future minimum payments under the
operating lease is as follows:

|     |       |   |        |        | 
|---- | ----- | - | ------ | ------ | 
|    
|    
|    
|    
|2001 |       | $ | 18,993 |       
|    
|    
|    
|    
|2002 |       |   | 4,748  |       
|     |       |   |        |       
|     | Total |   | $      | 23,741 | 
|     |       |   |        |       

8.  Related Party Transactions

Carl Nisser, one of the Companys directors, is 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).

In addition, the Companys Chief Financial Officer of the
Company is Carole Mason. Ms. Mason is also a partner with
the accounting firm Myers & Mason, P.A. in Tampa, Florida.
In the past year Myers & Mason, P.A. has received $12,000 in
fees for services for the Company and holds 14,000 shares of
Company stock.

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 $67,000 in compensation during the past fiscal
year for services performed for the Company and holds 6,100
shares of Company stock.

9.  Subsequent Events (unaudited)

In February 2001, Technology Development, Inc., a portfolio
company, merged with The Quantum Group, Inc. In connection with
the merger, we received 1,446,153 unregistered shares of common
stock of The Quantum Group, Inc. The Quantum Group, Inc is a
public development stage company with shares traded on the
over-the-counter bulletin board under the symbol QTMG. The
Quantum Group, Inc. provides technology for recycling vehicular
tires. As a result of the merger, The Quantum Group, Inc.
acquired the worldwide license to a technology for ground
surface application of a novel ice adhesion modification
technology.

48



---



SELECTED PER SHARE DATA AND RATIOS

|                                                                       |                                                                                                |                        |           |      |   |      |           |      |   |   |           |     |  |   |           |     | 
|---------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------- | --------- | ---- | - | ---- | --------- | ---- | - | - | --------- | --- |  | - | --------- | --- | 
|                                                                       |                                                                                                |                       
|                                                                       |                                                                                                | Year Ended December 31
|                                                                       |                                                                                                |                       
|                                                                       |                                                                                                | 2000                   |           | 1999 |   | 1998 |           | 1997
|                                                                       |                                                                                                |                        |           |      |   |      |           |     
|Per share information                                                  |                                                                                                |                        |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net asset value, beginning of year                                     |                                                                                                | $                      | 1.18      |      |   | $    | 0.56      |      |   | $ | .02       |     |  | $ |          |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Net increase from operations(1)                                                                |                        |           | 0.56 |   |      |           | 0.10 |   |   |           | .05 |  |   |           |    | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Net change in realized and unrealized appreciation/ depreciation
	on investments (after taxes) |                        |           | (.87 | ) |      |           | (.04 | ) |   |           | .23 |  |   |           |    | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Net increase from stock transactions                                                           |                        |           | 1.37 |   |      |           | 0.56 |   |   |           | .26 |  |   |           | .02 | 
|                                                                       |                                                                                                |                        |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|Net asset value, end of year                                           |                                                                                                | $                      | 2.24      |      |   | $    | 1.18      |      |   | $ | .56       |     |  | $ | .02       |    
|                                                                       |                                                                                                |                        |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|Per share market value, end of year                                    |                                                                                                | $                      | 5.75      |      |   | $    |          |      |   | $ |          |     |  | $ |          |    
|Ratios/supplemental data                                               |                                                                                                |                        |           |      |   |      |           |      |   |   |           |     |  |   |           |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Net assets, end of year                                                |                                                                                                | $                      | 8,455,002 |      |   | $    | 3,284,453 |      |   | $ | 1,365,647 |     |  | $ | 31,708    |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Ratio of expenses to average net assets(2)                             |                                                                                                |                        | 32        | %    |   |      | 31        | %    |   |   | 31        | %   |  |   | 32        | %  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Ratio of net income to average net assets                              |                                                                                                |                        | 29        | %    |   |      | 12        | %    |   |   | 15        | %   |  |   | (32       | )% 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Diluted weighted average number of shares outstanding during the
	year |                                                                                                |                        | 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) | 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 2001 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 2001 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 2001
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.

49



---



Item  13.     Certain
Relationships and Related Transactions

The information set forth under the caption CERTAIN
TRANSACTIONS in the Companys Proxy Statement for the
2001 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:



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



| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.  Financial Statement Schedules were omitted as they are
        not required or 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.                                                                                                                                                                     
|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.                                                                                           
|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.                                                                                                                                                           

50



---



|           |  |   |  |                                                                                                                                                 
|---------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|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.                              
|10.28(34)  |  |  |  | Merger Agreement dated September 21, 2000 between UTEK
	Corporation, NuElectric, Inc. and Zorax, Inc.                                           
|10.29(35)  |  |  |  | Merger Agreement dated November 29, 2000 between UTEK
	Corporation, Torvec, Inc., and Ice Surface Development, Inc.                             

