##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2007



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number 001-15941



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UTEK CORPORATION

(Exact name of
registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 59-3603677                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

2109 Palm Avenue

Tampa, FL 33605

(Address of principal executive offices)

(813) 754-4330

(Registrants
telephone number)



(Former name, former address and former
fiscal year, if changed since last report)

None



---

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈Accelerated filer  x    Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x

On May 3, 2007, there were 9,002,259 shares outstanding of registrants common stock, $0.01 par value.



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##### Table of Contents

UTEK CORPORATION

FORM 10-Q TABLE OF CONTENTS



|                                                                                                                  |  |   
|----------------------------------------------------------------------------------------------------------------- |  | --
|PART I. FINANCIAL INFORMATION                                                                                     |  |   
|                                                                                                                  | 
|Item 1. Financial Statements                                                                                      |  |   
|                                                                                                                  | 
|Consolidated Statements of Assets and Liabilities as of March 31, 2007 (unaudited) and December 31, 2006          |  | 3 
|                                                                                                                  | 
|Consolidated Statements of Operations  For the Three Months Ended March 31, 2007 and 2006 (unaudited)            |  | 4 
|                                                                                                                  | 
|Consolidated Statements of Cash Flows  For the Three Months Ended March 31, 2007 and 2006 (unaudited)            |  | 5 
|                                                                                                                  | 
|Consolidated Statements of Changes in Net Assets  For the Three Months Ended March 31, 2007 and 2006 (unaudited) |  | 7 
|                                                                                                                  | 
|Financial Highlights For the Three Months Ended March 31, 2007 and 2006 (unaudited)                               |  | 8 
|                                                                                                                  | 
|Schedule of Investments as of March 31, 2007 (unaudited)
and December 31, 2006                                    |  | 9 
|                                                                                                                  | 
|Notes to Consolidated Financial Statements (unaudited)                                                            |  | 18
|                                                                                                                  | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                     |  | 25
|                                                                                                                  | 
|Item 3. Quantitative and Qualitative Disclosures about Market Risks                                               |  | 33
|                                                                                                                  | 
|Item 4. Controls and Procedures                                                                                   |  | 33
|                                                                                                                  | 
|PART II. OTHER INFORMATION                                                                                        |  |   
|                                                                                                                  | 
|Item 1. Legal Proceedings                                                                                         |  | 34
|                                                                                                                  | 
|Item 1A. Risk Factors                                                                                             |  | 34
|                                                                                                                  | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                               |  | 34
|                                                                                                                  | 
|Item 3. Defaults Upon Senior Securities                                                                           |  | 34
|                                                                                                                  | 
|Item 4. Submission of Matters to a Vote of Security Holders                                                       |  | 34
|                                                                                                                  | 
|Item 5. Other Information                                                                                         |  | 34
|                                                                                                                  | 
|Item 6. Exhibits                                                                                                  |  | 34
|                                                                                                                  | 
|Signatures                                                                                                        |  |   
|                                                                                                                  | 
|Exhibits                                                                                                          |  |   



Page 2 of 35



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##### Table of Contents

PART I. FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

UTEK Corporation

Consolidated Statements of Assets and Liabilities



|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                                                                       |  | March 31, 2007 |             |   | December 31,2006 |  
|                                                                                                                                                                                       |  | (Unaudited)    |             |   |                  |  
|ASSETS                                                                                                                                                                                 |  |                |             |   |                  |   |             |  
|Investments:                                                                                                                                                                           |  |                |             |   |                  |   |             |  
|Non-affiliate investments (cost: 2007 - $37,640,433; 2006 - $41,786,374)                                                                                                               |  | $              | 11,945,900  |   |                  | $ | 14,578,700  |  
|Affiliate investments (cost: 2007 - $30,136,207; 2006 - $22,354,448)                                                                                                                   |  |                | 15,424,700  |   |                  |   | 8,713,900   |  
|Control investments (cost: 2007 - $16,499,064; 2006 - $15,485,318)                                                                                                                     |  |                | 8,100,468   |   |                  |   | 10,001,772  |  
|U.S. Treasuries and certificates of deposit (cost: 2007 - $1,990,560; 2006 - $4,584,651)                                                                                               |  |                | 1,990,560   |   |                  |   | 4,584,651   |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|Total investments                                                                                                                                                                      |  |                | 37,461,628  |   |                  |   | 37,879,023  |  
|Cash and cash equivalents                                                                                                                                                              |  |                | 9,893,245   |   |                  |   | 9,685,111   |  
|Accounts receivable, net of allowance for bad debt                                                                                                                                     |  |                | 441,611     |   |                  |   | 534,605     |  
|Prepaid expenses and other assets                                                                                                                                                      |  |                | 396,263     |   |                  |   | 375,007     |  
|Fixed assets, net                                                                                                                                                                      |  |                | 562,431     |   |                  |   | 595,001     |  
|Goodwill                                                                                                                                                                               |  |                | 2,989,132   |   |                  |   | 3,021,163   |  
|Intangible assets, net                                                                                                                                                                 |  |                | 171,460     |   |                  |   | 190,100     |  
|Deferred tax asset                                                                                                                                                                     |  |                | 730,585     |   |                  |   | 760,800     |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|TOTAL ASSETS                                                                                                                                                                           |  |                | 52,646,355  |   |                  |   | 53,040,810  |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|LIABILITIES                                                                                                                                                                            |  |                |             |   |                  |   |             |  
|Accrued expenses                                                                                                                                                                       |  |                | 540,559     |   |                  |   | 595,764     |  
|Deferred revenue                                                                                                                                                                       |  |                | 1,132,346   |   |                  |   | 1,463,884   |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|TOTAL LIABILITIES                                                                                                                                                                      |  |                | 1,672,905   |   |                  |   | 2,059,648   |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|NET ASSETS                                                                                                                                                                             |  | $              | 50,973,450  |   |                  | $ | 50,981,162  |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|Commitments and Contingencies                                                                                                                                                          |  |                |             |   |                  |   |             |  
|Composition of net assets:                                                                                                                                                             |  |                |             |   |                  |   |             |  
|                                                                                                                                                                                       |  |               
|Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued and outstanding                                                                                              |  |                |            |   |                  |   |            |  
|Common stock, $.01 par value, 19,000,000 shares authorized; 8,966,009 shares issued and outstanding at March 31, 2007 and 8,936,009
shares issued and outstanding at December 31, 2006 |  | $              | 89,661      |   |                  | $ | 89,361      |  
|Common stock subscribed                                                                                                                                                                |  |                | 79,875      |   |                  |   |            |  
|Additional paid-in capital                                                                                                                                                             |  |                | 52,310,736  |   |                  |   | 51,993,822  |  
|Accumulated income:                                                                                                                                                                    |  |                |             |   |                  |   |             |  
|Accumulated net operating income                                                                                                                                                       |  |                | 31,954,757  |   |                  |   | 29,721,366  |  
|Net realized loss on investments, net of income taxes                                                                                                                                  |  |                | (3,162,850  | ) |                  |   | (2,065,218  | )
|Net unrealized depreciation of investments, net of deferred income taxes                                                                                                               |  |                | (30,439,453 | ) |                  |   | (28,897,125 | )
|Foreign currency translation adjustment                                                                                                                                                |  |                | 140,724     |   |                  |   | 138,956     |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|Net assets                                                                                                                                                                             |  | $              | 50,973,450  |   |                  | $ | 50,981,162  |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  
|Net asset value per share                                                                                                                                                              |  | $              | 5.69        |   |                  | $ | 5.71        |  
|                                                                                                                                                                                       |  |                |             |   |                  |   |             |  

See accompanying notes



Page 3 of 35



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##### Table of Contents

UTEK Corporation

Consolidated Statements of Operations

(Unaudited)



|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------- | ---------- | - | ---- | - | ----------
|                                                                                                                                                                                                       |  | Three Months Ended March 31
|                                                                                                                                                                                                       |  | 2007                        |            |   | 2006
|Income from operations:                                                                                                                                                                                |  |                             |            |   |      |   |           
|Sale of technology rights                                                                                                                                                                              |  | $                           | 6,701,340  |   |      | $ | 10,214,930
|Consulting and other services                                                                                                                                                                          |  |                             | 1,046,717  |   |      |   | 1,353,481 
|Investment income, net                                                                                                                                                                                 |  |                             | 199,714    |   |      |   | 238,595   
|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|                                                                                                                                                                                                       |  |                             | 7,947,771  |   |      |   | 11,807,006
|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|Expenses:                                                                                                                                                                                              |  |                             |            |   |      |   |           
|Acquisition of technology rights                                                                                                                                                                       |  |                             | 1,303,279  |   |      |   | 2,624,000 
|Salaries and wages                                                                                                                                                                                     |  |                             | 969,341    |   |      |   | 693,618   
|Professional fees                                                                                                                                                                                      |  |                             | 321,947    |   |      |   | 281,426   
|Sales and marketing                                                                                                                                                                                    |  |                             | 631,979    |   |      |   | 809,173   
|General and administrative                                                                                                                                                                             |  |                             | 831,809    |   |      |   | 1,376,494 
|Goodwill impairment                                                                                                                                                                                    |  |                             | 33,030     |   |      |   | 234,940   
|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|                                                                                                                                                                                                       |  |                             | 4,091,385  |   |      |   | 6,019,651 
|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|Income before income taxes                                                                                                                                                                             |  |                             | 3,856,386  |   |      |   | 5,787,355 
|Provision for income taxes                                                                                                                                                                             |  |                             | 1,622,995  |   |      |   | 2,177,781 
|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|Net income from operations                                                                                                                                                                             |  |                             | 2,233,391  |   |      |   | 3,609,574 
|                                                                                                                                                                                                       |  |                            
|Net realized and unrealized gains (losses):                                                                                                                                                            |  |                             |            |   |      |   |           
|Net realized gain (loss) on investments, net of income tax expense (benefit) of ($662,240) and $230,828 for the three months ended
March 31, 2007 and 2006, respectively                               |  |                             | (1,097,632 | ) |      |   | 382,586   
|                                                                                                                                                                                                       |  |                            
|Net change in unrealized appreciation (depreciation) of investments, net of deferred tax expense (benefit) of ($930,540) and $944,199 for the
three months ended March 31, 2007 and 2006, respectively |  |                             | (1,542,328 | ) |      |   | 1,564,966 
|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|Net increase (decrease) in net assets from operations                                                                                                                                                  |  | $                           | (406,569   | ) |      | $ | 5,557,126 
|                                                                                                                                                                                                       |  |                             |            |   |      |   |           
|Net increase (decrease) in net assets from operations per share:                                                                                                                                       |  |                             |            |   |      |   |           
|Basic                                                                                                                                                                                                  |  | $                           | (0.05      | ) |      | $ | 0.66      
|Diluted                                                                                                                                                                                                |  | $                           | (0.05      | ) |      | $ | 0.65      
|Weighted average shares:                                                                                                                                                                               |  |                             |            |   |      |   |           
|Basic                                                                                                                                                                                                  |  |                             | 8,938,565  |   |      |   | 8,427,633 
|Diluted                                                                                                                                                                                                |  |                             | 8,938,565  |   |      |   | 8,506,471 
|                                                                                                                                                                                                       |  |                            
|Dividend declared per share:                                                                                                                                                                           |  |                             |           |   |      | $ | 0.02      

See accompanying notes



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##### Table of Contents

UTEK Corporation

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                                                            |  |                                     |            |   |      |   |             |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | ---------- | - | ---- | - | ----------- | -
|                                                                                                                            |  | For the Three Months Ended March 31 |           
|                                                                                                                            |  | 2007                                |            |   | 2006 |  
|Operating Activities:                                                                                                       |  |                                     |            |   |      |   |             |  
|Net increase (decrease) in net assets from operations                                                                       |  | $                                   | (406,569   | ) |      | $ | 5,557,126   |  
|Adjustments to reconcile net increase (decrease) in net assets from operations to net cash flows from operating activities: |  |                                     |            |   |      |   |             |  
|Change in net unrealized (appreciation) depreciation of investments                                                         |  |                                     | 2,472,868  |   |      |   | (2,509,165  | )
|Depreciation and amortization                                                                                               |  |                                     | 55,142     |   |      |   | 46,204      |  
|Goodwill impairment                                                                                                         |  |                                     | 33,030     |   |      |   | 234,940     |  
|(Gain) loss on sale of investments                                                                                          |  |                                     | 1,759,872  |   |      |   | (613,414    | )
|Loss on disposal of fixed assets                                                                                            |  |                                     | 14,360     |   |      |   |            |  
|Bad debt expense                                                                                                            |  |                                     | 110,011    |   |      |   | 75,797      |  
|Stock compensation                                                                                                          |  |                                     | 104,214    |   |      |   | 80,810      |  
|Deferred income taxes                                                                                                       |  |                                     | 30,215     |   |      |   | 3,352,809   |  
|Investment securities received in connection with the sale of technology rights                                             |  |                                     | (6,701,340 | ) |      |   | (10,214,930 | )
|Consulting and other services rendered in exchange for investment securities                                                |  |                                     | (377,881   | ) |      |   | (402,770    | )
|Changes in operating assets and liabilities:                                                                                |  |                                     |            |   |      |   |             |  
|Accounts receivable                                                                                                         |  |                                     | (17,017    | ) |      |   | 293,933     |  
|Prepaid expenses and other assets                                                                                           |  |                                     | (21,256    | ) |      |   | 53,127      |  
|Deferred revenue                                                                                                            |  |                                     | 9,221      |   |      |   | 448,059     |  
|Accrued expenses                                                                                                            |  |                                     | 167,204    |   |      |   | 191,730     |  
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Net cash flows from operating activities                                                                                    |  |                                     | (2,767,926 | ) |      |   | (3,405,744  | )
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Investing Activities:                                                                                                       |  |                                     |            |   |      |   |             |  
|Acquisition of 22ndStreet of Ybor City, Inc.                                                                                |  |                                     |           |   |      |   | (1,000,000  | )
|Advances to affiliate                                                                                                       |  |                                     |           |   |      |   | (240,752    | )
|Net proceeds from sale (purchases) of short-term investments                                                                |  |                                     | 2,594,091  |   |      |   | (6,212,397  | )
|Proceeds received on sale of equity investments                                                                             |  |                                     | 653,533    |   |      |   | 1,446,373   |  
|Purchases of investment securities                                                                                          |  |                                     | (324,508   | ) |      |   |            |  
|Purchases of fixed assets                                                                                                   |  |                                     | (18,292    | ) |      |   | (17,737     | )
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Net cash flows from investing activities                                                                                    |  |                                     | 2,904,824  |   |      |   | (6,024,513  | )
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Financing Activities:                                                                                                       |  |                                     |            |   |      |   |             |  
|Distributions to stockholders                                                                                               |  |                                     | (179,032   | ) |      |   |            |  
|Net proceeds from issuance of common stock                                                                                  |  |                                     |           |   |      |   | 8,955,182   |  
|Proceeds from exercise of stock options                                                                                     |  |                                     | 248,500    |   |      |   | 239,854     |  
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Net cash flows from financing activities                                                                                    |  |                                     | 69,468     |   |      |   | 9,195,036   |  
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Foreign currency translation adjustment                                                                                     |  |                                     | 1,768      |   |      |   | (1,057      | )
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Increase (decrease) in cash and cash equivalents                                                                            |  |                                     | 208,134    |   |      |   | (236,278    | )
|Cash and cash equivalents at beginning of year                                                                              |  |                                     | 9,685,111  |   |      |   | 5,275,626   |  
|                                                                                                                            |  |                                     |            |   |      |   |             |  
|Cash and cash equivalents at end of period                                                                                  |  | $                                   | 9,893,245  |   |      | $ | 5,039,348   |  
|                                                                                                                            |  |                                     |            |   |      |   |             |  

