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

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

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

----

| Large accelerated filer           | [   ]                                              |   | Accelerated filer      | [   ] |
|-----------------------------------|-----------------------------------------------------------------------------|--------|---------------------------------------|----------------------|
| Non-accelerated filer   | [   ]                                                        |   | Smaller reporting company   | [X]                  |
|                              | (Do not check if a smaller reporting company)      |   |                                  |

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|                                                                                                 | Page     |
|------------------------------------------------------------------------------------------------------|----------|
| PART I. FINANCIAL INFORMATION                                                                        | 1        |
| ITEM 1. Financial Statements                                                                         | 1        |
| Consolidated Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010                   | 1        |
| Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010 (unaudited) | 2        |
| Consolidated Statement of Changes in Equity for the three months ended March 31, 2011 (unaudited)    | 3        |
| Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010 (unaudited) | 4-5      |
| Notes to Consolidated Financial Statements (unaudited)                                               | 6-12     |
| ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations  | 13       |
| ITEM 3. Quantitative and Qualitative Disclosures about Market Risks                                  | 18       |
| ITEM 4. Controls and Procedures                                                                      | 18       |
|  PART II. OTHER INFORMATION                                                                     | 19       |
| ITEM 1.    Legal Proceedings                                                     | 19       |
| ITEM 1A. Risk Factors                                                                                | 19       |
| ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds           | 19       |
| ITEM 3.    Defaults Upon Senior Securities                                       | 19       |
| ITEM 4.    Reserved                                                              | 19       |
| ITEM 5.    Other Information                                                     | 19       |
| ITEM 6.    Exhibits                                                              | 19       |
| Signatures                                                                                           | 20       |
|      Exhibits                                                               | Attached |

----

|                                                                                                                                                                                                  |   | March 31,2011(Unaudited) |        |   | December 31,2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|--------|------------------|--------|
| ASSETS                                                                                                                                                                                                |   |                     |        |   |             |   |
| Current assets:                                                                                                                                                                                       |   |                     |        |   |             |   |
| Cash and cash equivalents                                                                                                                                                                             |   | $                        | 635,254     |   |             | $      | 262,619 |   |
| Accounts receivable, net                                                                                                                                                                              |   |                     | 1,722,780   |   |             |   | 1,796,454 |   |
| Contracts in process                                                                                                                                                                                  |   |                     | 335,023     |   |             |   | 214,734 |   |
| Available-for-sale securities                                                                                                                                                                         |   |                     | 121,443     |   |             |   | 171,139 |   |
| Prepaid expenses and other assets                                                                                                                                                                     |   |                     | 693,848     |   |             |   | 791,432 |   |
| Total current assets                                                                                                                                                                                  |   |                     | 3,508,348   |   |             |   | 3,236,378 |   |
| Cost method investments                                                                                                                                                                               |   |                     | 95,589      |   |             |   | 95,589 |   |
| Equity method investments                                                                                                                                                                             |   |                     | 303,454     |   |             |   | 303,454 |   |
| Note receivable and accrued interest                                                                                                                                                                  |   |                     | 1,700,000   |   |             |   | 1,700,000 |   |
| Fixed assets, net                                                                                                                                                                                     |   |                     | 6,686,126   |   |             |   | 6,736,567 |   |
| Goodwill                                                                                                                                                                                              |   |                     | 6,455,152   |   |             |   | 6,407,640 |   |
| Intangible assets, net                                                                                                                                                                                |   |                     | 5,909,262   |   |             |   | 6,174,792 |   |
| Total assets                                                                                                                                                                                          |   | $                        | 24,657,931  |   |             | $      | 24,654,420 |   |
|                                                                                                                                                                                                  |   |                     |        |   |             |   |   |   |
| LIABILITIES                                                                                                                                                                                           |   |                     |        |   |             |   |   |   |
| Current liabilities:                                                                                                                                                                                  |   |                     |        |   |             |   |   |   |
| Accounts payable                                                                                                                                                                                      |   | $                        | 1,014,658   |   |             | $      | 1,078,088 |   |
| Accrued expenses                                                                                                                                                                                      |   |                     | 658,688     |   |             |   | 420,707 |   |
| Deferred revenue                                                                                                                                                                                      |   |                     | 1,100,781   |   |             |   | 987,624 |   |
| Current maturities of long-term debt                                                                                                                                                                  |   |                     | 198,325     |   |             |   | 433,964 |   |
| Total current liabilities                                                                                                                                                                             |   |                     | 2,972,452   |   |             |   | 2,920,383 |   |
| Long-term debt, less current maturities                                                                                                                                                               |   |                     | 5,334,757   |   |             |   | 5,358,173 |   |
| Derivative liabilities                                                                                                                                                                                |   |                     | 2,934,013   |   |             |   | 1,140,005 |   |
| Deferred tax liability                                                                                                                                                                                |   |                     | 1,209,554   |   |             |   | 1,220,687 |   |
| Total liabilities                                                                                                                                                                                     |   |                     | 12,450,776  |   |             |   | 10,639,248 |   |
|                                                                                                                                                                                                  |   |                     |        |   |             |   |   |   |
| EQUITY                                                                                                                                                                                                |   |                     |        |   |             |   |   |   |
| Innovaro stockholders’ equity:                                                                                                                                                                  |   |                     |        |   |             |   |   |   |
| Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued andoutstanding                                                                                                              |   |                     |        |   |             |   |   |   |
| Common stock, $.01 par value, 29,000,000 shares authorized; 14,756,950 and14,631,950 shares issued; 14,585,261 and 14,585,261 shares outstanding atMarch 31, 2011 and December 31, 2010, respectively |   |                     | 145,853     |   |             |   | 145,853 |   |
| Additional paid-in capital                                                                                                                                                                            |   |                     | 85,107,282  |   |             |   | 85,024,704 |   |
| Accumulated deficit                                                                                                                                                                                   |   |                     | (73,724,599 | )      |             |   | (71,829,344 | ) |
| Accumulated other comprehensive income (loss)                                                                                                                                                         |   |                     | 155,009     |   |             |   | 147,922 |   |
| Total Innovaro stockholders’ equity                                                                                                                                                             |   |                     | 11,683,545  |   |             |   | 13,489,135 |   |
| Noncontrolling interest                                                                                                                                                                               |   |                     | 523,610     |   |             |   |  526,037 |   |
| Total equity                                                                                                                                                                                          |   |                     | 12,207,155  |   |             |   | 14,015,172 |   |
| Total liabilities and equity                                                                                                                                                                          |   | $                        | 24,657,931  |   |             | $      | 24,654,420 |   |