51



---



|          |  |   |  |                                                                                                                               
|--------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------
|10.30*    |  |  |  | Safekeeping Agreement dated December 12, 2000 between UTEK
	Corporation and Bank of Tampa.                                    
|10.31*    |  |  |  | Corporate Custody Agreement dated November 27, 2000 between
	UTEK Corporation and Bank of Tampa.                              
|10.32*    |  |  |  | License Agreement dated as of February 9, 2000 between
	Dartmouth College and Technology Development, Inc.                    
|10.33*    |  |  |  | Strategic Alliance dated December 14, 2000 between UTEK
	Corporation and Dartmouth College.                                   
|10.34(36) |  |  |  | Merger Agreement dated February 19, 2001, between UTEK
	Corporation, Technology Development, Inc. and The Quantum Group,
	Inc.
|10.35*    |  |  |  | Marketing Agreement dated April 15, 1999 between UTEK
	Corporation and Wolfram Weinsheimer.                                   
|10.36*    |  |  |  | Amendment dated March 28, 2000 to the Marketing Agreement
	between UTEK Corporation and Wolfram Weinsheimer.                  
|10.37*    |  |  |  | Marketing Agreement dated December 8, 1998 between UTEK
	Corporation and Seth Frielich.                                       
|10.38*    |  |  |  | Amendment dated March 28, 2000 to the Marketing Agreement
	between UTEK Corporation and Seth Frielich.                        
|10.39*    |  |  |  | Marketing Agreement dated January 26, 1999 between UTEK
	Corporation and Gerald Krueger.                                      
|10.40*    |  |  |  | Amendment dated March 29, 2000 to the Marketing Agreement
	between UTEK Corporation and Gerald Krueger.                       
|10.41*    |  |  |  | Marketing Agreement dated November 6, 2000 between UTEK
	Corporation and GunnAllen Financial.                                 
|10.42*    |  |  |  | Marketing Agreement dated January 10, 2001 between UTEK
	Corporation and Schneider Securities, Inc.                           
|10.43*    |  |  |  | Employment Agreement with Charles Pope.                                                                                       
|10.44*    |  |  |  | Extension of Agreement dated January 30, 1998 between UTEK
	Corporation and the University of South Florida.                  
|24.1      |  |  |  | Powers of Attorney (included on signature page).                                                                              
|99*       |  |  |  | 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). 
| | (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).

52



---



| |     |                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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).
|(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).

53



---



|     |                                                                                                                           
|---- | --------------------------------------------------------------------------------------------------------------------------
|(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 2 to the
	Companys report on Form 8-K filed on March 6,
	2001.                      






|   |                                                                                              
|-- | ---------------------------------------------------------------------------------------------
|b. | No reports on Form 8-K were filed by the Company during the
	quarter ended December 31, 2000.

|   |                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.

54



---



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 15, 2001.



| |                 
| | ----------------
| | 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. GROSS Clifford M. Gross             |  | Chairman and Chief Executive Officer |  | March 15, 2001
|                                                   
|/s/ UWE REISCHL Uwe Reischl                         |  | President                            |  | March 15, 2001
|                                                   
|/s/ CAROLE R. MASON Carole R. Mason                 |  | Principal Accounting Officer         |  | March 15, 2001
|                                                   
|/s/ CHARLES POPE Charles Pope                       |  | Chief Financial Officer              |  | March 15, 2001
|                                                   
|/s/ SAM REIBER Sam Reiber                           |  | Director                             |  | March 15, 2001
|                                                   
|/s/ STUART M. BROOKS Stuart M. Brooks               |  | Director                             |  | March 15, 2001
|                                                   
|/s/ KWABENA GYIMAH-BREMPONG Kwabena Gyimah-Brempong |  | Director                             |  | March 15, 2001
|                                                   
|/s/ ARTHUR CHAPNIK Arthur Chapnik                   |  | Director                             |  | March 15, 2001
|                                                   
|/s/ CARL NISSER Carl Nisser                         |  | Director                             |  | March 15, 2001
|                                                   
|/s/ DAVID MICHAEL David Michael                     |  | Director                             |  | March 15, 2001

55



---



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
|        |       |  |  |            
|        | 10.2  |  |  |            |  | 1999 Incentive Stock Option Plan, as corrected.                                                             
|        | 10.3  |  |  |            |  | 2000 Non-Qualified Stock Option Plan, as corrected.                                                         
|        | 10.30 |  |  |            |  | Safekeeping Agreement dated December 12, 2000 between UTEK
	Corporation and Bank of Tampa.                  
|        | 10.31 |  |  |            |  | Corporate Custody Agreement dated November 27, 2000 between
	UTEK Corporation and Bank of Tampa.            
|        | 10.32 |  |  |            |  | License Agreement dated as of February 9, 2000 between
	Dartmouth College and Technology Development, Inc.  
|        | 10.33 |  |  |            |  | Strategic Alliance dated December 14, 2000 between UTEK
	Corporation and Dartmouth College.                 
|        | 10.35 |  |  |            |  | Marketing Agreement dated April 15, 1994 between UTEK
	Corporation and Wolfram Weinsheimer.                 
|        | 10.36 |  |  |            |  | Amendment dated March 28, 2000 to the Marketing Agreement
	between UTEK Corporation and Wolfram Weinsheimer.
|        | 10.37 |  |  |            |  | Marketing Agreement dated December 8, 1998 between UTEK
	Corporation and Seth Frielich.                     
|        | 10.38 |  |  |            |  | Amendment dated March 28, 2000 to the Marketing Agreement
	between UTEK Corporation and Seth Frielich.      
|        | 10.39 |  |  |            |  | Marketing Agreement dated January 26, 1999 between UTEK
	Corporation and Gerald Krueger.                    
|        | 10.40 |  |  |            |  | Amendment dated March 29, 2000 to the Marketing Agreement
	between UTEK Corporation and Gerald Krueger.     
|        | 10.41 |  |  |            |  | Marketing Agreement dated November 6, 2000 between UTEK
	Corporation and GunnAllen Financial.               
|        | 10.42 |  |  |            |  | Marketing Agreement dated January 10, 2001 between UTEK
	Corporation and Schneider Securities, Inc.         
|        | 10.43 |  |  |            |  | Employment Agreement with Charles Pope.                                                                     
|        | 10.44 |  |  |            |  | Extension of Agreement dated January 30, 1998 between UTEK
	Corporation and the University of South Florida.
|        | 99    |  |  |            |  | Code of Ethics of UTEK Corporation.                                                                         

56