See accompanying notes



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##### Table of Contents

UTEK Corporation

Consolidated Statements of Cash Flows (continued)

(Unaudited)



|                                                                                           |  |   |        |  |   |          
|------------------------------------------------------------------------------------------ |  | - | ------ |  | - | ---------
|Supplemental Disclosures of Non-Cash Investing and Financing Activities                    |  |   |        |  |   |          
|The Company issued 82,919 shares of common stock to purchase 22ndStreet of Ybor City, Inc. |  |   |        |  | $ | 1,000,000
|                                                                                           |  |   |        |  |   |          
|Proceeds from the exercise of stock options that have not yet been received                |  | $ | 44,375 |  | $ |         
|                                                                                           |  |   |        |  |   |          
|Investment securities received for unearned strategic alliance services                    |  | $ | 37,121 |  | $ | 259,085  
|                                                                                           |  |   |        |  |   |          

See accompanying notes



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##### Table of Contents

UTEK Corporation

Consolidated Statements of Changes in Net Assets

(Unaudited)



|                                                                                                                      |  |                             |            |   |      |   |            |  
|--------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                                                      |  | Three Months Ended March 31 |           
|                                                                                                                      |  | 2007                        |            |   | 2006 |  
|Changes in net assets from operations:                                                                                |  |                             |            |   |      |   |            |  
|Net income from operations                                                                                            |  | $                           | 2,233,391  |   |      | $ | 3,609,574  |  
|Net realized gain (loss) on sale of investments, net of related income taxes                                          |  |                             | (1,097,632 | ) |      |   | 382,586    |  
|Change in net unrealized appreciation (depreciation) of investments, net of related deferred taxes                    |  |                             | (1,542,328 | ) |      |   | 1,564,966  |  
|                                                                                                                      |  |                             |            |   |      |   |            |  
|Net increase (decrease) in net assets from operations                                                                 |  |                             | (406,569   | ) |      |   | 5,557,126  |  
|                                                                                                                      |  |                             |            |   |      |   |            |  
|Distribution to Stockholders:                                                                                         |  |                             |            |   |      |   |            |  
|From net income from operations                                                                                       |  |                             |           |   |      |   | (177,865   | )
|                                                                                                                      |  |                             |            |   |      |   |            |  
|Capital stock transactions:                                                                                           |  |                             |            |   |      |   |            |  
|Proceeds from issuance of common stock, net of offering costs of $1,044,860 for the three months ended March 31, 2006 |  |                             |           |   |      |   | 8,955,182  |  
|Proceeds from the exercise of stock options                                                                           |  |                             | 292,875    |   |      |   | 239,855    |  
|Stock compensation - options                                                                                          |  |                             | 104,214    |   |      |   | 80,810     |  
|Common stock issued in acquisition of 22ndStreet of Ybor City, Inc.                                                   |  |                             |           |   |      |   | 1,000,000  |  
|                                                                                                                      |  |                             |            |   |      |   |            |  
|Net increase in net assets from stock transactions                                                                    |  |                             | 397,089    |   |      |   | 10,275,847 |  
|                                                                                                                      |  |                             |            |   |      |   |            |  
|Foreign currency translation adjustment                                                                               |  |                             | 1,768      |   |      |   | 10,203     |  
|                                                                                                                      |  |                             |            |   |      |   |            |  
|Net increase (decrease) in net assets                                                                                 |  |                             | (7,712     | ) |      |   | 15,665,311 |  
|                                                                                                                      |  |                            
|Net assets at beginning of year                                                                                       |  |                             | 50,981,162 |   |      |   | 44,441,118 |  
|                                                                                                                      |  |                             |            |   |      |   |            |  
|Net assets at end of period                                                                                           |  | $                           | 50,973,450 |   |      | $ | 60,106,429 |  
|                                                                                                                      |  |                             |            |   |      |   |            |  

See accompanying notes



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##### Table of Contents

UTEK Corporation

Financial Highlights

(Unaudited)



|                                                                                                                   |  |                             |            |   |      |   |            |   
|------------------------------------------------------------------------------------------------------------------ |  | --------------------------- | ---------- | - | ---- | - | ---------- | --
|                                                                                                                   |  | Three Months Ended March 31 |           
|                                                                                                                   |  | 2007                        |            |   | 2006 |  
|PER SHARE INFORMATION                                                                                              |  |                             |            |   |      |   |            |   
|Net asset value, beginning of period                                                                               |  | $                           | 5.71       |   |      | $ | 5.58       |   
|Net income from operations (1)                                                                                     |  |                             | .25        |   |      |   | 0.42       |   
|Net change in realized gains (losses) and unrealized appreciation (depreciation) on investments, (after taxes) (2) |  |                             | (.33       | ) |      |   | (0.44      | ) 
|Foreign currency translation adjustment (1)                                                                        |  |                             |           |   |      |   | 0.01       |   
|Net increase from stock transactions (1)                                                                           |  |                             | 0.06       |   |      |   | 1.21       |   
|Distribution to shareholders from net income from operations                                                       |  |                             | 0.00       |   |      |   | (0.02      | ) 
|                                                                                                                   |  |                             |            |   |      |   |            |   
|Net asset value, end of period                                                                                     |  | $                           | 5.69       |   |      | $ | 6.76       |   
|                                                                                                                   |  |                             |            |   |      |   |            |   
|Per share market value, end of period                                                                              |  | $                           | 13.20      |   |      | $ | 12.50      |   
|                                                                                                                   |  |                             |            |   |      |   |            |   
|Investment return, based on market price at end of period                                                          |  |                             | 16         | % |      |   | (9         | %)
|                                                                                                                   |  |                             |            |   |      |   |            |   
|RATIOS/SUPPLEMENTAL DATA                                                                                           |  |                             |            |   |      |   |            |   
|Net assets, end of period                                                                                          |  | $                           | 50,973,450 |   |      | $ | 60,106,429 |   
|                                                                                                                   |  |                            
|Ratio of expenses to average net assets                                                                            |  |                             | 8          | % |      |   | 12         | % 
|Ratio of net income from operations to average net assets                                                          |  |                             | 4          | % |      |   | 7          | % 
|Diluted weighted average number of shares outstanding during the period                                            |  |                             | 8,938,565  |   |      |   | 8,506,471  |   

---

|(1) | Calculated based on diluted weighted average number of shares outstanding during the period.
|--- | --------------------------------------------------------------------------------------------

|(2) | Calculated as a balancing amount necessary to reconcile the change in net assets value per share with the other per share information presented. This amount may not agree with the
aggregate gains and losses for the period because difference in the net asset value at the beginning and end of period does not inherently equal the per share changes of the line items disclosed.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes



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UTEK CORPORATION

Schedule of Investments

March 31, 2007

(unaudited)



|          |  |                            |  |                                                                                    |  |                    |           |       |   |                          |  |      |  
|--------- |  | -------------------------- |  | ---------------------------------------------------------------------------------- |  | ------------------ | --------- | ----- | - | ------------------------ |  | ---- | -
|Shares    |  | Initial Dateof Acquisition |  | Non-Affiliate Investments (1)                                                      |  | OriginalCost Basis |           | Value |   | Percentage of Net Assets | 
|          |  |                            |  |                                                                                   
|100,000   |  | 4/06                       |  | Advanced Refractive Technologies, Inc. Opthalmic technologies Preferred D Stock    |  | $                  | 1,996,176 |       | $ | 1,400,000                |  | 2.7  | %
|97,000    |  | 3/06                       |  | Preferred C Stock                                                                  |  |                    | 2,066,063 |       |   | 1,358,000                |  | 2.7  |  
|97,000    |  | 12/05                      |  | Preferred B Stock                                                                  |  |                    | 1,032,675 |       |   | 705,700                  |  | 1.4  |  
|4,000,000 |  | 5/05                       |  | Common Stock                                                                       |  |                    | 76,368    |       |   | 9,000                    |  | <0.1 | %
|          |  |                            |  | World Energy Solutions, Inc. Energy saving technologies                            |  |                    |           |       |   |                          |  |      |  
|100,000   |  | 10/06                      |  | Preferred A Stock                                                                  |  |                    | 2,632,500 |       |   | 2,511,000                |  | 4.9  |  
|201,672   |  | 9/05                       |  | Common Stock                                                                       |  |                    | 127,714   |       |   | 50,800                   |  | 0.1  |  
|          |  |                            |  | Advanced Medical Isotope Corporation (9) Development of isotopes to treat diseases |  |                    |           |       |   |                          |  |      |  
|95,000    |  | 9/06                       |  | Preferred Stock                                                                    |  |                    | 1,803,417 |       |   | 1,750,400                |  | 3.4  |  
|600,000   |  | 5/06                       |  | Common Stock                                                                       |  |                    | 63,000    |       |   | 336,000                  |  | 0.7  |  
|4,275,000 |  | 3/06                       |  | American Soil Technologies, Inc. Fertilizer innovation Preferred B Stock           |  |                    | 1,571,691 |       |   | 1,496,300                |  | 2.9  |  
|314,286   |  | 9/05                       |  | Common Stock                                                                       |  |                    | 69,663    |       |   | 73,500                   |  | 0.1  |  
|974,360   |  | 8/05                       |  | Broadcast International, Inc. Telecommunications                                   |  |                    | 1,203,392 |       |   | 1,159,500                |  | 2.3  |  
|60,000    |  | 12/05                      |  | Metamorphix Global (privately held) (10) Design and manufacture of countertops     |  |                    | 120,000   |       |   | 120,000                  |  | 0.2  |  
|40,000    |  | 7/06                       |  | Bacterin International(privately held) Bioactive coatings for medical devices      |  |                    | 120,000   |       |   | 120,000                  |  | 0.2  |  
|171,432   |  | 10/06                      |  | GammaCan International, inc. Anti-cancer immunotherapy                             |  |                    | 83,016    |       |   | 93,300                   |  | 0.2  |  
|208,333   |  | 1/07                       |  | Ecosphere Technolgies, Inc. Defense, homeland security and global ship repair      |  |                    | 83,300    |       |   | 83,300                   |  | 0.2  |  
|120,000   |  | 4/05                       |  | Rival Technologies, Inc. Diesel engine technologies                                |  |                    | 82,104    |       |   | 81,600                   |  | 0.2  |  
|109,091   |  | 7/06                       |  | Turbine Truck Engines, Inc. Heavy-duty highway truck engines                       |  |                    | 72,000    |       |   | 63,800                   |  | 0.1  |  
|180,000   |  | 5/06                       |  | U.S. Starcom, Inc. Communications services and products                            |  |                    | 17,181    |       |   | 55,100                   |  | 0.1  |  
|33,825    |  | 5/05                       |  | XLER8, Inc. (Vitacube Systems, Inc). Specialty nutraceuticals                      |  |                    | 16,427    |       |   | 52,700                   |  | 0.1  |  
|120,000   |  | 1/07                       |  | NeoStem, Inc. Stem
cell banking services                                           |  |                    | 61,440    |       |   | 50,900                   |  | 0.1  |  
|176,250   |  | 4/05                       |  | Maelor Plc(5) Products for niche healthcare applications                           |  |                    | 24,147    |       |   | 39,800                   |  | 0.1  |  
|221,033   |  | 4/04                       |  | Power3 Medical Products, Inc. Healthcare products                                  |  |                    | 201,599   |       |   | 30,500                   |  | 0.1  |  
|2,011,765 |  | 5/06                       |  | Rheologics, Inc. Study
of blood viscosity                                          |  |                    | 86,100    |       |   | 30,200                   |  | 0.1  |  
|697,860   |  | 8/06                       |  | Magnitude Information Systems, Inc. Computer ergonomics                            |  |                    | 25,920    |       |   | 30,100                   |  | 0.1  |  
|825,852   |  | 7/06                       |  | MM2 Group, Inc. Financial consulting for nutraceuticals                            |  |                    | 32,685    |       |   | 29,700                   |  | 0.1  |  
|16,085    |  | 11/05                      |  | Shumate Industries, Inc. Energy field service applications                         |  |                    | 7,393     |       |   | 26,400                   |  | 0.1  |  