----

|                                                                        |   | Three Months Ended March 31, |       |
|-----------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                        |   | 2011                         |       |   | 2010 |   |
| Revenue:                                                                    |   |                         |       |   |   |   |
| Strategic services                                                          |   | $                            | 3,027,861  |   |   | $ | 1,430,042 |   |
| Technology services                                                         |   |                         | 574,868    |   |   |   | 840,389 |   |
|                                                                        |   |                         | 3,602,729  |   |   |   | 2,270,431 |   |
| Expenses:                                                                   |   |                         |       |   |   |   |   |   |
| Direct costs of revenue – Strategic services                          |   |                         | 1,681,562  |   |   |   | 1,004,424 |   |
| Direct costs of revenue – Technology services                         |   |                         | 333,242    |   |   |   | 443,948 |   |
| Salaries and wages                                                          |   |                         | 324,508    |   |   |   | 679,526 |   |
| Professional fees                                                           |   |                         | 88,279     |   |   |   | 201,289 |   |
| Research and development                                                    |   |                         | 303,577    |   |   |   | 199,159 |   |
| Sales and marketing                                                         |   |                         | 61,235     |   |   |   | 246,296 |   |
| General and administrative                                                  |   |                         | 504,686    |   |   |   | 595,250 |   |
| Depreciation and amortization                                               |   |                         | 341,088    |   |   |   | 400,495 |   |
|                                                                        |   |                         | 3,638,177  |   |   |   | 3,770,387 |   |
| Other (income) and expense:                                                 |   |                         |       |   |   |   |   |   |
| Other (income) expense                                                      |   |                         | 1,728,645  |   |   |   | (2,074 | ) |
| Interest expense, net                                                       |   |                         | 141,587    |   |   |   | 135,154 |   |
|                                                                        |   |                         | 1,870,232  |   |   |   | 133,080 |   |
|                                                                        |   |                         |       |   |   |   |   |   |
| Loss before income taxes                                                    |   |                         | (1,905,680 | ) |   |   | (1,633,036 | ) |
| Provision for income tax benefit                                            |   |                         | (7,998     | ) |   |   | (55,711 | ) |
|                                                                        |   |                         |       |   |   |   |   |   |
| Net loss from operations                                                    |   |                         | (1,897,682 | ) |   |   | (1,577,325 | ) |
|                                                                        |   |                         |       |   |   |   |   |   |
| Net loss attributable to the noncontrolling interest                        |   |                         | (2,427     | ) |   |   | (927 | ) |
| Net loss attributable to Innovaro stockholders                              |   | $                            | (1,895,255 | ) |   | $ | (1,576,398 | ) |
|                                                                        |   |                         |       |   |   |   |   |   |
|                                                                        |   |                         |       |   |   |   |   |   |
| Net loss attributable to Innovaro stockholders per share: Basic and diluted |   | $                            | (0.13      | ) |   | $ | (0.13 | ) |
|                                                                        |   |                         |       |   |   |   |   |   |
| Weighted average shares outstanding: Basic and diluted                      |   |                         | 15,022,761 |   |   |   | 11,797,140 |   |