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|          |  |       |  |                                                                              |  |   |            |  |   |            |  |      |  
|--------- |  | ----- |  | ---------------------------------------------------------------------------- |  | - | ---------- |  | - | ---------- |  | ---- | -
|1,200,000 |  | 10/06 |  | Laserlock Technologies, Inc. Security solutions for the gaming industry      |  |   | 24,100     |  |   | 26,500     |  | 0.1  |  
|1,250,010 |  | 5/06  |  | In Veritas Medical Diagnostics, Inc. Medical devices designs and testing     |  |   | 74,400     |  |   | 26,400     |  | 0.1  |  
|269,230   |  | 8/06  |  | Protocall Technologies, Inc. On-demand software and entertainment            |  |   | 11,577     |  |   | 26,100     |  | <0.1 |  
|258,064   |  | 5/06  |  | IPORUSSIA, Inc. Business advisory services provider                          |  |   | 24,000     |  |   | 25,500     |  | <0.1 |  
|9,748     |  | 4/04  |  | Xethanol Corporation (10) Bioethanol and derivative products                 |  |   | 88,836     |  |   | 23,400     |  | <0.1 |  
|122,449   |  | 1/06  |  | 5G Wireless Communications, Inc. Broadband wireless                          |  |   | 78,851     |  |   | 13,500     |  | <0.1 |  
|781,703   |  | 3/04  |  | Health Sciences Group, Inc. (7) Nutraceutical and pharmaceutical products    |  |   | 570,643    |  |   | 12,600     |  | <0.1 |  
|808,529   |  | 4/04  |  | HydroFlo, Inc. Treatment and purification of water                           |  |   | 125,861    |  |   | 8,500      |  | <0.1 |  
|232,211   |  | 5/05  |  | Preservation Sciences, Inc. Metal and concrete coatings                      |  |   |           |  |   | 4,400      |  | <0.1 |  
|387,097   |  | 6/06  |  | Tradequest International, Inc. Provider of voice over internet protocol      |  |   | 76,092     |  |   | 3,900      |  | <0.1 |  
|785,000   |  | 3/04  |  | Swiss Medica, Inc. Health bioscience products                                |  |   | 146,443    |  |   | 3,500      |  | <0.1 |  
|750,000   |  | 10/04 |  | U.S. Wireless Online, Inc. Wireless broadband networks                       |  |   | 66,000     |  |   | 2,900      |  | <0.1 |  
|666,668   |  | 9/05  |  | Quest Minerals & Mining Corporation Coal and mineral mining                  |  |   | 69,044     |  |   | 2,700      |  | <0.1 |  
|105,600   |  | 5/06  |  | HumWare Media Corporation Media advertising                                  |  |   | 14,236     |  |   | 2,400      |  | <0.1 |  
|660,000   |  | 6/05  |  | BP International, Inc. Shade structures                                      |  |   | 78,852     |  |   | 2,200      |  | <0.1 |  
|85,714    |  | 9/05  |  | New Life Scientific, Inc. Pharmaceutical biotechnologies                     |  |   | 81,816     |  |   | 2,300      |  | <0.1 |  
|384,000   |  | 7/06  |  | aeroTelesis, Inc. Satellite and wireless bandwidth utilization               |  |   | 33,394     |  |   | 1,000      |  | <0.1 |  
|37,500    |  | 6/05  |  | Modern Technology Corporation Technology development and acquisition company |  |   | 82,152     |  |   | 500        |  | <0.1 |  
|2,482,521 |  | 2/06  |  | UBA Technology, Inc. Software development Common Stock                       |  |   | 1,691,419  |  |   |           |  | 0.0  |  
|95,000    |  | 4/06  |  | Convertible Preferred A                                                      |  |   | 1,619,849  |  |   |           |  | 0.0  |  
|140,000   |  | 3/05  |  | AdAl Group, Inc.(5) Aluminum extruded products manufacturer                  |  |   | 72,912     |  |   |           |  | 0.0  |  
|7,787,565 |  | 6/05  |  | Trio Industries Group, Inc. Protective powder coating                        |  |   | 12,330,401 |  |   |           |  | 0.0  |  
|          |  |       |  | KP Renewables Plc (Kwikpower International Plc) (5) Renewable energy         |  |   |            |  |   |            |  |      |  
|          |  | 5/06  |  | Convertible Debenture, due 5/10/07                                           |  |   | 4,433,401  |  |   |           |  | 0.0  |  
|          |  |       |  |                                                                              | 
|          |  | 9/05  |  | Convertible Debenture, due 9/30/06                                           |  |   | 1,884,920  |  |   |           |  | 0.0  |  
|          |  |       |  |                                                                              | 
|50,000    |  | 3/05  |  | Common Stock                                                                 |  |   | 94,500     |  |   |           |  | 0.0  |  
|          |  |       |  |                                                                              | 
|261,234   |  | 7/04  |  | eLinear, Inc. (5)                                                            |  |   | 190,763    |  |   |           |  | 0.0  |  
|          |  |       |  |                                                                              |  |   |            |  |   |            |  |      |  
|          |  |       |  | Telecommunication security provider                                          |  |   |            |  |   |            |  |      |  
|          |  |       |  | Total Investments in Non-Affiliates                                          |  | $ | 37,640,433 |  | $ | 11,945,900 |  | 23.4 | %
|          |  |       |  |                                                                              |  |   |            |  |   |            |  |      |  
|          |  |       |  |                                                                              | 
|          |  |       |  | Affiliate Investments (2)                                                    |  |   |            |  |   |            | 
|          |  |       |  | Cyberlux Corporation(8) LED lighting solutions                               |  |   |            |  |   |            |  |      |  
|148,000   |  | 11/06 |  | Preferred C Stock                                                            |  | $ | 2,181,640  |  | $ | 2,104,700  |  | 4.1  |  



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|            |  |       |  |                                                                                      |  |   |            |  |   |            |  |      |  
|----------- |  | ----- |  | ------------------------------------------------------------------------------------ |  | - | ---------- |  | - | ---------- |  | ---- | -
|27,981,484  |  | 6/06  |  | Common Stock                                                                         |  |   | 537,920    |  |   | 201,500    |  | 0.4  |  
|            |  |       |  |                                                                                      | 
|7,933,106   |  | 4/04  |  | Manakoa Services Company (9) Compliance analysis and monitoring Common Stock         |  |   | 2,133,496  |  |   | 387,700    |  | 0.8  |  
|95,000      |  | 1/07  |  | Preferred Series B Stock                                                             |  |   | 2,280,000  |  |   | 1,900,000  |  | 3.7  |  
|            |  |       |  |                                                                                      | 
|9,900,717   |  | 4/05  |  | Fuel FX International, Inc. Reductional environmental emissions Common Stock         |  |   | 1,980,142  |  |   | 846,500    |  | 1.7  |  
|100,000     |  | 1/06  |  | Preferred Series B Stock                                                             |  |   | 2,100,000  |  |   | 945,000    |  | 1.9  |  
|            |  |       |  |                                                                                      | 
|            |  |       |  | Material Technologies, Inc. (8) Metal fatigue detection                              |  |   |            |  |   |            |  |      |  
|6,368,804   |  | 9/04  |  | Common Stock                                                                         |  |   | 1,839,969  |  |   | 1,576,300  |  | 3.1  |  
|            |  |       |  |                                                                                      | 
|47,500      |  | 1/07  |  | Convertible Preferred Series E                                                       |  |   | 694,640    |  |   | 694,700    |  | 1.4  |  
|70,006,142  |  | 5/06  |  | Avalon Oil and Gas, Inc. Oil and gas producers                                       |  |   | 2,782,089  |  |   | 1,638,100  |  | 3.2  |  
|4,444,876   |  | 5/06  |  | DME Interactive Holdings, Inc. Multi-media entertainment                             |  |   | 769,820    |  |   | 1,246,800  |  | 2.4  |  
|2,040,000   |  | 4/06  |  | Cytodyn, Inc. Development stage biotechnology company Common stock                   |  |   | 3,640,772  |  |   | 953,700    |  | 1.9  |  
|100,000     |  | 1/07  |  | Preferred Series B Stock                                                             |  |   | 845,000    |  |   | 676,000    |  | 1.3  |  
|            |  |       |  |                                                                                      | 
|164,951,070 |  | 8/06  |  | Cargo Connection Logistics Holdings, Inc. World trade logistics                      |  |   | 1,033,434  |  |   | 538,400    |  | 1.0  |  
|33,730,000  |  | 4/05  |  | WebSky Inc. Broadband
wireless                                                       |  |   | 897,750    |  |   | 472,200    |  | 0.9  |  
|7,165,000   |  | 5/06  |  | NetFabric Holdings, Inc. Information technology services                             |  |   | 608,694    |  |   | 394,100    |  | 0.8  |  
|461,222,608 |  | 9/05  |  | GS Energy Corporation (INSEQ Corp.) Waste minimization                               |  |   | 2,434,783  |  |   | 389,700    |  | 0.8  |  
|16,037,500  |  | 7/06  |  | Liberty Diversified Holdings, Inc. Printing and packaging Common Stock               |  |   | 1,245,258  |  |   | 20,900     |  | <0.1 |  
|63,981      |  | 2/07  |  | Preferred Series B Stock                                                             |  |   | 382,800    |  |   | 319,900    |  | 0.6  |  
|            |  |       |  |                                                                                      | 
|4,221,165   |  | 4/01  |  | Stealth MediaLabs, Inc. Software products                                            |  |   | 1,708,000  |  |   | 92,900     |  | 0.2  |  
|2,560,000   |  | 8/04  |  | TenthGate, Inc.                                                                      |  |   | 40,000     |  |   | 25,600     |  | 0.1  |  
|            |  |       |  |                                                                                      |  |   |            |  |   |            |  |      |  
|            |  |       |  | Healthcare related products and services                                             |  |   |            |  |   |            |  |      |  
|            |  |       |  | Total Investments in Affiliates                                                      |  | $ | 30,136,207 |  | $ | 15,424,700 |  | 30.3 | %
|            |  |       |  |                                                                                      |  |   |            |  |   |            |  |      |  
|            |  |       |  |                                                                                      | 
|            |  |       |  | Control Investments (3)                                                              |  |   |            |  |   |            | 
|1,000       |  | 11/99 |  | UTEK Real Estate Holdings, Inc., (privately held) Real estate development            |  | $ | 4,131,574  |  | $ | 3,467,000  |  | 6.8  | %
|63,094,005  |  | 3/06  |  | Klegg Electronics, Inc. Manufacturer/distributor for retail electronic products      |  |   | 4,290,524  |  |   | 2,195,700  |  | 4.3  |  
|21,933,451  |  | 8/05  |  | Industrial Biotechnology Corporation Manufactures and markets flavors and fragrances |  |   | 6,351,998  |  |   | 712,800    |  | 1.4  |  
|(6)         |  | 1/06  |  | UTEK Real Estate Holdings, Inc. (privately held) (Demand note, interest rate @ 5%)   |  |   | 1,724,968  |  |   | 1,724,968  |  | 3.4  |  
|            |  |       |  |                                                                                      |  |   |            |  |   |            |  |      |  
|            |  |       |  | Total Investments in Control Investments                                             |  | $ | 16,499,064 |  | $ | 8,100,468  |  | 15.9 | %
|            |  |       |  |                                                                                      |  |   |            |  |   |            |  |      |  



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##### Table of Contents

|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|--------- |  | ---- |  | ---------------------------------------------------------------- |  | - | ---------- |  | - | ---------- |  | ----- | -
|          |  |      |  |                                                                  | 
|          |  |      |  | U.S. Treasuries (4)                                              |  |   |            |  |   |            | 
|Par Value |  |      |  | U.S. Treasuries:                                                 |  |   |            |  |   |            |  |       |  
|1,000,000 |  | 2/07 |  | United States Treasury, maturity 4/19/07, interest rate @ 4.988% |  | $ | 997,640    |  | $ | 997,640    |  | 2.0   | %
|1,000,000 |  | 3/07 |  | United States Treasury, maturity 5/24/07, interest rate @ 4.866% |  |   | 992,920    |  |   | 992,920    |  | 1.9   |  
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Total U.S. Treasuries                                            |  | $ | 1,990,560  |  | $ | 1,990,560  |  | 3.9   | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | TOTAL INVESTMENTS                                                |  | $ | 86,266,264 |  | $ | 37,461,628 |  | 73.5  | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Cash and other assets, less liabilities                          |  |   |            |  |   | 13,511,822 |  | 26.5  | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Net assets at March 31, 2007                                     |  |   |            |  | $ | 50,973,450 |  | 100.0 | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  

---

Notes to Schedule of Investments:



| |  |  | Except where otherwise noted, all of our investments listed above are in common stock of companies that are publicly quoted on the OTC Bulletin Board or listed on
the American Stock Exchange or other similar markets.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The above investments, with the exception of the U.S. Treasuries, 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 securities for which there is no readily available market value is determined in good faith by the Board of Directors. In making its determination,
the Board of Directors has considered valuation appraisals provided by an independent valuation service provider. (See Note 3 to the consolidated financial statements.)
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | As of March 31, 2007, all of the securities that we own are subject to legal restrictions on resale. As a result, our ability to sell or otherwise transfer the
securities we hold in our portfolio is limited.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(1) | Non-affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which the Company owns less than 5% of the voting securities.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which the Company owns at least 5% but not more than 25% of the voting
securities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Control investments are generally defined under the Investment Company Act of 1940 as companies in which the Company
owns more than 25% of the voting securities. We own 100% of UTEK Real Estate Holdings, Inc. (UREHI), which holds four investments: Rosbon LLC, ABM of Tampa Bay, Inc., 22ndStreet of Ybor City, Inc. and Ybor City Group, Inc. UREHI holds 150 equity interests of the total equity interests outstanding of Rosbon LLC and all of the
outstanding shares of capital stock of ABM of Tampa Bay, Inc., 22ndStreet of Ybor City, Inc. and Ybor City Group,
Inc.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The Company invests excess cash in a number of U.S. Treasury Bills. These short-term investments normally have three month to one year maturities and do not qualify as cash or cash
equivalents.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Non-U.S. company or the companys principal place of business is outside the U.S.
|--- | ---------------------------------------------------------------------------------

|(6) | Investment consists of a loan receivable with subsidiaries of UTEK Real Estate Holdings, Inc.
|--- | ---------------------------------------------------------------------------------------------

|(7) | During the period ended March 31, 2007, the Company reclassified this investment from Affiliate investments to Non-affiliate investments based on the criteria in notes
(1) and (2).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | During the period ended March 31, 2007, the Company reclassified this investment from Non-affiliated investments to Affiliate investments based on the criteria in notes
(1) and (2).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Advanced Medical Isotope Corporation and Manakoa Services Company are related parties through common management.
|--- | ----------------------------------------------------------------------------------------------------------------

|(10) | Xethanol Corporation and Metamorphix Global are parties related though common management.
|---- | -----------------------------------------------------------------------------------------

See accompanying notes



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UTEK CORPORATION

Schedule of Investments

December 31, 2006



|          |  |                            |  |                                                                                     |  |                    |           |       |   |                          |  |     |  
|--------- |  | -------------------------- |  | ----------------------------------------------------------------------------------- |  | ------------------ | --------- | ----- | - | ------------------------ |  | --- | -
|Shares    |  | Initial Dateof Acquisition |  | Non-Affiliate Investments (1)                                                       |  | OriginalCost Basis |           | Value |   | Percentage of Net Assets | 
|          |  |                            |  |                                                                                    
|100,000   |  | 4/06                       |  | Advanced Refractive Technologies, Inc. Opthalmic technologies Preferred D Stock     |  | $                  | 1,996,176 |       | $ | 1,400,000                |  | 2.7 | %
|97,000    |  | 3/06                       |  | Preferred C Stock                                                                   |  |                    | 2,066,063 |       |   | 1,358,000                |  | 2.7 |  
|97,000    |  | 12/05                      |  | Preferred B Stock                                                                   |  |                    | 1,032,675 |       |   | 705,700                  |  | 1.4 |  
|5,533,333 |  | 5/05                       |  | Common Stock                                                                        |  |                    | 158,364   |       |   | 26,200                   |  | 0.1 |  
|          |  |                            |  | World Energy Solutions, Inc. Energy saving technologies                             |  |                    |           |       |   |                          |  |     |  
|100,000   |  | 10/06                      |  | Preferred A Stock                                                                   |  |                    | 2,632,500 |       |   | 2,430,000                |  | 4.8 |  
|201,672   |  | 9/05                       |  | Common Stock                                                                        |  |                    | 127,714   |       |   | 36,300                   |  | 0.1 |  
|          |  |                            |  | Advanced Medical Isotope Corporation (11) Development of isotopes to treat diseases |  |                    |           |       |   |                          |  |     |  
|95,000    |  | 9/06                       |  | Preferred Stock                                                                     |  |                    | 1,803,417 |       |   | 1,591,300                |  | 3.1 |  
|600,000   |  | 5/06                       |  | Common Stock                                                                        |  |                    | 63,000    |       |   | 96,000                   |  | 0.2 |  
|          |  |                            |  | Cyberlux Corporation LED lighting solutions                                         |  |                    |           |       |   |                          |  |     |  
|98,000    |  | 11/06                      |  | Preferred C Stock                                                                   |  |                    | 1,605,240 |       |   | 1,605,200                |  | 3.1 |  
|1,481,484 |  | 6/06                       |  | Common Stock                                                                        |  |                    | 80,820    |       |   | 40,000                   |  | 0.1 |  
|4,275,000 |  | 3/06                       |  | American Soil Technologies, Inc. Fertilizer innovation Preferred B Stock            |  |                    | 1,571,691 |       |   | 1,432,100                |  | 2.8 |  
|317,857   |  | 9/05                       |  | Common Stock                                                                        |  |                    | 70,388    |       |   | 56,700                   |  | 0.1 |  
|6,368,802 |  | 9/04                       |  | Material Technologies, Inc. Metal fatigue detection                                 |  |                    | 1,839,969 |       |   | 891,600                  |  | 1.7 |  
|984,360   |  | 8/05                       |  | Broadcast International, Inc. Telecommunications                                    |  |                    | 1,223,592 |       |   | 863,800                  |  | 1.7 |  
|2,482,521 |  | 2/06                       |  | UBA Technology, Inc. (8) Software development Common Stock                          |  |                    | 1,691,419 |       |   | 600                      |  | <.1 |  
|95,000    |  | 4/06                       |  | Convertible Preferred A                                                             |  |                    | 1,619,849 |       |   | 714,600                  |  | 1.4 |  
|146,586   |  | 4/04                       |  | Xethanol Corporation(8) (12) Bioethanol and derivative products                     |  |                    | 964,599   |       |   | 299,500                  |  | 0.6 |  
|171,432   |  | 11/05                      |  | Shumate Industries, Inc. Energy field service applications                          |  |                    | 78,852    |       |   | 205,200                  |  | 0.4 |  
|60,000    |  | 12/05                      |  | Metamorphix Global (privately held) (12) Design and manufacture of countertops      |  |                    | 120,000   |       |   | 120,000                  |  | 0.2 |  
|40,000    |  | 7/06                       |  | Bacterin International(privately held) Bioactive coatings for medical devices       |  |                    | 120,000   |       |   | 120,000                  |  | 0.2 |  
|120,000   |  | 4/05                       |  | Rival Technologies, Inc. Diesel engine technologies                                 |  |                    | 82,104    |       |   | 96,900                   |  | 0.2 |  
|1,250,010 |  | 5/06                       |  | In Veritas Medical Diagnostics, Inc. Medical devices designs and testing            |  |                    | 74,400    |       |   | 63,800                   |  | 0.1 |  
|171,432   |  | 10/06                      |  | GammaCan International, inc. Anti-cancer immunotherapy                              |  |                    | 83,016    |       |   | 51,400                   |  | 0.1 |  
|109,091   |  | 7/06                       |  | Turbine Truck Engines, Inc. Heavy-duty highway truck engines                        |  |                    | 72,000    |       |   | 39,300                   |  | 0.1 |  
|176,250   |  | 4/05                       |  | Maelor Plc(5) Products for niche healthcare applications                            |  |                    | 24,147    |       |   | 34,200                   |  | 0.1 |  
|1,411,765 |  | 7/06                       |  | MM2 Group, Inc. Financial consulting for nutraceuticals                             |  |                    | 56,004    |       |   | 33,900                   |  | 0.1 |  



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|          |  |       |  |                                                                              |  |            |  |        |  |    
|--------- |  | ----- |  | ---------------------------------------------------------------------------- |  | ---------- |  | ------ |  | ---
|2,011,765 |  | 5/06  |  | Rheologics, Inc. (8) Study of blood viscosity                                |  | 86,100     |  | 28,200 |  | 0.1
|1,635,000 |  | 3/04  |  | Swiss Medica, Inc. Health bioscience products                                |  | 304,988    |  | 28,000 |  | 0.1
|1,200,000 |  | 10/06 |  | Laserlock Technologies, Inc. Security solutions for the gaming industry      |  | 24,100     |  | 20,100 |  | <.1
|269,230   |  | 8/06  |  | Protocall Technologies, Inc. On-demand software and entertainment            |  | 11,577     |  | 19,500 |  | <.1
|33,825    |  | 5/05  |  | XLER8, Inc. (Vitacube Systems, Inc). Specialty nutraceuticals                |  | 16,427     |  | 18,900 |  | <.1
|387,097   |  | 6/06  |  | Tradequest International, Inc. Provider of voice over internet protocol      |  | 76,092     |  | 18,600 |  | <.1
|697,860   |  | 8/06  |  | Magnitude Information Systems, Inc. Computer ergonomics                      |  | 25,920     |  | 17,800 |  | <.1
|232,211   |  | 5/05  |  | Preservation Sciences, Inc. Metal and concrete coatings                      |  |           |  | 17,800 |  | <.1
|122,449   |  | 1/06  |  | 5G Wireless Communications, Inc. Broadband wireless                          |  | 78,851     |  | 14,300 |  | <.1
|221,033   |  | 4/04  |  | Power3 Medical Products, Inc. Healthcare products                            |  | 201,599    |  | 13,900 |  | <.1
|180,000   |  | 5/06  |  | U.S. Starcom, Inc. Communications services and products                      |  | 17,181     |  | 13,800 |  | <.1
|750,000   |  | 10/04 |  | U.S. Wireless Online, Inc. Wireless broadband networks                       |  | 66,000     |  | 9,100  |  | <.1
|258,064   |  | 5/06  |  | IPORUSSIA, Inc. Business advisory services provider                          |  | 24,000     |  | 8,800  |  | <.1
|115,069   |  | 7/06  |  | Inverted Paradigms Corporation Safety and security software                  |  | 32,510     |  | 6,400  |  | <.1
|105,600   |  | 5/06  |  | HumWare Media Corporation Media advertising                                  |  | 14,236     |  | 5,900  |  | <.1
|384,000   |  | 7/06  |  | aeroTelesis, Inc. Satellite and wireless bandwidth utilization               |  | 33,394     |  | 4,300  |  | <.1
|774,951   |  | 6/06  |  | Universal Detection Technology Detection devices for bacterial spores        |  | 30,378     |  | 3,600  |  | <.1
|660,000   |  | 6/05  |  | BP International, Inc. Shade structures                                      |  | 78,852     |  | 3,300  |  | <.1
|2,335,977 |  | 7/06  |  | PracticeXpert, Inc. Operational efficiencies for medical practitioners       |  | 27,172     |  | 3,300  |  | <.1
|808,529   |  | 4/04  |  | HydroFlo, Inc. (6) Business development company                              |  | 125,861    |  | 3,000  |  | <.1
|85,714    |  | 9/05  |  | New Life Scientific, Inc. Pharmaceutical biotechnologies                     |  | 81,816     |  | 2,900  |  | <.1
|666,668   |  | 9/05  |  | Quest Minerals & Mining Corporation Coal and mineral mining                  |  | 69,044     |  | 1,800  |  | <.1
|50,925    |  | 7/06  |  | Global General Technologies, Inc. Homeland security systems                  |  | 13,228     |  | 1,700  |  | <.1
|37,500    |  | 6/05  |  | Modern Technology Corporation Technology development and acquisition company |  | 82,152     |  | 1,400  |  | <.1
|140,000   |  | 3/05  |  | AdAl Group, Inc. (5) Aluminum extruded products manufacturer                 |  | 72,912     |  |       |  | 0.0
|7,787,565 |  | 6/05  |  | Trio Industries Group, Inc. (8) Protective powder coating                    |  | 12,330,401 |  |       |  | 0.0
|          |  |       |  | KP Renewables Plc (Kwikpower International Plc) (5) Renewable energy         |  |            |  |        |  |    
|          |  | 5/06  |  | Convertible Debenture, due 5/10/07                                           |  | 4,433,401  |  |       |  | 0.0
|          |  |       |  |                                                                              | 
|          |  | 9/05  |  | Convertible Debenture, due 9/30/06                                           |  | 1,884,920  |  |       |  | 0.0
|          |  |       |  |                                                                              | 
|50,000    |  | 3/05  |  | Common Stock                                                                 |  | 94,500     |  |       |  | 0.0



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|            |  |       |  |                                                                                           |  |   |            |  |   |            |  |      |  
|----------- |  | ----- |  | ----------------------------------------------------------------------------------------- |  | - | ---------- |  | - | ---------- |  | ---- | -
|261,234     |  | 7/04  |  | eLinear, Inc. (5) Telecommunication security provider                                     |  |   | 190,763    |  |   |           |  | 0.0  |  
|            |  |       |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |       |  | Total Investments in Non-Affiliates                                                       |  | $ | 41,786,374 |  | $ | 14,578,700 |  | 28.6 | %
|            |  |       |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |       |  |                                                                                           | 
|            |  |       |  | Affiliate Investments (2)                                                                 |  |   |            |  |   |            | 
|9,900,717   |  | 4/05  |  | Fuel FX International, Inc. Reductional environmental emissions Common stock              |  | $ | 1,980,142  |  | $ | 1,831,600  |  | 3.6  | %
|100,000     |  | 1/06  |  | Preferred Series B Stock                                                                  |  |   | 2,100,000  |  |   | 990,000    |  | 1.9  |  
|4,444,876   |  | 5/06  |  | DME Interactive Holdings, Inc. (9) Multi-media entertainment                              |  |   | 769,820    |  |   | 1,344,600  |  | 2.6  |  
|35,131,142  |  | 5/06  |  | Avalon Oil and Gas, Inc. Oil and gas producers                                            |  |   | 1,986,939  |  |   | 864,200    |  | 1.7  |  
|2,040,000   |  | 4/06  |  | Cytodyn, Inc. (9) Development stage biotechnology company                                 |  |   | 3,640,772  |  |   | 856,800    |  | 1.7  |  
|33,730,000  |  | 4/05  |  | WebSky Inc. Broadband
wireless                                                            |  |   | 897,750    |  |   | 674,600    |  | 1.3  |  
|164,951,070 |  | 8/06  |  | Cargo Connection Logistics Holdings, Inc. World trade logistics                           |  |   | 1,033,434  |  |   | 643,300    |  | 1.3  |  
|8,512,064   |  | 4/04  |  | Manakoa Services Company (11) Compliance analysis and monitoring                          |  |   | 2,306,893  |  |   | 415,000    |  | 0.8  |  
|7,165,000   |  | 5/06  |  | NetFabric Holdings, Inc. (9) Information technology services                              |  |   | 608,694    |  |   | 394,000    |  | 0.8  |  
|461,222,608 |  | 9/05  |  | GS Energy Corporation (INSEQ Corp.) Waste minimization                                    |  |   | 2,434,783  |  |   | 269,800    |  | 0.5  |  
|16,037,500  |  | 7/06  |  | Liberty Diversified Holdings, Inc. Printing and packaging                                 |  |   | 1,245,258  |  |   | 187,600    |  | 0.4  |  
|4,221,165   |  | 4/01  |  | Stealth MediaLabs, Inc. Software products                                                 |  |   | 1,708,000  |  |   | 121,600    |  | 0.2  |  
|3,023,703   |  | 3/04  |  | Health Sciences Group, Inc. Nutraceutical and pharmaceutical products                     |  |   | 1,601,963  |  |   | 95,200     |  | 0.2  |  
|2,560,000   |  | 8/04  |  | TenthGate, Inc.(9)                                                                        |  |   | 40,000     |  |   | 25,600     |  | <.1  |  
|            |  |       |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |       |  | Healthcare related products and services                                                  |  |   |            |  |   |            |  |      |  
|            |  |       |  | Total Investments in Affiliates                                                           |  | $ | 22,354,448 |  | $ | 8,713,900  |  | 17.1 | %
|            |  |       |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |       |  |                                                                                           | 
|            |  |       |  | Control Investments (3)                                                                   |  |   |            |  |   |            | 
|1,000       |  | 11/99 |  | UTEK Real Estate Holdings, Inc., (privately held) Real estate development                 |  | $ | 4,131,574  |  | $ | 3,614,500  |  | 7.1  | %
|52,192,755  |  | 3/06  |  | Klegg Electronics, Inc. (10) Manufacturer/distributor for retail electronic products      |  |   | 3,820,274  |  |   | 3,209,900  |  | 6.3  |  
|21,933,451  |  | 8/05  |  | Industrial Biotechnology Corporation (10) Manufactures and markets flavors and fragrances |  |   | 6,351,998  |  |   | 1,995,900  |  | 3.9  |  
|(7)         |  | 1/06  |  | UTEK Real Estate Holdings, Inc. (privately held)                                          |  |   | 1,181,472  |  |   | 1,181,472  |  | 2.3  |  
|            |  |       |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |       |  | (Demand note, interest rate @ 5%)                                                         |  |   |            |  |   |            |  |      |  
|            |  |       |  | Total Investments in Control Investments                                                  |  | $ | 15,485,318 |  | $ | 10,001,772 |  | 19.6 | %
|            |  |       |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |       |  |                                                                                           | 
|            |  |       |  | U.S. Treasuries and Certificates of Deposit (4)                                           |  |   |            |  |   |            | 
|Par Value   |  |       |  | U.S. Treasuries:                                                                          |  |   |            |  |   |            |  |      |  
|            |  |       |  |                                                                                           | 
|2,000,000   |  | 8/06  |  | United States Treasury, maturity 1/18/07, interest rate @ 5.045%                          |  | $ | 1,996,481  |  | $ | 1,996,481  |  | 3.9  | %
|            |  |       |  |                                                                                           | 
|1,500,000   |  | 8/06  |  | United States Treasury, maturity 2/01/07, interest rate @ 4.952%                          |  |   | 1,494,092  |  |   | 1,494,092  |  | 2.9  |  



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|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  
|--------- |  | ---- |  | ------------------------------------------------------------------ |  | - | ---------- |  | - | ---------- |  | ----- | -
|1,000,000 |  | 8/06 |  | United States Treasury, maturity 2/15/07, interest rate @ 4.751%   |  |   | 994,078    |  |   | 994,078    |  | 1.9   |  
|          |  |      |  | Total U.S. Treasuries                                              |  | $ | 4,484,651  |  | $ | 4,484,651  |  | 8.8   | %
|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  
|          |  |      |  | Certificates of Deposit:                                           |  |   |            |  |   |            |  |       |  
|100,000   |  | 8/06 |  | Washington Mutual Bank CD, maturity 1/30/07, interest rate @ 5.00% |  | $ | 100,000    |  | $ | 100,000    |  | 0.2   | %
|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  
|          |  |      |  | Total Certificates of Deposit                                      |  | $ | 100,000    |  | $ | 100,000    |  | 0.2   | %
|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  
|          |  |      |  | Total Investments in U.S. Treasuries and CDs                       |  | $ | 4,584,651  |  | $ | 4,584,651  |  | 9.0   | %
|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  
|          |  |      |  | TOTAL INVESTMENTS                                                  |  | $ | 84,210,791 |  | $ | 37,879,023 |  | 74.3  | %
|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  
|          |  |      |  | Cash and other assets, less liabilities                            |  |   |            |  |   | 13,102,139 |  | 25.7  | %
|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  
|          |  |      |  | Net assets at December 31, 2006                                    |  |   |            |  | $ | 50,981,162 |  | 100.0 | %
|          |  |      |  |                                                                    |  |   |            |  |   |            |  |       |  