----

|                                                      | Innovaro Stockholders' Equity |       |              |   |       |   |
|-----------------------------------------------------------|-------------------------------|------------|-------------------|--------|------------|--------|
|                                                      | Common Stock                  |       |              |   |       |   |   |   | AccumulatedOther |   | Non |   |   |   |
|                                                      | SharesIssued                  |       | SharesOutstanding |   | ParValue   |   | Paid-InCapital |   | ComprehensiveIncome (Loss) |   | AccumulatedDeficit |   | ComprehensiveIncome (Loss) |   | controllingInterest |   | Totals |   |
| Balances at December 31, 2010                             |                          | 14,631,950 |              |   | 14,585,261 |   | $ | 145,853 |   | $ | 85,024,704 |   |   |   | $ | (71,829,344 | ) | $ | 147,922 |   | $ | 526,037 |   | $ | 14,015,172 |   |
| Comprehensive loss:                                       |                          |       |              |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Net loss                                                  |                          | -          |              |   | -          |   |   | - |   |   | - |   | $ | (1,895,255 | ) |   | (1,895,255 | ) |   | - |   |   | (2,427 | ) |   | (1,897,682 | ) |
| Other comprehensive income (loss):                        |                          |       |              |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gain (loss) from available-for-sale securities |                          | -          |              |   | -          |   |   | - |   |   | - |   |   | (49,496 | ) |   | - |   |   | - |   |   | - |   |   | - |   |
| Foreign currency translation adjustments                  |                          | -          |              |   | -          |   |   | - |   |   | - |   |   | 56,583 |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Other comprehensive income (loss)                         |                          | -          |              |   | -          |   |   | - |   |   | - |   |   | 7,087 |   |   | - |   |   | 7,087 |   |   | - |   |   | 7,087 |   |
| Comprehensive loss                                        |                          |       |              |   |       |   |   |   |   |   |   |   | $ | (1,888,168 | ) |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of restricted stock                              |                          | 125,000    |              |   | -          |   |   | - |   |   | - |   |   |   |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Stock-based compensation expense                          |                          | -          |              |   | -          |   |   | - |   |   | 82,578 |   |   |   |   |   | - |   |   | - |   |   | - |   |   | 82,578 |   |
| Balances at March 31, 2011                                |                          | 14,756,950 |              |   | 14,585,261 |   | $ | 145,853 |   | $ | 85,107,282 |   |   |   |   | $ | (73,724,599 | ) | $ | 155,009 |   | $ | 523,610 |   | $ | 12,207,155 |   |