---

Notes to Schedule of Investments:



| |  |  | Except where otherwise noted, all of our investments listed above are in common stock of companies that are publicly quoted on the OTC Bulletin Board or listed on
the American Stock Exchange or other similar markets.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The above investments, with the exception of the U.S. Treasuries and certificates of deposits, 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 securities for which there is no readily available market value is determined in good faith by the Board of Directors. In making its determination,
the Board of Directors has considered valuation appraisals provided by an independent valuation service provider. (See Note 3 to the consolidated financial statements.)
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | As of December 31, 2006, all of the securities that we own are subject to legal restrictions on resale. As a result, our ability to sell or otherwise transfer
the securities we hold in our portfolio is limited.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(1) | Non-affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which the Company owns less than 5% of the voting securities.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Affiliate investments are generally defined under the Investment Company Act of 1940 as companies in which the Company owns at least 5% but not more than 25% of the voting
securities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Control investments are generally defined under the Investment Company Act of 1940 as companies in which the Company
owns more than 25% of the voting securities. We own 100% of UTEK Real Estate Holdings, Inc. (UREHI), which holds four investments: Rosbon LLC, ABM of Tampa Bay, Inc., 22ndStreet of Ybor City, Inc. and Ybor City Group, Inc. UREHI holds 150 equity interests of the total equity interests outstanding of Rosbon LLC and all of the
outstanding shares of capital stock of ABM of Tampa Bay, Inc., 22ndStreet of Ybor City, Inc. and Ybor City Group,
Inc.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The Company invests excess cash in a number of U.S. Treasury Bills and certificates of deposit. These short-term investments normally have three month to one year maturities and do
not qualify as cash or cash equivalents.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Non-U.S. company or the companys principal place of business is outside the U.S.
|--- | ---------------------------------------------------------------------------------

|(6) | Closed-end management investment company that has elected to be regulated as a business development company under the Investment Act of 1940. During the nine months ended
September 30, 2006, the Company made a gift of 5.1 million shares of HydroFlo, Inc. common stock to certain not-for-profit institutions and abandoned its right, title and interest in and to 400,000 shares of HydroFlo, Inc.s common
stock.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Investment consists of a loan receivable with subsidiaries of UTEK Real Estate Holdings, Inc.
|---- | ---------------------------------------------------------------------------------------------



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|(7) | During the period ended December 31, 2006, the Company reclassified this investment from Affiliate investments to Non-affiliate investments based on the criteria in notes
(1) and (2).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | During the period ended December 31, 2006, the Company reclassified this investment from Non-affiliated investments to Affiliate investments based on the criteria in notes
(1) and (2).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | During the period ended December 31, 2006, the Company reclassified this investment from Affiliate investments to Control investments based on the criteria in notes
(2) and (3).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Advanced Medical Isotope Corporation and Manakoa Services Company are related parties through common management.
|---- | ----------------------------------------------------------------------------------------------------------------

|(11) | Xethanol Corporation and Metamorphix Global are parties related though common management.
|---- | -----------------------------------------------------------------------------------------

See accompanying notes



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UTEK Corporation

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2007 and 2006

(unaudited)

1. Nature of Business and Significant Accounting Policies

Interim Financial Information

The financial information for UTEK Corporation (the Company,
we, us or UTEK) as of March 31, 2007 and 2006 and for the three month periods then ended is unaudited, but includes all adjustments (consisting only of normal recurring accruals), which, in the opinion of
management are necessary in order to make the consolidated financial statements not misleading at such dates and for those periods. These consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information and, therefore, do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated
financial statements. These consolidated financial statements should be read in conjunction with the consolidated audited financial statements and related notes included in the Companys Form 10-K for the year ended December 31, 2006.
Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the entire year.

The Company

UTEK is a market-driven technology transfer business that assists companies in identifying and acquiring technologies.
Technology transfer refers to the process by which new technologies, developed in universities, government research facilities, or similar research settings, are licensed to companies for potential commercial development and use. UTEKs goal is
to provide its clients an opportunity to acquire and commercialize innovative technologies primarily developed by universities, medical centers and federal research laboratories.

UTEK seeks to achieve its investment objective by creating newly formed companies to acquire new technologies invented primarily by employees of universities, medical centers and federal research laboratories. The
Company intends to sell these newly formed companies principally to publicly traded companies and, to a lesser extent, to privately owned companies in tax-free stock for stock exchanges or for cash consideration. This unique technology-transfer
process is called U2B®. The shares we receive in
consideration for these sales will, in the course of our business, be sold for cash or other assets. We seek to enter into such technology transfer transactions with publicly traded companies whenever possible, as this provides us with the potential
for added liquidity.

The Company is 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). The Companys investment objective is to increase its net assets by effectuating technology transfer transactions with companies pursuant to which it
receives the securities or cash from such companies as compensation for the sale of the new technology rights.

Strategic Alliance
Agreements

Our strategic alliances are designed to help companies enhance their new product pipeline through the acquisition of proprietary
technologies primarily from universities, medical centers and federal research laboratories. We may receive unregistered shares of common or preferred stock or cash from companies as payment for the services we render under our strategic alliances.
All of our technology transfers are completed pursuant to our strategic alliance agreements with our client companies.

Technology
Transfers

To effectuate a technology transfer transaction, we will typically create a newly formed company to acquire a new technology from a
university, medical center or federal research laboratory and then sell this newly formed company to our client company for securities or cash. We call this unique technology transfer process U2B®. It is our plan that the shares we receive in these exchanges will, in the course of
our business, be sold for cash or other assets. A benefit of effectuating technology transfer transactions through our U2B® investment process is that such transactions do not result in a current taxable event for us for income tax purposes. We have not acquired, and do not
currently intend to acquire a new technology from a university, medical center and federal research laboratory in connection with our U2B® process without the prior agreement of our client company to subsequently acquire such new technology from us.



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Principles of Consolidation

UTEK Corporation commenced operations in 1997 in the business of technology transfer originally incorporated under the laws of the State of Florida, and subsequently under the laws of the State of Delaware in July 1999. The consolidated
financial statements include the accounts of UTEK Corporation and its wholly owned subsidiaries; UTEK-Europe, Ltd. (Europe) and UTEKipLtd. (Israel). Its divisions include UTEK Intellectual Capital Consulting, which using a team of on-call
scientists and industry experts provide technical and business knowledge to help our clients identify, assess, protect and leverage their IP assets; UTEK Information Services, which has a group of internet websites including Pharma-Transfer, which
provides a source of research and business development opportunities for the international pharmaceutical market encompassing all areas of pipeline development, from early-stage discovery, through pre-clinical and clinical trials, to registered
products that are all available for co-development or licensing; TechEx , an online searchable database for life science discoveries; UVentures, an online searchable database for physical science discoveries; and Knowledge Express, a searchable
database which provides our clients with comprehensive coverage of licensing agreements, corporate profiles, clinical trials, deals, drug pipelines, drug sales, licensable technologies, patents and royalty rates.

All intercompany transactions and balances are eliminated in consolidation.

These operating subsidiaries provide comprehensive technology transfer related services to the Company and its portfolio companies. Portfolio investments are held for the purpose of deriving investment income and future capital gains. The
financial results of the Companys portfolio investments are not consolidated in the Companys financial statements.

Reclassifications

Certain reclassifications have been made to the 2006 balances to conform to the 2007 financial statement presentation.

Use of Estimates

The preparation of the Companys consolidated
financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying
notes. The most significant estimate relates to the fair value of the investments. Actual results could differ from those estimates.

Recently Issued
Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48 (FIN 48), Accounting
for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48
provides guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
periods, disclosures, and transition. FIN 48 was effective for fiscal years beginning after December 15, 2006. On January 1, 2007, the Company adopted the provisions of FIN 48. The adoption did not have a material impact on the
Companys financial position or results of operations.

In February 2007, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115. SFAS No. 159 permits an entity to choose to measure
many financial instruments and certain other items at fair value. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. The Company is currently evaluating if it will elect
the fair value option for any of its eligible financial instruments and other items.

Earnings per Share (EPS)

Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is
computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares consist of outstanding
stock options.

Components of basic and diluted earnings per share are as follows:



|                                                    |  |                    |  |          
|--------------------------------------------------- |  | ------------------ |  | ---------
|                                                    |  | Three Months Ended
|                                                    |  | 2007               |  | 2006     
|Weighted average outstanding shares of common stock |  | 8,938,565          |  | 8,427,633
|Dilutive effect of stock options                    |  |                   |  | 78,838   
|Common stock and common stock equivalents           |  | 8,938,565          |  | 8,506,471
|Shares excluded from calculation of diluted EPS (1) |  | 574,467            |  | 310,000  

---

|(1) | These shares attributable to outstanding stock options were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive. The shares excluded
from the calculation for the three months ended March 31, 2007 would have been anti-dilutive because there was a net decrease in net assets from operations during the period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Goodwill Impairment

As a result of the Companys annual impairment analysis, the Company determined there was an impairment of the goodwill related to the Pharma Transfer acquisition in the first quarter of 2007. The Company recorded a partial impairment
of the goodwill for the United States segment in 2006. This resulted in a write-down of approximately $33,000, $21,000 after tax, which is an operating expense in the consolidated statements of operations for the three months ended March 31,
2007.

During the first quarter of 2006, the Company decided to make significant changes in strategy for UTEKip, Ltd., primarily switching the focus
of operations in Israel from software to technology transfer, the Companys core business. These changes were other-than-temporary; therefore management determined there was an impairment of the original purchase goodwill. The Company recorded
a total impairment of the goodwill for the Israel segment in the first quarter of 2006. This resulted in a write-down of approximately $235,000, $147,000 after tax, which is an operating expense in the consolidated statements of operations for the
three months ended March 31, 2006.

2. Stock Compensation

The Company had two stock-based equity compensation plans at March 31, 2007. See Note 9 of our consolidated financial statements included in the Companys Form 10-K for the year ended December 31, 2006.

Options under both plans are granted at the 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. Options generally become fully vested three to four years from the date of grant and expire five years from the date of grant. During the three months ended March 31,
2007 and 2006, respectively, we granted 134,000 and 32,000 options to purchase shares of common stock with a weighted average grant date fair value of $13.45 and $13.47 per option. At March 31, 2007, the Company had 559,778 shares available for
future stock option grants under existing plans.

Effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 123(R), Share-Based Payment. Prior to the adoption of SFAS 123(R), we accounted for stock option grants using the intrinsic value method prescribed in APB Opinion No. 25, Accounting for
Stock Issued to Employees, and accordingly, recognized no compensation expense for stock option grants.

SFAS 123(R) applies to new awards granted
subsequent to the date of adoption, January 1, 2006. Compensation cost recognized during the three months ended March 31, 2007 and 2006 includes compensation cost for all share-based payments granted prior to, but not yet vested as of
January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and compensation cost for all share based payments granted subsequent to January 1, 2006, based on the grant date fair
value estimated in accordance with the provisions of SFAS 123(R). Prior periods were not restated to reflect the impact of adopting the new standard, and there is no cumulative effect.



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For the three months ended March 31, 2007 and 2006, the Company recorded approximately $98,000 and $78,000,
respectively in compensation expense related to share-based payments pursuant to SFAS 123(R) that is included in salaries and wages in the consolidated statement of operations.

We use the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant. The assumptions employed in the calculation of the fair value of share-based compensation expense
for the three months ended March 31, 2007 and 2006 were calculated as follows:



| |  |  | Expected dividend yield  based on the Companys historical dividend yield.
| | - |  | ---------------------------------------------------------------------------



| |  |  | Expected volatility  based on the Companys historical market price at consistent points in a period equal to the expected life of the options.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Risk-free interest rate  based on the U.S. Treasury yield curve in effect at the time of grant.
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | Expected life of options  calculated using the simplified method as prescribed in Staff Accounting Bulletin No. 107, where the expected life is equal to
the sum of the vesting period and the contractual term divided by two.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table summarizes the assumptions used to estimate
the fair value of stock options granted during the three months ended March 31, 2007 and 2006.



|                         |  |      |            |   |      |   |            |  
|------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | -
|                         |  | 2007 |            |   | 2006 |  
|Expected dividend yield  |  |      | 0.248      | % |      |   | 0          | %
|Expected volatility      |  |      | 37.46      | % |      |   | 53.99      | %
|Risk-free interest rate  |  |      | 4.46       | % |      |   | 4.35       | %
|Expected life of options |  |      | 3.75 years |   |      |   | 3.67 years |  
|Grant date fair value    |  | $    | 4.54       |   |      | $ | 5.96       |  

Net cash proceeds from the exercise of stock options were approximately $248,500 and $240,000 for the three months
ended March 31, 2007 and 2006, respectively. At March 31, 2007, there was approximately $1,450,000 of unrecognized compensation cost related to share-based payments which is expected to be recognized over a weighted average period of 3.3
years.

The following table represents stock option activity as of and for the three months ended March 31, 2007:



|                                         |  |                 |   |  |                              |       |                                          |            |                         |   |        
|---------------------------------------- |  | --------------- | - |  | ---------------------------- | ----- | ---------------------------------------- | ---------- | ----------------------- | - | -------
|                                         |  | Numberof Shares |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractual Life |            | AggregateIntrinsicValue
|Options Outstanding beginning of period |  | 582,050         |   |  | $                            | 13.18 |                                          | 2.89 years |                         | $ | 778,000
|                                         |  |                 |   | 
|Granted                                  |  | 134,000         |   |  |                              | 13.45 |                                          |            |                         |   |        
|Exercised                                |  | (41,250         | ) |  |                              | 7.10  |                                          |            |                         | $ | 252,000
|Forfeited/expired/cancelled              |  | (100,333        | ) |  |                              | 13.03 |                                          |            |                         |   |        
|                                         |  |                 |   |  |                              |       |                                          |            |                         |   |        
|                                         |  |                 |   | 
|Options Outstanding  end of period      |  | 574,467         |   |  | $                            | 13.71 |                                          | 3.34 years |                         | $ | 723,000
|                                         |  |                 |   |  |                              |       |                                          |            |                         |   |        
|Outstanding Exercisable  end of period  |  | 241,718         |   |  | $                            | 11.26 |                                          | 1.89 years |                         | $ | 715,000
|                                         |  |                 |   |  |                              |       |                                          |            |                         |   |        

The total grant date fair value of options vested during the three months ended March 31, 2007 and 2006 was
$24,000 and $31,000, respectively.

3. 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 has considered valuation appraisals provided by an independent valuation service provider. With respect to equity securities in privatelyowned companies, 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 resale are generally valued at a discount from the market value of the
securities as quoted on the national securities exchange.



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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.

With respect to loans or debt securities we hold in our portfolio for which there is no liquid public market, the fair value of such loans or debt securities normally
corresponds to cost, unless the borrowers condition or other factors lead to a determination of fair value at a different amount.

Without a readily
available market value, the value of our portfolio of securities may differ significantly from the values that would be placed on the portfolio if there existed a ready market for such securities, and the differences could be material. Substantially
all of the Companys investments owned at March 31, 2007 and December 31, 2006 (73.5% and 74.3% of net assets, respectively), are stated at fair value as determined by the Board of Directors, in the absence of readily available fair
values. The Company uses the first-in, first-out (FIFO) method of accounting for sales of its investments.

Shares of stock provided by the portfolio
companies in exchange for both strategic alliance services and technology transfers transactions are recorded at fair value on the day that the transactions are executed. The certificates are received subsequent to the transaction date.