----

|                                                                                                                             |   | Three Months Ended March 31, |       |
|----------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                                                             |   | 2011                         |       |   | 2010 |   |
| Operating Activities:                                                                                                            |   |                         |       |   |   |   |
| Net loss attributable to Innovaro stockholders                                                                                   |   | $                            | (1,895,255 | ) |   | $ | (1,576,398 | ) |
| Adjustments to reconcile net loss attributable to Innovaro stockholders to net cash   flows from operating activities: |   |                         |       |   |   |   |   |   |
| Net loss attributable to noncontrolling interest                                                                                 |   |                         | (2,427     | ) |   |   | (927 | ) |
| Depreciation and amortization                                                                                                    |   |                         | 341,088    |   |   |   | 400,495 |   |
| Amortization of debt discount from investor warrants                                                                             |   |                         | 32,582     |   |   |   | 45,614 |   |
| Loss on sale and impairment of available-for-sale securities                                                                     |   |                         | 201        |   |   |   | 134,557 |   |
| Loss (gain) on derivative liabilities                                                                                            |   |                         | 1,794,008  |   |   |   | (54,309 | ) |
| Stock-based compensation                                                                                                         |   |                         | 82,578     |   |   |   | 147,745 |   |
| Deferred income taxes                                                                                                            |   |                         | (7,998     | ) |   |   | (55,711 | ) |
| Other                                                                                                                            |   |                         | 7,512      |   |   |   | 7,511 |   |
| Changes in operating assets and liabilities:                                                                                     |   |                         |       |   |   |   |   |   |
| Accounts receivable                                                                                                              |   |                         | (45,140    | ) |   |   | 152,330 |   |
| Prepaid expenses and other assets                                                                                                |   |                         | 97,584     |   |   |   | (34,824 | ) |
| Deferred revenue                                                                                                                 |   |                         | 113,157    |   |   |   | (69,906 | ) |
| Accounts payable and accrued expenses                                                                                            |   |                         | 174,551    |   |   |   | 61,652 |   |
| Net cash flows from operating activities                                                                                         |   |                         | 692,441    |   |   |   | (842,171 | ) |
|                                                                                                                             |   |                         |       |   |   |   |   |   |
| Investing Activities:                                                                                                            |   |                         |       |   |   |   |   |   |
| Capital expenditures                                                                                                             |   |                         | (22,758    | ) |   |   | (29,729 | ) |
| Proceeds from sale of available-for-sale securities                                                                              |   |                         | -          |   |   |   | 35,074 |   |
| Net cash flows from investing activities                                                                                         |   |                         | (22,758    | ) |   |   | 5,345 |   |
|                                                                                                                             |   |                         |       |   |   |   |   |   |
| Financing Activities:                                                                                                            |   |                         |       |   |   |   |   |   |
| Payments on long-term debt                                                                                                       |   |                         | (291,637   | ) |   |   | (101,015 | ) |
| Net cash flows from financing activities                                                                                         |   |                         | (291,637   | ) |   |   | (101,015 | ) |
|                                                                                                                             |   |                         |       |   |   |   |   |   |
| Effect of foreign exchange rates                                                                                                 |   |                         | (5,411     | ) |   |   | (1,986 | ) |
|                                                                                                                             |   |                         |       |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                                                                 |   |                         | 372,635    |   |   |   | (939,827 | ) |
| Cash and cash equivalents at beginning of period                                                                                 |   |                         | 262,619    |   |   |   | 2,118,970 |   |
| Cash and cash equivalents at end of period                                                                                       |   | $                            | 635,254    |   |   | $ | 1,179,143 |   |

----

|                                                                          |   | Three Months Ended March 31, |    |
|-------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                          |   | 2011                         |    |   | 2010 |   |
| Supplemental Disclosures of Non-Cash Investing and Financing Activities       |   |                         |    |   |   |   |
|                                                                          |   |                         |    |   |   |   |
| Unrealized gain (loss) from available-for-sale securities                     |   | $                            | (49,496 | ) |   | $ | 79,831 |   |
|                                                                          |   |                         |    |   |   |   |   |   |
| The Company transferred certain equity interests in a subsidiary to satisfy a |   |                         |    |   |   |   |   |   |
| severance obligation resulting in the following:                              |   |                         |    |   |   |   |   |   |
| Noncontrolling interest                                                       |   |                         |    |   |   | $ | 532,132 |   |
| Increase to additional paid-in capital                                        |   |                         |    |   |   |   | 17,868 |   |
|                                                                          |   |                         |    |   |   | $ | 550,000 |   |
|                                                                          |   |                         |    |   |   |   |   |   |
|                                                                          |   |                         |    |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information                             |   |                         |    |   |   |   |   |   |
|                                                                          |   |                         |    |   |   |   |   |   |
| Cash paid for taxes                                                           |   | $                            | -       |   |   | $ | - |   |
| Cash paid for interest                                                        |   | $                            | 125,053 |   |   | $ | 84,690 |   |

----

----

|                                                                                                       |   | Three Months Ended March 31 |       |
|------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                                                       |   | 2011                        |       |   | 2010 |   |
| Weighted average outstanding shares of common stock (1)                                                    |   |                        | 15,022,761 |   |   |   | 11,797,140 |   |
| Dilutive effect of stock options, warrants and unvested     shares of restricted stock |   |                        | -          |   |   |   | - |   |
| Common stock and common stock equivalents                                                                  |   |                        | 15,022,761 |   |   |   | 11,797,140 |   |
|     Shares excluded from calculation of diluted EPS (2)                                |   |                        | 2,942,023  |   |   |   | 1,647,900 |   |

| (1)   | Included in basic earnings per share are 437,500 fully vested common stock warrants at $0.01 per share. |
|-----------------|---------------------------------------------------------------------------------------------------------|

| (2) | These shares attributable to outstanding stock options, warrants and unvested restricted stock were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive, primarily as a result of the net loss during the periods presented. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                  |   | March 31,2011 |      |   | December 31,2010 |   |
|---------------------------------------|--------|---------------|-----------|--------|------------------|--------|
| Trade accounts receivable             |   | $             | 1,298,807 |   |             | $      | 1,408,047 |   |
| Less: allowance for doubtful accounts |   |          | (12,403   | )      |             |   | (14,926 | ) |
| Unbilled receivables                  |   |          | 99,001    |   |             |   | - |   |
| Unbilled client costs                 |   |          | 337,375   |   |             |   | 403,333 |   |
| Total accounts receivable             |   | $             | 1,722,780 |   |             | $      | 1,796,454 |   |

|                                                                                 |   | March 31,2011 |      |   | December 31,2010 |   |
|--------------------------------------------------------------------------------------|--------|---------------|-----------|--------|------------------|--------|
| Contract costs and estimated profits on     contracts in process |   | $             | 2,391,145 |   |             | $      | 3,712,143 |   |
| Less advances and progress payments                                                  |   |          | 2,056,122 |   |             |   | 3,497,409 |   |
| Total contracts in process                                                           |   | $             | 335,023   |   |             | $      | 214,734 |   |

|                    |   |   |    |   | Unrealized (1) |   |    | Realized |   |   |   |   |
|-------------------------|--------|--------|---------|--------|----------------|--------|---------|----------|--------|--------|--------|--------|
|                    |   | Cost   |    |   | Gains          |   |    | Losses   |   |   | Losses |   |   | Fair Value |   |
| As of March 31, 2011    |   | $      | 42,100  |   |           | $      | 79,544  |     |   | $      | -      |   |   | $ | (201 | ) |   | $ | 121,443 |   |
| As of December 31, 2010 |   | $      | 225,400 |   |           | $      | 129,132 |     |   | $      | (93    | )      |   | $ | (183,300 | ) |   | $ | 171,139 |   |

----

|                                                                                               |   | Three Months EndedMarch 31, 2011 |    |
|----------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|
| Unrealized holding gain (loss) arising during the period                                           |   | $                                | (49,588 | ) |
| Add back: reclassification adjustment for net gains included     in net income |   |                             | 92      |   |
| Unrealized gain (loss) from available-for-sale securities, net                                     |   | $                                | (49,496 | ) |

| ·   | Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities. |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | Level 2—Quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3—Unobservable inputs for the asset or liability. |
|--------------------|---------------------------------------------------------------|