Strategic Alliances:

During the three months ended March 31,
2007, we entered into twenty-two strategic alliance agreements. The income recognized from all strategic alliance agreements for the three months ended March 31, 2007 was approximately $400,000. In January 2007, the Company changed it pricing
strategy on its strategic alliance agreements. Of the twenty-two most recent alliances only one agreement called for payment in stock and the remaining agreements called for monthly fees payable in cash. At March 31, 2007, the Company had
forty-two active strategic alliance clients.

During the three months ended March 31, 2006, we entered into four strategic alliance agreements. The
income recognized from all strategic alliance agreements for the three months ended March 31, 2006 was approximately $455,000. At March 31, 2006, the Company had twenty-nine active strategic alliance clients.

Technology Transfers:

All of our technology transfers are generally
completed according to our strategic alliance service agreements with our clients.

During the three months ended March 31, 2007, we completed the
following eight technology transfers:



|            |  |                                                    |  |                                            |  |                                            |  |                   |          
|----------- |  | -------------------------------------------------- |  | ------------------------------------------ |  | ------------------------------------------ |  | ----------------- | ---------
|Date        |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                       |  | Consideration Unregistered Shares or Cash |  | Price perShare(1)
|January 4   |  | Manakoa Services Corporation                       |  | Infinite Identification Technologies, Inc. |  | 95,000 preferred (2)                       |  | $                 | 24.00    
|January 11  |  | Cyberlux Corporation                               |  | Hybrid Lighting Technologies, Inc.         |  | 50,000 preferred (3) 26,500,000
common     |  |                   | 11.530.02
|January 30  |  | CytoDyn, Inc.                                      |  | Advanced Genetic Technologies, Inc.        |  | 100,000 preferred (4)                      |  |                   | 8.45     
|January 31  |  | Material Technologies, Inc.                        |  | Stress Analysis Technologies, Inc.         |  | 47,500 preferred (5)                       |  |                   | 14.62    
|February 12 |  | Liberty Diversified Holdings, Inc.                 |  | Sero Tonin Solutions, Inc.                 |  | 63,981 preferred (6)                       |  |                   | 6.00     
|March 12    |  | Metamorphix Global, Inc.                           |  | Flex Crete Technologies, Inc.              |  | $200,000 cash                              |  |                   |         
|March 12    |  | Klegg Electronics, Inc.                            |  | Tempo Control Technologies, Inc.           |  | 10,901,250 common                          |  |                   | .04      
|March 28    |  | Avalon Oil & Gas, Inc.                             |  | Leak Location Technologies, Inc.           |  | 34,875,000 common                          |  |                   | .02      

---

|(1) | Represents the valuation price per share at the date of acquisition.
|--- | --------------------------------------------------------------------

|(2) | Preferred A shares convertible into common shares based on a value of $3.8 million.
|--- | -----------------------------------------------------------------------------------

|(3) | Preferred C shares convertible into common shares based on a value of $768,500.
|--- | -------------------------------------------------------------------------------

|(4) | Preferred A shares convertible into common shares based on a value of $1.3 million.
|--- | -----------------------------------------------------------------------------------

|(5) | Preferred E shares convertible into common shares based on a value of $926,250.
|--- | -------------------------------------------------------------------------------

|(6) | Preferred D shares convertible into common shares based on a value of $638,000.
|--- | -------------------------------------------------------------------------------



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During the three months ended March 31, 2006, we completed the following six technology transfers:



|           |  |                                                    |  |                                        |  |                                    |     |  |                   |       
|---------- |  | -------------------------------------------------- |  | -------------------------------------- |  | ---------------------------------- | --- |  | ----------------- | ------
|Date       |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                   |  | Consideration  UnregisteredShares |     |  | Price perShare(1)
|January 20 |  | Fuel FX International, Inc.                        |  | Emissions Detection Technologies, Inc. |  | 100,000                            | (2) |  | $                 | 21.000
|January 27 |  | Broadcast International, Inc.                      |  | Video Processing Technologies, Inc.    |  | 944,360                            |     |  |                   | 1.210 
|January 30 |  | Websky, Inc.                                       |  | Strategic Wireless Solutions, Inc.     |  | 33,250,000                         |     |  |                   | 0.027 
|March 6    |  | Trio Industries Group                              |  | Ultra Fine Coating Systems, Inc.       |  | 1,805,000                          |     |  |                   | 1.350 
|March 8    |  | Advanced Refractive Technologies, Inc.             |  | Ocular Therapeutics, Inc.              |  | 97,000                             | (3) |  |                   | 21.300
|March 15   |  | American Soil Technologies, Inc.                   |  | Advanced Fertilizer Technologies, Inc. |  | 4,275,000                          | (4) |  |                   | 0.367 

---

|(1) | Represents the valuation price per share at the date of acquisition.
|--- | --------------------------------------------------------------------

|(2) | Preferred B shares convertible into common shares based on a value of $2.1 million.
|--- | -----------------------------------------------------------------------------------

|(3) | Preferred C shares convertible into common shares based on a value of $2.8 million.
|--- | -----------------------------------------------------------------------------------

|(4) | Preferred B shares convertible into common shares based on a value of $2.14 million.
|--- | ------------------------------------------------------------------------------------



|* | Unless otherwise noted, the Company received unregistered shares of common stock of the company acquiring the Companys newly formed company.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------

4. Commitments and Contingencies

From time to time, some of the
Companys portfolio companies may receive correspondence or other notices of alleged breach of a license agreement. Some of these correspondences and notices provide for a period of time in which to cure the alleged breach. The failure of the
Companys portfolio companies to cure the alleged breach may have a material adverse impact on the Companys results of operations and financial position.

Effective September 1, 2004, the Company entered into a three year employment agreement with its Chief Executive Officer, Clifford M. Gross, providing for an annual base salary of $300,000 for his services. In
addition to his salary, Dr. Gross will receive a reasonable allowance for an automobile and be entitled to certain severance benefits.

The Company
entered into an employment agreement with our Chief Operating Officer and Chief Compliance Officer, Douglas Schaedler, effective March 20, 2007. The term of the agreement is for one year and provides for an annual salary of $225,000.
Additionally, Mr. Schaedler will receive a bi-annual discretionary bonus and 100,000 stock options.

The Company leases its office facilities and
certain equipment for various terms under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2010 and provide for various renewal options. In the normal course of business, it is expected that these
leases will be renewed or replaced by leases on other properties. The leases provide for increases in future minimum annual rental

5. Segment Reporting

The Companys principal area of activity is technology transfer services. The Company has three reportable operating segments: United Kingdom,
Israel and the United States. The United Kingdom segment includes our wholly owned subsidiary UTEK-Europe, Ltd., the Israel segment includes UTEKip, Ltd., and the United States segment includes UTEK Corporation.

A summary of income from operations and other financial information by reportable operating segment is shown below:



|                               |  |               |         |        |   |               |  |       |            |  |   |           
|------------------------------ |  | ------------- | ------- | ------ | - | ------------- |  | ----- | ---------- |  | - | ----------
|                               |  | UnitedKingdom |         | Israel |   | United States |  | Total
|Total assets March 31, 2007    |  | $             | 665,986 |        | $ | 52,476        |  | $     | 51,927,893 |  | $ | 52,646,355
|Total assets December 31, 2006 |  |               | 719,238 |        |   | 71,771        |  |       | 52,249,801 |  |   | 53,040,810



|                                                              |  |                                           |         |   |        |   |         |              |  |   |           |     |  |   |          
|------------------------------------------------------------- |  | ----------------------------------------- | ------- | - | ------ | - | ------- | ------------ |  | - | --------- | --- |  | - | ---------
|                                                              |  | For the three months ended March 31, 2007
|                                                              |  | UnitedKingdom                             |         |   | Israel |   |         | UnitedStates |  |   | Total    
|Income from operations                                        |  | $                                         | 89,648  |   |        | $ | 40,169  |              |  | $ | 7,817,954 |     |  | $ | 7,947,771
|Income (loss) before interest, other expense and income taxes |  |                                           | (52,671 | ) |        |   | (40,461 | )            |  |   | 3,949,518 | (1) |  |   | 3,856,386
|Depreciation and amortization                                 |  |                                           | 406     |   |        |   | 1,585   |              |  |   | 53,151    |     |  |   | 55,142   



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|                                                              |  |                                           |         |        |   |          |               |  |       |            |  |   |           
|------------------------------------------------------------- |  | ----------------------------------------- | ------- | ------ | - | -------- | ------------- |  | ----- | ---------- |  | - | ----------
|                                                              |  | For the three months ended March 31, 2006
|                                                              |  | United Kingdom                            |         | Israel |   |          | United States |  | Total
|Income from operations                                        |  | $                                         | 284,278 |        | $ | 36,895   |               |  | $     | 11,485,833 |  | $ | 11,807,006
|Income (loss) before interest, other expense and income taxes |  |                                           | 128,204 |        |   | (342,630 | )(2)          |  |       | 6,001,781  |  |   | 5,787,355 
|Depreciation and amortization                                 |  |                                           | 6,452   |        |   | 4,917    |               |  |       | 34,835     |  |   | 46,204    

---

|(1) | During the three months ended March 31, 2007, the Company recorded goodwill impairment for Pharma Transfer of $33,030, which is included in the current period loss.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | During the three months ended March 31, 2006, the Company recorded goodwill impairment for UTEKip,Ltd. of $234,940 which is included in the current period loss.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

6. Related Party Transactions

Sam Reiber, our General Counsel and a member of our Board of Directors, has received approximately $18,500 and $12,000 in compensation in the three months ended March 31, 2007 and 2006, respectively, for legal services related to the
technology transfers performed for us. The Company entered into an arrangement with Mr. Reiber pursuant to which the Company agreed to pay Mr. Reiber approximately $2,000 per technology transfer transaction consummated by the Company for
the provision by him of certain legal services rendered to the Company in connection therewith. Mr. Reiber receives a modest salary for his contribution to the Companys operations. Given this fact and as a result of the significant
increase in the number of technology transfer transactions consummated by the Company in 2006, the Compensation Committee determined that in lieu of increasing his salary to compensate him for his additional legal services in connection with such
technology transfer transactions, he would receive a per technology transaction fee.

During the three months ended March 31, 2007, we loaned funds
for operations and real estate improvements of approximately $543,000 to certain subsidiaries of UTEK Real Estate Holdings, Inc., one of UTEKs portfolio companies. In addition, we paid rent of approximately $56,000 to Ybor City Group, Inc. a
subsidiary of UTEK Real Estate Holdings, Inc., one of UTEKs portfolio companies during the three months ended March 31, 2007.

7. Line of
Credit

In February 2007, we obtained a $4,000,000 uncommitted bank line of credit with the Bank of Tampa. The advances on the line of credit accrue
interest (payable monthly) at prime (presently 8.25%). The principal and any unpaid interest are due upon demand. This line is collateralized with commercial real estate owned by UTEK Real Estate Holdings, Inc. As of March 31, 2007, we had no
outstanding debt.



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Special Note Regarding Forward-Looking Statements

The following discussion should be read in conjunction with our
consolidated financial statements and the notes thereto included elsewhere in this Form 10-Q. This Form 10-Q contains forward-looking statements regarding the plans and objectives of management for future operations. These forward-looking statements
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 the 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.

Overview of Recent Developments

We are a market-driven technology transfer business that assists companies in identifying and acquiring technologies. Technology transfer refers to the process by which
new technologies, developed in universities, government research facilities, or similar research settings, are licensed to companies for potential commercial development and use. Our goal is to provide our client companies an opportunity to acquire
and commercialize innovative technologies primarily developed by universities, medical centers and federal research laboratories.

Executive Summary

Our financial condition is dependent on a number of factors including our ability to effectuate technology transfers and the performance of the
investments that we receive in connection with these transfers. Substantially all of our investments are in development stage and start-up private companies and thinly traded public companies. These businesses are thinly capitalized, unproven, small
companies that lack management depth, are dependent on new, commercially unproven technologies and have no or a limited history of operations.

Our total
assets were $52.6 million and our net assets were $51.0 million at March 31, 2007, compared to $53.0 million and $51.0 million at December 31, 2006, respectively. Net asset value per share was $5.69 at March 31, 2007 and $5.71 at
December 31, 2006. At the end of the first quarter of 2007, we had no long-term debt outstanding and $9.9 million in cash and cash equivalents.

Income from operations for the first quarter of 2007 totaled approximately $7.9 million, as compared to $11.8 million for the same period of 2006. Net income from operations for the first quarter of 2007 totaled approximately $2.2 million
as compared to $3.6 million in the first quarter of 2006. Net realized losses on investments, net of deferred tax effect, totaled approximately ($1.1 million) as compared to net realized gains of $383,000 in 2006. In this regard, we received gross
proceeds of $654,000 in the first quarter of 2007 and $1.4 million in the first quarter of 2006 in connection with the sale of the securities we received in connection with our strategic alliance agreements and technology transfer transactions. Net
change in unrealized appreciation (depreciation) of investments, net of deferred tax benefit, was ($1.5 million) in the first quarter of 2007 as compared to $1.6 million in the first quarter of 2006.

On December 1, 2006, our Board of Directors approved a special dividend of $0.02 per share that was paid on January 31, 2007 to shareholders of record on
January 12, 2007. Our Board of Directors will have sole discretion in determining whether to declare and pay cash dividends in the future. The declaration of cash 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 cash 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.

Recently, we have taken steps to improve the efficiency of our
technology transfer business model. Some of the improvements we have made include:



| |  |  | Enhanced client company acceptance procedures including the hiring of a manager of due diligence to conduct background checks on principal officers of prospective
client companies, and Executive Committee (made up of the executive officers and the director of operations) approval prior to accepting a new client company;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Expanded our scientific review team for technology due diligence;
| | - |  | -----------------------------------------------------------------



| |  |  | Improved our technology search capabilities through our expanded proprietary technology database and internally developed search engine;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Entered into Master Strategic Alliances with two investment banks - Acumen BioFin, a division of Rodman & Renshaw, LLC, and vFinance Investments, Inc.,
which should help us improve the quantity and diversity of our new client companies as well as the availability of follow-on financing for our client companies to accelerate the commercialization of technologies they may acquire from us; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Engaged C.E. Unterberg, Towbin and vFinance Investments, Inc. to facilitate the sales of portions of our restricted equity positions in a more rapid and efficient
fashion following the completion of technology transfers. We anticipate that over time this may mitigate a portion of the equity risk in our portfolio and improve cash flow.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Increase in Technology Transfers and Strategic Alliances

In
the first quarter of 2007, we increased the number of our active strategic alliance agreements and consequently the number of completed technology transfers:



| |  |  | During the first quarter of 2007, we signed 22 new strategic alliance agreements, as compared to 4 new strategic alliances in the first quarter of 2006.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the first quarter of 2007, we completed 8 technology transfers valued at approximately $6.7 million as compared to 6 technology transfers valued at
approximately $10.2 million in 2006.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Portfolio Activity

The following is a list of significant changes in our portfolio during the three months ended March 31, 2007:



| |  |  | The sale of some or all of our shares in Xethanol Corporation, Shumate Industries, Inc., Manaokoa Services Corporation and various other portfolio companies for
approximately $654,000, which resulted in realized losses of $1.1 million (net of income tax);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The completion of 7 technology transfers valued at approximately $6.5 million (one technology transfer was completed for $200,000 in cash);
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A net unrealized loss of $1.5 million (net of income tax) in the fair value of our investments.
| | - |  | -----------------------------------------------------------------------------------------------

Our most significant portfolio investments at March 31, 2007 were in Advanced Refractive Technologies, Inc., Avalon Oil & Gas, Inc., Manakoa Services
Corporation, Fuel FX International, Inc., Material Technologies, Inc., World Energy Solutions, Inc., Cytodyn, Inc., Advanced Medical Isotope Corporation, Cyberlux Corporation, American Soil Technologies, Inc., Klegg Electronics, Inc. and UTEK Real
Estate Holdings, Inc. These 12 investments total $27.3 million in fair value and represented 73% of our investments and 54% of net assets at March 31, 2007.