|                                                                          |   | Fair Value Measurements atMarch 31, 2011 Using |       |   | Fair Value Measurements atDecember 31, 2010 Using |   |
|-------------------------------------------------------------------------------|--------|------------------------------------------------|------------|--------|---------------------------------------------------|--------|
|                                                                          |   | Level 2                                        |       |   | Total                                             |   |   | Level 2 |   |   | Total |   |
| Assets:                                                                       |   |                                           |       |   |                                              |   |   |   |   |   |   |   |
|     Available-for-sale securities                         |   | $                                              | 121,443    |   |                                              | $      | 121,443 |   |   | $ | 171,139 |   |   | $ | 171,139 |   |
|           Total assets      |   | $                                              | 121,443    |   |                                              | $      | 121,443 |   |   | $ | 171,139 |   |   | $ | 171,139 |   |
|                                                                          |   |                                           |       |   |                                              |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                  |   |                                           |       |   |                                              |   |   |   |   |   |   |   |   |   |   |   |
|     Derivative liabilities                                |   | $                                              | (2,934,013 | )      |                                              | $      | (2,934,013 | ) |   | $ | (1,140,005 | ) |   | $ | (1,140,005 | ) |
|           Total liabilities |   | $                                              | (2,934,013 | )      |                                              | $      | (2,934,013 | ) |   | $ | (1,140,005 | ) |   | $ | (1,140,005 | ) |

----

|                     |   | March 31,2011 |   |   | December31,2010 |   |
|--------------------------|--------|--------------------|--------|--------|-----------------|--------|
| Expected dividend yield  |   | 0%                 |   |   | 0%              |   |
| Expected volatility      |   | 52-55%             |   |   | 53-54%          |   |
| Risk-free interest rate  |   | 1.29 - 2.24%       |   |   | 2.01%           |   |
| Expected life of options |   | 3.5 - 4.8 years    |   |   | 3.8 - 5.0 years |   |
| Fair value               |   | $1.16 - $2.77      |   |   | $0.35 - $ 1.42  |   |

|                         |   | Unrealizedgain (loss)from available-for-salesecurities |    |   | Foreigncurrencytranslationadjustment |   |   | Accumulatedothercomprehensiveincome (loss) |   |
|------------------------------|--------|--------------------------------------------------------|---------|--------|--------------------------------------|--------|--------|--------------------------------------------|--------|
| Balance at December 31, 2010 |   | $                                                      | 129,040 |   |                                 | $      | 18,882 |                                       |   | $ | 147,922 |   |
| Gain (loss) for the period   |   |                                                   | (49,496 | )      |                                 |   | 56,583 |                                       |   |   | 7,087 |   |
| Balance at March 31, 2011    |   | $                                                      | 79,544  |   |                                 | $      | 75,465 |                                       |   | $ | 155,009 |   |

|                                                       |   | Three Months Ended |      |
|------------------------------------------------------------|--------|--------------------|-----------|
|                                                       |   | Mar 31, 2011       |      |   | Mar 31, 2010 |   |
| Loss on sale and impairment of investments                 |   | $                  | 201       |   |   | $ | 134,557 |   |
| Loss (gain) on derivative liabilities                      |   |               | 1,794,008 |   |   |   | (54,309 | ) |
| Rental income                                              |   |               | (70,686   | ) |   |   | (61,351 | ) |
| Other                                                      |   |               | 5,122     |   |   |   | (20,971 | ) |
|       Other (income) expense |   | $                  | 1,728,645 |   |   | $ | (2,074 | ) |

----

|                                |   | UnitedKingdom |      |   | UnitedStates |   |       | Total  |   |
|-------------------------------------|--------|---------------|-----------|--------|--------------|--------|------------|--------|--------|
| Long-lived assets March 31, 2011    |   | $             | 1,743,743 |   |         | $      | 17,306,797 |   |   | $ | 19,050,540 |   |
| Total assets March 31, 2011         |   |          | 1,871,784 |   |         |   | 22,786,147 |   |   |   | 24,657,931 |   |
| Long-lived assets December 31, 2010 |   |          | 1,711,729 |   |         |   | 17,607,270 |   |   |   | 19,318,999 |   |
| Total assets December 31, 2010      |   |          | 1,796,827 |   |         |   | 22,857,593 |   |   |   | 24,654,420 |   |

|                          |   | For the Three Months Ended March 31, 2011 |    |
|-------------------------------|--------|-------------------------------------------|---------|
|                          |   | UnitedKingdom                             |    |   | UnitedStates |   |   | Total |   |
| Revenue                       |   | $                                         | 132,009 |   |   | $ | 3,470,720 |   |   | $ | 3,602,729 |   |
| Loss before income taxes      |   |                                      | (51,356 | ) |   |   | (1,854,324 | ) |   |   | (1,905,680 | ) |
| Depreciation and amortization |   |                                      | 28,872  |   |   |   | 312,216 |   |   |   | 341,088 |   |

|                          |   | For the Three Months Ended March 31, 2010 |     |
|-------------------------------|--------|-------------------------------------------|----------|
|                          |   | UnitedKingdom                             |     |   | UnitedStates |   |   | Total |   |
| Revenue                       |   | $                                         | 239,874  |   |   | $ | 2,030,557 |   |   | $ | 2,270,431 |   |
| Loss before income taxes      |   |                                      | (232,304 | ) |   |   | (1,400,732 | ) |   |   | (1,633,036 | ) |
| Depreciation and amortization |   |                                      | 107,590  |   |   |   | 292,905 |   |   |   | 400,495 |   |

|                              |   | For the Three Months Ended March 31, 2011 |      |
|-----------------------------------|--------|-------------------------------------------|-----------|
|                              |   | StrategicServices                         |      |   | TechnologyServices |   |   | Administrativeand Other |   |   | Total |   |
| Revenue                           |   | $                                         | 3,027,861 |   |   | $ | 574,868 |   |   | $ | - |   |   | $ | 3,602,729 |   |
| Income (loss) before income taxes |   |                                      | 1,202,674 |   |   |   | (3,022 | ) |   |   | (3,105,332 | ) |   |   | (1,905,680 | ) |

|                              |   | For the Three Months Ended March 31, 2010 |      |
|-----------------------------------|--------|-------------------------------------------|-----------|
|                              |   | StrategicServices                         |      |   | TechnologyServices |   |   | Administrativeand Other |   |   | Total |   |
| Revenue                           |   | $                                         | 1,430,042 |   |   | $ | 840,389 |   |   | $ | - |   |   | $ | 2,270,431 |   |
| Income (loss) before income taxes |   |                                      | 294,995   |   |   |   | (63,812 | ) |   |   | (1,864,219 | ) |   |   | (1,633,036 | ) |

----

----

| ·   | Identifying and developing new segments and markets; |
|--------------------|------------------------------------------------------|

| ·   | Creating and acting on game-changing strategies; |
|--------------------|--------------------------------------------------|

| ·   | Building an enterprise-wide capability for innovation; |
|--------------------|--------------------------------------------------------|

| ·   | Accelerating and improving new product development processes; and |
|--------------------|-------------------------------------------------------------------|

| ·   | Assessing a company’s innovation capability. |
|--------------------|----------------------------------------------------|

| ·   | Futures scenario development and planning |
|--------------------|-------------------------------------------|

| ·   | Custom and syndicated research |
|--------------------|--------------------------------|

| ·   | Online information services |
|--------------------|-----------------------------|

| ·   | IP consulting |
|--------------------|--------------------|

| ·   | IP and market landscape analysis |
|--------------------|----------------------------------|

| ·   | Technology search |
|--------------------|-------------------|

| ·   | In- and out-licensing |
|--------------------|-----------------------|

| ·   | Online marketplaces |
|--------------------|---------------------|

| ·   | Partner search and profiling |
|--------------------|------------------------------|

----

|                               | Three Months EndedMarch 31, |   |   | PercentageChange |
|------------------------------------|----------------------------------|--------|--------|------------------|
| (in thousands, except percentages) | 2011                             |   |   | 2010             |   |   |   |   |
| Strategic services                 | $                           | 3,028  |   |             | $ | 1,430 |   |   | 112 | % |
| Technology services                |                             | 575    |   |             |   | 840 |   |   | (32 | )% |
| Total revenue                      | $                           | 3,603  |   |             | $ | 2,270 |   |   | 59 | % |

----

| (in thousands, except percentages)            |   | ThreeMonthsEndedMarch 31,2011 |   |   | GrossProfitMargin |   |   | ThreeMonthsEndedMarch 31,2010 |   |   | GrossProfitMargin |   |
|-----------------------------------------------|--------|-------------------------------|--------|--------|-------------------|--------|--------|-------------------------------|--------|--------|-------------------|--------|
| Direct costs of revenue - strategic services  |   | $                             | 1,682  |   |              | 44     | %      |                          | $      | 1,004  |              |   |   | 30 | % |
| Direct costs of revenue - technology services |   |                          | 333    |   |              | 42     | %      |                          |   | 444    |              |   |   | 47 | % |
| Total direct costs of revenue                 |   | $                             | 2,015  |   |              |   |   |                          | $      | 1,448  |              |   |   |   |   |

|                               |   | Three Months Ended March 31, |   |    |   Percentage |   |
|------------------------------------|--------|------------------------------|--------|---------|-------------------|--------|
| (in thousands, except percentages) |   | 2011                         |   |    | 2010              |   |   | Change |   |
| Salaries and wages                 |   | $                            | 325    |    |              | $      | 680 |   |   |   | (52) | %  |
| As a percent of revenue            |   |                         | 9      | %  |              |   | 30 | %  |   |   | (21) | ppt |