The net unrealized depreciation for the three months ended March 31, 2007 was mostly due to the write down of four investments in our portfolio: Industrial Biotechnology Corp., UBA Technology, Inc., Fuel FX International, Inc. and
Klegg Electronics, Inc. Large fluctuations in the fair value of our investments are not unexpected given that substantially all of our investments are in development stage and start up private companies and thinly traded public companies and may
occur in the future. The current portfolio is comprised of approximately 60 holdings. Many of these positions are with small capitalization companies which over time may have high failure rates due to a variety of factors. For clients that fail,
UTEK may lose the entire amount of its capital spent acquiring and transferring the technology to them.

The value of our investments can fluctuate due to
factors that are specific to each investment (e.g., inability to obtain additional capital, inability to execute business model, termination of technology licenses, etc.) or to general marketplace factors.

Results of Operations

Income from Operations (Revenue)



|                                   |  |                             |       |                  |   |        |  |     |   
|---------------------------------- |  | --------------------------- | ----- | ---------------- | - | ------ |  | --- | --
|                                   |  | Three monthsended March 31, |       | PercentageChange |  
|(in thousands, except percentages) |  | 2007                        |       | 2006             |   |        | 
|Sale of Technology Rights          |  | $                           | 6,701 |                  | $ | 10,215 |  | (34 | %)
|Consulting and Other Services      |  |                             | 1,047 |                  |   | 1,353  |  | (23 | %)
|Other Income, net                  |  |                             | 200   |                  |   | 239    |  | (16 | %)
|                                   |  |                             |       |                  |   |        |  |     |   
|Income from Operations             |  | $                           | 7,948 |                  | $ | 11,807 |  | (33 | %)
|                                   |  |                             |       |                  |   |        |  |     |   



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The Company completed eight technology transfers during the three months ended March 31, 2007 as compared to six
during the three months ended March 31, 2006. The lower average value of the technology transfer is a function of a decrease in the cost to acquire the technology rights partially offset by an increase in the average technology transfer
multiple. The Company changed the pricing to increase the diversification of the client base and to reduce the costs and amount of paperwork related to the small holdings of shares related to clients who did not complete technology transfers. The
technology transfers had an average value of $1.3 million and $2.6 million for the three months ended March 31, 2007 and 2006, respectively. The technology transfer multiple is the revenue markup on the acquisition of technology rights costs.
The average technology transfer multiple for the first quarter of 2007 was 4.9 as a result of six of the eight technology transfers having multiples significantly in excess of our targeted multiple of 4.0. The average technology transfer multiple
for the first quarter of 2006 was 4.2 as a result of three of the six technology transfers having multiples significantly lower than our targeted multiple. With the exception of $200,000 in the first quarter of 2007, all income from the sale of
technology rights for the three months ended March 31, 2007 and March 31, 2006 was received in the form of equity securities.

The decrease in
consulting fees and other services resulted partially from a change in the Companys pricing strategy on its strategic alliance agreements and a decrease in the consulting income from UTEK-Europe, Ltd., one of the Companys subsidiaries.
The change in the pricing structure of our strategic alliances resulted in a reduction of the related revenue from $440,000 to $400,000 during the quarter ended March 31, 2007 versus 2006. Other consulting income for the three months ended
March 31, 2007 included income of $337,000 from our Intellectual Capital Consulting division and subsidiaries UTEK-Europe, Ltd., and UTEKip, Ltd., as compared to $563,000 for the three months ended March 31, 2006. UTEK Information
Services, a division of the Company, comprised the balance of consulting fee and other services income for 2007.

The increase in our strategic alliances
and technology transfers is primarily a result of an increase in the overall demand for our services. We are growing our customer base as a result of increased sales and marketing efforts and better recognition in the business community regarding
the value and availability of our services. Future technology transfer transactions will be scaled to the amount of cash available to fund such transfers.

In the absence of readily available market values, our Board of Directors determines the fair value of the securities we receive in connection with our technology transfers and strategic alliance agreements. In making its determination, the
Board of Directors considers valuation appraisals provided by an independent valuation service provider.

Our income from operations can vary substantially
on a quarterly basis due to a variety of factors. Therefore, quarterly income from operations should not be annualized to predict expected annual results and may not be indicative of future performance.

Expenses

Acquisition of Technology Rights



|                                          |  |                             |       |   |                   |   |       |   |  |     |      
|----------------------------------------- |  | --------------------------- | ----- | - | ----------------- | - | ----- | - |  | --- | -----
|                                          |  | Three monthsended March 31, |       |   | Percentage Change |  
|(In thousands, except percentages)        |  | 2007                        |       |   | 2006              |   |       |   | 
|Acquisition of technology rights          |  | $                           | 1,303 |   |                   | $ | 2,624 |   |  | (50 | %)   
|As a percent of sale of technology rights |  |                             | 19    | % |                   |   | 26    | % |  | (7  | ) ppt

Acquisition of technology rights costs consist of the direct costs associated with our technology transfers, which
include cash to further accelerate commercialization efforts, license fees to acquire new technologies, consulting fees with the inventor of the technologies, and sponsored research fees with the university or research facility transferring the
technologies. The overall decrease in acquisition of technology rights from 2006 to 2007 was due to the lower costs of the technologies acquired in connection with the technology transfers completed in the three months ended March 31, 2007 as
compared to the same period in 2006. The average cost per technology transfer decreased approximately $274,000 or 63% during the three months ended March 31, 2007.

The following tables provide certain information relating to the acquisition of technology rights expenses we incurred in connection with our technology transfers during the three months ended March 31, 2007:



|            |  |                                                    |  |                                             |  |                         |          
|----------- |  | -------------------------------------------------- |  | ------------------------------------------- |  | ----------------------- | ---------
|Date        |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                        |  | DollarAmount ofExpenses
|January 4   |  | Manakoa Services Corporation                       |  | Infinite Identification Technologies, Inc.  |  | $                       | 400,000  
|January 11  |  | Cyberlux Corporation                               |  | Hybrid Lighting Technologies, Inc.          |  |                         | 192,455  
|January 30  |  | CytoDyn, Inc.                                      |  | Advanced Genetic Technologies, Inc.         |  |                         | 167,500  
|January 31  |  | Material Technologies, Inc.                        |  | Stress Analysis Technologies, Inc.          |  |                         | 130,000  
|February 12 |  | Liberty Diversified Holdings, Inc.                 |  | Sero Tonin Solutions, Inc.                  |  |                         | 70,052   
|March 12    |  | Metamorphix Global, Inc.                           |  | Flex Crete Technologies, Inc.               |  |                         | 52,884   
|March 12    |  | Klegg Electronics, Inc.                            |  | Tempo Control Technologies, Inc.            |  |                         | 135,388  
|March 28    |  | Avalon Oil & Gas, Inc.                             |  | Leak Location Technologies, Inc.            |  |                         | 155,000  
|            |  |                                                    |  |                                             |  |                         |          
|            |  |                                                    |  | Total for three months ended March 31, 2007 |  | $                       | 1,303,279
|            |  |                                                    |  |                                             |  |                         |          



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The following tables provide certain information relating to the acquisition of technology rights expenses we incurred in
connection with our technology transfers during the three months ended March 31, 2006:



|           |  |                                                    |  |                                             |  |                         |          
|---------- |  | -------------------------------------------------- |  | ------------------------------------------- |  | ----------------------- | ---------
|Date       |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                        |  | DollarAmount ofExpenses
|January 20 |  | Fuel FX International, Inc.                        |  | Emissions Detection Technologies, Inc.      |  | $                       | 300,000  
|January 27 |  | Broadcast International, Inc.                      |  | Video Processing Technologies, Inc.         |  |                         | 625,000  
|January 30 |  | Websky, Inc.                                       |  | Strategic Wireless Solutions, Inc.          |  |                         | 265,000  
|March 6    |  | Trio Industries Group                              |  | Ultra Fine Coating Systems, Inc.            |  |                         | 534,000  
|March 8    |  | Advanced Refractive Technoloiges, Inc.             |  | Ocular Therapeutics, Inc.                   |  |                         | 500,000  
|March 15   |  | American Soil Technologies, Inc.                   |  | Advanced Fertilizer Technologies, Inc.      |  |                         | 400,000  
|           |  |                                                    |  |                                             |  |                         |          
|           |  |                                                    |  | Total for three months ended March 31, 2006 |  | $                       | 2,624,000
|           |  |                                                    |  |                                             |  |                         |          

Salaries and Wages



|                                   |  |                             |     |   |                   |   |     |   |  |       |  
|---------------------------------- |  | --------------------------- | --- | - | ----------------- | - | --- | - |  | ----- | -
|                                   |  | Three monthsended March 31, |     |   | Percentage Change |  
|(In thousands, except percentages) |  | 2007                        |     |   | 2006              |   |     |   | 
|Salaries and wages                 |  | $                           | 969 |   |                   | $ | 694 |   |  | 40    | %
|As a percent of revenue            |  |                             | 12  | % |                   |   | 6   | % |  | 6 ppt |  

Salaries and wages include non-sales employee and officer salaries and related benefits including bonuses.
Salaries and wages increased $275,000 during the three months ended March 31, 2007 due primarily to the additional salary and discretionary bonus paid to the Companys Chief Financial Officer as a result of changing from a part-time to a
full-time position, an increase in stock option compensation, and an increase in the number of employees and the salaries for the UTEK Information Services division.

Professional Fees



|                                   |  |                             |     |   |                   |   |     |   |  |       |  
|---------------------------------- |  | --------------------------- | --- | - | ----------------- | - | --- | - |  | ----- | -
|                                   |  | Three monthsended March 31, |     |   | Percentage Change |  
|(In thousands, except percentages) |  | 2007                        |     |   | 2006              |   |     |   | 
|Professional fees                  |  | $                           | 322 |   |                   | $ | 281 |   |  | 14    | %
|                                   |  |                             |    
|As a percent of revenue            |  |                             | 4   | % |                   |   | 2   | % |  | 2 ppt |  

Professional fees include accounting fees, legal fees and valuation expenses for our investments. The increase in
professional fees for the three months ended March 31, 2007 relates to a modest increase in accounting fees related to the year-end audit and an increase in legal fees related to various projects during the first quarter of 2007.

Sales and Marketing



|                                   |  |                             |     |   |                   |   |     |   |  |       |   
|---------------------------------- |  | --------------------------- | --- | - | ----------------- | - | --- | - |  | ----- | --
|                                   |  | Three monthsended March 31, |     |   | Percentage Change |  
|(In thousands, except percentages) |  | 2007                        |     |   | 2006              |   |     |   | 
|Sales and marketing                |  | $                           | 632 |   |                   | $ | 809 |   |  | (22   | %)
|As a percent of revenue            |  |                             | 8   | % |                   |   | 7   | % |  | 1 ppt |   



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Sales and marketing expenses include advertising, marketing, salaries, wages and commission paid to sales personnel,
commissions paid to outside service providers, travel and other selling expenses. Commissions decreased $53,000 for the three months ended March 31, 2007 as a result of using less outside service providers for the purpose of selling strategic
alliance agreements. Due to the decrease in consulting services revenue received by the UTEK Intellectual Capital Consulting division, the related outside service provider costs decreased by $47,000. Salaries, wages and commission paid to sales
related employees decreased $26,000 for the three months ended March 31, 2007 due to lower commissions related to lower technology transfer Income.

It is our intention to continue to grow our sales force by increasing the number of sales personnel in locations around the United States, the United Kingdom and Israel.

General and Administrative



|                                   |  |                             |     |   |                  |   |       |   |  |     |      
|---------------------------------- |  | --------------------------- | --- | - | ---------------- | - | ----- | - |  | --- | -----
|                                   |  | Three monthsended March 31, |     |   | PercentageChange |  
|(In thousands, except percentages) |  | 2007                        |     |   | 2006             |   |       |   | 
|General and administrative         |  | $                           | 832 |   |                  | $ | 1,376 |   |  | (40 | %)   
|As a percent of revenue            |  |                             | 10  | % |                  |   | 12    | % |  | (2  | ) ppt

The decrease in general and administrative costs for the three months ended March 31, 2007 is primarily
attributable to a decrease in contributions expense of $663,000. During the three months ended March 31, 2006, the Company made a gift of 5.1 million shares of Hydroflo, Inc. common stock to certain not-for-profit institutions. The stock
was fair valued at $663,000 at the time of the gift.

Goodwill Impairment

During the three months ended March 31, 2006, we recorded a total impairment of the goodwill for UTEKip, Ltd. of $234,940 as a result of changing the focus of the Israel operations from software to
technology transfer. During the three months ended March 31, 2007, we recorded a partial impairment of the goodwill related to the Pharma Transfer acquisition of $33,030 as a result of our annual impairment analysis.

Net Realized Gains (Losses) on Investments



|                                   |  |                             |       |                  |      |   |     |  |      |   
|---------------------------------- |  | --------------------------- | ----- | ---------------- | ---- | - | --- |  | ---- | --
|                                   |  | Three monthsended March 31, |       | PercentageChange |     
|(In thousands, except percentages) |  | 2007                        |       |                  | 2006 |   |     | 
|Realized gains (losses)            |  | ($                          | 1,098 | )                |      | $ | 383 |  | (387 | %)

Net realized gains (losses) on investments, net of income tax effect, amounted to ($1,097,632) for the three
months ended March 31, 2007 and were related to sales as follows:



|                                       |  |                 |  |                      |            |  
|-------------------------------------- |  | --------------- |  | -------------------- | ---------- | -
|Company Name                           |  | Number ofShares |  | Realized Gain (Loss) |           
|Advanced Refractive Technologies, Inc. |  | 1,533,333       |  | $                    | (46,064    | )
|American Soil Technologies, Inc.       |  | 3,271           |  |                      | 5          |  
|Shumate Industries, Inc.               |  | 155,347         |  |                      | 116,897    |  
|Health Sciences Group, Inc.            |  | 2,242,000       |  |                      | (619,815   | )
|Swiss Medica, Inc.                     |  | 850,000         |  |                      | (93,577    | )
|Xethanol Corporation                   |  | 136,838         |  |                      | (378,935   | )
|Broadcast International, Inc.          |  | 10,000          |  |                      | (4,067     | )
|Manakoa Services Corporation           |  | 578,958         |  |                      | (72,076    | )
|                                       |  |                 |  |                      |            |  
|Total                                  |  |                 |  | $                    | (1,097,632 | )
|                                       |  |                 |  |                      |            |  

Net realized gains on investments, net of income tax effect, amounted to $382,586 for the three months ended
March 31, 2006 and were related to sales as follows:



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|                            |  |                 |  |                     |         |  
|--------------------------- |  | --------------- |  | ------------------- | ------- | -
|Company Name                |  | Number ofShares |  | Realized Gain(Loss) |        
|Circle Group Holdings, Inc. |  | 514,608         |  | $                   | 199,231 |  
|Genethera, Inc.             |  | 14,796          |  |                     | (21,583 | )
|Magic Media Networks, Inc.  |  | 30,000          |  |                     | (103    | )
|Sequiam Corporation         |  | 560,000         |  |                     | 946     |  
|Swiss Medica, Inc.          |  | 300,000         |  |                     | (3,661  | )
|Xethanol Corporation        |  | 150,762         |  |                     | 238,954 |  
|Hydroflo, Inc.              |  | 5,100,000       |  |                     | (31,198 | )
|Total                       |  |                 |  | $                   | 382,586 |  
|                            |  |                 |  |                     |         |  

On a quarterly basis, net realized gains and losses can vary substantially due to a variety of factors. Therefore,
current quarterly net results should not be annualized to predict expected annual results, and may not be indicative of future performance.

Changes
in Unrealized Appreciation or Depreciation on Investments

We determine the value of each investment in our portfolio on a quarterly basis, and
changes in value result in unrealized appreciation or depreciation being recognized. At March 31, 2007, approximately 73% of our net assets represented investments recorded at fair value. Value, as defined in Section 2(a)(41) of the
Investment Company Act of 1940, is (i) the market price for those securities for which a market quotation is readily available and (ii) for all other securities and assets, fair value is as determined in good faith by the Board of
Directors. Although many of the securities we hold in our portfolio are quoted on the OTC Bulletin Board or listed on the American Stock Exchange, our Board of Directors is required to determine the fair value of such securities if the validity of
the market quotations appears to be questionable, or if the number of quotations is such as to indicate that there is a thin market in the security. The fair value of these securities is frequently less than the market quotations for such
securities. Because there is typically no readily available market value for the investments in our portfolio, we value substantially all of our investments at fair value as determined in good faith by the Board of Directors. In making its
determination, our Board of Directors may consider valuation appraisals provided by independent valuation service providers. Because of the inherent uncertainty of determining the fair value of investments that do not have a readily available market
value, the fair value of our investments determined in good faith by the Board of Directors may differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could be material.



|                                       |  |                             |       |                   |      |   |       |  |      |   
|-------------------------------------- |  | --------------------------- | ----- | ----------------- | ---- | - | ----- |  | ---- | --
|                                       |  | Three monthsended March 31, |       | Percentage Change |     
|(In thousands, except percentages)     |  | 2007                        |       |                   | 2006 |   |       | 
|Unrealized appreciation (depreciation) |  | ($                          | 1,542 | )                 |      | $ | 1,565 |  | (199 | %)

Net change in unrealized depreciation on investments, net of income tax effect, amounted to ($1,542,328) for the
three months ended March 31, 2007 and was related to our investments as follows:



|                                     |  |                                          |           |  
|------------------------------------ |  | ---------------------------------------- | --------- | -
|Company Name                         |  | Net UnrealizedAppreciation(Depreciation) |          
|Health Sciences Group, Inc.          |  | $                                        | 591,717   |  
|Xethanol Corporation                 |  |                                          | 374,010   |  
|Material Technologies, Inc.          |  |                                          | 427,085   |  
|Klegg Electronics, Inc.              |  |                                          | (925,852  | )
|Industrial Biotechnology Corporation |  |                                          | (800,269  | )
|Broadcast International, Inc.        |  |                                          | 197,027   |  
|Fuel FX International                |  |                                          | (642,473  | )
|Websky, Inc.                         |  |                                          | (126,237  | )
|UBA Technology, Inc.                 |  |                                          | (446,070  | )
|Cyberlux Corporation                 |  |                                          | (232,329  | )
|Manakoa Services Corporation         |  |                                          | (145,885  | )
|Liberty Diversified Holdings, Inc.   |  |                                          | (143,202  | )
|Advanced Medical Isotope Corporation |  |                                          | 248,918   |  
|All other investments                |  |                                          | 81,232    |  
|                                     |  |                                          |           |  
|                                     |  | ($                                       | 1,542,328 | )
|                                     |  |                                          |           |  



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Net change in unrealized appreciation on investments, net of income tax effect, amounted to $1,564,966 for the three
months ended March 31, 2006 and was related to our investments as follows:



|                                     |  |                                          |            |  
|------------------------------------ |  | ---------------------------------------- | ---------- | -
|Company Name                         |  | Net UnrealizedAppreciation(Depreciation) |           
|Health Sciences Group, Inc.          |  | $                                        | (155,861   | )
|Xethanol Corporation                 |  |                                          | 1,736,940  |  
|Trio Industries, Inc.                |  |                                          | 1,524,065  |  
|Industrial Biotechnology Corporation |  |                                          | (1,406,316 | )
|Broadcast International, Inc.        |  |                                          | 149,994    |  
|Z-Trim Holdings, Inc.                |  |                                          | (254,437   | )
|HydroFlo, Inc.                       |  |                                          | 173,632    |  
|GS Energy Corporation                |  |                                          | (169,902   | )
|All other investments                |  |                                          | (33,149    | )
|                                     |  |                                          |            |  
|                                     |  | $                                        | 1,564,966  |  
|                                     |  |                                          |            |  

On a quarterly basis, changes in unrealized appreciation or depreciation can vary substantially due to a variety
of factors. Therefore, current quarterly net results should not be annualized to predict expected annual results, and may not be indicative of future performance.

Liquidity and Capital Resources

As of March 31, 2007, we had cash and cash equivalents of $9.9 million. We also had investments in
U.S. Treasuries of $2.0 million. We typically invest our excess cash in U.S. Treasuries and CDs, which normally have three month to one year maturities. These investments do not qualify as cash equivalents.

We have financed substantially all of our operations since inception through the issuance of equity securities and, to a lesser extent, sales of investments, cash
received in connection with the provision of strategic alliance and other consulting services and the use of funds from our investments in U.S. Treasuries and certificates of deposit. Our primary source of liquidity and capital for the three months
ended March 31, 2007 was $2.6 million in net proceeds from the sale of U.S. Treasuries and $654,000 in proceeds generated from the sale of shares of our portfolio companies.

To date, our income from operations consists primarily of the sale of technology rights and consulting income from strategic alliances in exchange for securities rather than cash. In the three months ended
March 31, 2007, 88% of our income from operations was paid in the form of equity securities. Of the $7.9 million in income from operations in the first quarter of 2007, $1.0 million was received in the form of cash. During the three months
ended March 31, 2007, we used approximately $1.3 million to fund our technology transfer transactions and approximately $2.8 million for operating expenses. During the remainder of 2007, we expect our cash outlay for technology transfers will
be scaled to available cash and that the cost of our operations should be similar to those incurred in 2006.

During the three months ended March 31,
2007, we loaned UTEK Real Estate Holdings, Inc., one of our portfolio companies, an additional $543,000 for real estate improvements and operations. We expect the renovations to be completed by the spring of 2007 and the additional cash outlay to be
less than $200,000.

On December 1, 2006, our Board of Directors approved a special dividend of $0.02 per share that was paid on January 31, 2007
to shareholders of record on January 12, 2007. Our Board of Directors will have sole discretion in determining whether to declare and pay cash dividends in the future. The declaration of cash 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 cash 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.

In February 2007, we obtained a
$4,000,000 uncommitted bank line of credit with the Bank of Tampa. The advances on the line of credit accrue interest (payable monthly) at prime (presently 8.25%). The principal and any unpaid interest are due upon demand. This line is
collateralized with commercial real estate owned by UTEK Real Estate Holdings, Inc. As of March 31, 2007, we had no outstanding debt.



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We currently intend to fund our capital expenditures, as well as liquidity needs, with existing cash and cash equivalent
balances, our investments in U.S. treasuries and borrowings, as well as with cash generated by operations, (including the sales of our investments). We believe that these sources will be sufficient to meet working capital needs, capital
requirements, and current commitments for at least the next twelve months. However, our capital requirements will depend on many factors, the most important factor is our sales of technology rights. We will scale the number of sales of technology
rights to available cash resources. We may seek to raise additional funds through public or private debt or equity financing. Additional funds may not be available on favorable terms to us, if at all.

In February 2007, UTEK entered into an equity monetization agreement with C.E. Unterberg, Towbin (CEUT). Under this agreement and at UTEKs request,
CEUT will monetize a portion of select, restricted equity stakes that UTEK acquires through its technology transfer services. In consideration for providing these services, CEUT will receive a commission according to a sliding scale, payment of
which will be deducted from the proceeds of each sale following settlement.

In February 2007, UTEK entered into an equity monetization agreement with
vFinance Investments, Inc. (VFIN). Under this agreement and at UTEKs request, VFIN will monetize a portion of select, restricted equity stakes that UTEK acquires through its technology transfer services. In consideration for
providing these services, VFIN will receive a commission according to a sliding scale, payment of which will be deducted from the proceeds of each sale following settlement.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Critical accounting policies are those that are both important to the presentation
of our financial condition and results of operations and require managements most difficult, complex, or subjective judgments. Our most critical accounting policy relates to the valuation of our investments and our recognition of revenue in
connection with the receipt of unregistered securities pursuant to our strategic alliance agreements and technology transfers.

Valuation Methodology

We primarily receive illiquid securities in connection with our strategic alliance agreements and technology transfers. These securities are generally
subject to restrictions on resale and generally have no established trading market. We value substantially all of our investments at fair value as determined in good faith by the Board of Directors in accordance with our valuation policy on a
quarterly basis. We continue to utilize an independent valuation service provider to assist the Board of Directors in determining the fair value of our portfolio.

We determine fair value to be the amount for which an investment could be exchanged in an orderly disposition over a reasonable period of time between willing parties other than in a forced or liquidation sale. Our valuation process is
intended to provide a consistent basis for determining the fair value of our portfolio investments. We will record unrealized depreciation on investments when we believe that an investment has become impaired, including where realization of an
equity security is doubtful. We will record unrealized appreciation if we believe that the underlying portfolio company has appreciated in value and, therefore, our equity security has also appreciated in value. Upon the sale of our investments, the
values that are ultimately realized may be different from the presently determined fair values of such securities. This difference could be material.

Our
equity interests in portfolio companies for which there is no liquid public market are 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 valuation. The determined values are generally
discounted to account for restrictions on resale and minority ownership positions. The value of our equity interests in public companies for which market quotations are readily available is based on the public market price on the balance sheet date.
Securities that carry certain restrictions on resale are typically valued at a discount from the public market value of the security.

With respect to
loans or debt securities we hold in our portfolio for which there is no liquid public market, the fair value of such loans or debt securities normally corresponds to cost, unless the borrowers condition or other factors lead to a determination
of fair value at a different amount.



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Net Realized Gains/Losses and Net Change in Unrealized Appreciation/Depreciation

Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the original cost basis of the investment without regard
to unrealized appreciation or depreciation previously recognized. The original cost basis of the securities we receive in connection with our strategic alliance agreements and technology transfers is equal to the amount of revenue we recognized upon
the receipt of such securities.

Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the
reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Stock-Based
Compensation

Effective January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 123
(R), Share-Based Payment. Prior to the adoption of SFAS 123(R) we accounted for stock option grants using the intrinsic value method prescribed in APB Opinion No. 25, Accounting for Stock Issued to Employees, and
accordingly, recognized no compensation expense for stock option grants.

As a result of adopting SFAS 123(R), our income from operations before taxes, net
increase in net assets, basic earnings per share and diluted earnings per share were approximately $104,000, $98,000, $0.01 and $0.01 lower, respectively, for the three months ended March 31, 2007 and $81,000, $50,000, $0.01 and $0.00 lower,
respectively, for the three months ended March 31, 2006.

We use the Black-Scholes option pricing model to estimate the fair value of stock-based
awards on the date of grant, using assumptions for volatility, expected term, risk-free interest rate and dividend yield. We have used one grouping for the assumptions as our option grants are primarily basic with similar characteristics. The
expected term of options granted has been derived based upon our history of actual exercise behavior and represents the period of time that options granted are expected to be outstanding. Historical data was also used to estimate option exercises
and employee terminations. Estimated volatility is based upon our historical market price at consistent points in a period equal to the expected life of the options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at
the time of grant and the dividend yield is based on the our historical dividend yield.

Recently Issued Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, which
clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 provides guidance on the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. FIN 48
was effective for fiscal years beginning after December 15, 2006. On January 1, 2007, the Company adopted the provisions of FIN 48. The adoption did not have a material impact on the Companys financial position or results of operations.

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 159, The
Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115. SFAS No. 159 permits an entity to choose to measure many financial instruments and certain other items at fair
value. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. We are currently evaluating if we will elect the fair value option for any of our eligible financial
instruments and other items.



|ITEM 3. | Quantitative and Qualitative Disclosures about Market Risks
|------- | -----------------------------------------------------------

There
has been no material change in the quantitative and qualitative disclosures about market risk since December 31, 2006.



|ITEM 4. | Controls and Procedures
|------- | -----------------------

Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report on Form 10-Q, our principal executive officer and principal financial officer conducted an
evaluation of the effectiveness of the design and operations of the Companys disclosure controls and procedures, (as is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934). Based on their evaluation, our principal executive
officer and principal financial officer concluded that our disclosure controls and procedures were effective such that the information required to be included in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated
and communicated to our management, including our principal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure.

Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as
defined in Rule13a-15(f) of the Securities Exchange Act of 1934) that occurred during the our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Although we may from time to time be involved in
litigation and claims arising out of its operations in the normal course of its business, as of March 31, 2007, we were not a party to any material pending legal proceedings.



|Item 1A. | Risk Factors
|-------- | ------------

There have been no material changes to the risk
factors previously disclosed in the Companys annual report on Form 10K for the year ended December 31, 2006.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

Not
Applicable



|Item 3. | Defaults upon Senior Securities
|------- | -------------------------------

Not Applicable



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

Not Applicable



|Item 5. | Other Information
|------- | -----------------

Not Applicable



|Item 6. | Exhibits
|------- | --------

The following exhibits are filed with this report on Form
10-Q



|     |  |   |  |                                                                                                                                
|---- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------
|31.1 |  |  |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                
|     |  |  
|31.2 |  |  |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.                
|     |  |  
|32.1 |  |  |  | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
|     |  |  
|32.2 |  |  |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.



|                  |  |                                      |  | 
|----------------- |  | ------------------------------------ |  | 
|                  |  | UTEK CORPORATION                     |  | 
|                  |  | (Registrant)                         |  | 
|                  |  |                                     
|Date: May 4, 2007 |  | /s/ Clifford M. Gross                |  | 
|                  |  | Clifford M. Gross, Ph.D.             |  | 
|                  |  | Chairman and Chief Executive Officer |  | 
|                  |  |                                     
|Date: May 4, 2007 |  | /s/ Carole R. Wright                 |  | 
|                  |  | Carole R. Wright, CPA                |  | 
|                  |  | Chief Financial Officer              |  | 



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