----

|                               |   | Three Months Ended March 31, |   |   | PercentageChange |   |
|------------------------------------|--------|------------------------------|--------|--------|------------------|--------|
| (in thousands, except percentages) |   | 2011                         |   |   | 2010             |   |   |   |   |
| Professional fees                  |   | $                            | 88     |   |             | $      | 201 |   |   |   | (56 | )% |
| As a percent of revenue            |   |                         | 2      | %      |             |   | 9 | % |   | (7) | ppt |

|                               |   | Three Months Ended March 31, |   |   | PercentageChange |   |
|------------------------------------|--------|------------------------------|--------|--------|------------------|--------|
| (in thousands, except percentages) |   | 2011                         |   |   | 2010             |   |   |   |   |
| Research and development           |   | $                            | 304    |   |             | $      | 199 |   |   |   | 52 | % |
| As a percent of revenue            |   |                         | 8      | %      |             |   | 9 | % |   | (1) | ppt |

|                               |   | Three Months Ended March 31, |   |   | PercentageChange |   |
|------------------------------------|--------|------------------------------|--------|--------|------------------|--------|
| (in thousands, except percentages) |   | 2011                         |   |   | 2010             |   |   |   |   |
| Sales and marketing                |   | $                            | 61     |   |             | $      | 246 |   |   |   | (75 | )% |
| As a percent of revenue            |   |                         | 2      | %      |             |   | 11 | % |   | (9) | ppt |

|                               |   | Three Months Ended March 31, |   |   | PercentageChange |   |
|------------------------------------|--------|------------------------------|--------|--------|------------------|--------|
| (in thousands, except percentages) |   | 2011                         |   |   | 2010             |   |   |   |   |
| General and administrative         |   | $                            | 505    |   |             | $      | 595 |   |   |   | (15) | % |
| As a percent of revenue            |   |                         | 14     | %      |             |   | 26 | % |   | (12) | ppt |

----

|                               |   | Three Months Ended March 31, |   |   | PercentageChange |   |
|------------------------------------|--------|------------------------------|--------|--------|------------------|--------|
| (in thousands, except percentages) |   | 2011                         |   |   | 2010             |   |   |   |   |
| Depreciation and amortization      |   | $                            | 341    |   |             | $      | 400 |   |   |   | (15) | % |
| As a percent of revenue            |   |                         | 9      | %      |             |   | 18 | % |   | (9) | ppt |

| ·   | $1.8 million loss on derivative liabilities; |
|--------------------|----------------------------------------------|

| ·   | $374,000 in non-cash depreciation and amortization; |
|--------------------|-----------------------------------------------------|

| ·   | $83,000 in non-cash stock-based compensation expense related to vesting options; and |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | $289,000 increase in accounts payable and deferred revenue. |
|--------------------|-------------------------------------------------------------|

----

| ·   | $1.9 million net operating loss. |
|--------------------|----------------------------------|

----

| 10.1 | -- | Employment Offer Letter for Chief Executive Officer position between Innovaro, Inc. and Asa Lanum dated April 18, 2011.         |
|------|----|---------------------------------------------------------------------------------------------------------------------------------|
| 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. |

----

|                                                        |   |   | INNOVARO, INC.    (Registrant) |   |
|-------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                                        |   |   |                                          |   |
| Date: May 10, 2011            |   |   | /s/ Asa Lanum                                 |   |
|                                                        |   |   | Asa LanumChief Executive Officer              |   |
|                                                        |   |   |                                          |   |
|                                                        |   |   |                                          |   |
| Date:  May 10, 2011      |   |   | /s/ Carole R. Wright                          |   |
|                                                        |   |   | Carole R. Wright, CPAChief Financial Officer  |   |