##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

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

For the quarterly period ended September 30, 2008



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

Commission File Number 814-00203





UTEK CORPORATION

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act.



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

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 November 5, 2008, there were 10,877,096 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                                                                                          |  | 3 
|Consolidated Statements of Assets and Liabilities as of September 30, 2008 (unaudited) and December 31,
2007          |  | 3 
|Consolidated Statements of Operations  For the Three and Nine Months Ended September 
30, 2008 and 2007 (unaudited)  |  | 4 
|Consolidated Statements of Cash Flows  For the Nine Months Ended September 30, 2008 and 2007 (unaudited)             |  | 5 
|Consolidated Statements of Changes in Net Assets  For the Nine Months Ended September 
30, 2008 and 2007 (unaudited) |  | 7 
|Financial Highlights For the Nine Months Ended September 30, 2008 and 2007 (unaudited)                                |  | 8 
|Schedule of Investments as of September 30, 2008 (unaudited) and December 31, 2007                                    |  | 9 
|Notes to Consolidated Financial Statements (unaudited)                                                                |  | 19
|ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations                         |  | 32
|ITEM 3. Quantitative and Qualitative Disclosures about Market Risks                                                   |  | 44
|ITEM 4. Controls and Procedures                                                                                       |  | 44
|                                                                                                                      | 
|PART II. OTHER INFORMATION                                                                                            |  |   
|ITEM 1. Legal Proceedings                                                                                             |  | 45
|ITEM 1A. Risk Factors                                                                                                 |  | 45
|ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                   |  | 45
|ITEM 3. Defaults Upon Senior Securities                                                                               |  | 45
|ITEM 4. Submission of Matters to a Vote of Security Holders                                                           |  | 45
|ITEM 5. Other Information                                                                                             |  | 45
|ITEM 6. Exhibits                                                                                                      |  | 45
|Signatures                                                                                                            |  | 46
|Exhibits                                                                                                              |  |   



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PART I. FINANCIAL INFORMATION

|ITEM 1. | Financial Statements
|------- | --------------------

UTEK Corporation

Consolidated Statements of Assets and Liabilities



|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                                                                                          |  | September 30,2008(Unaudited) |             |   | December 31,2007 |  
|ASSETS                                                                                                                                                                                                    |  |                              |             |   |                  |   |             |  
|Investments:                                                                                                                                                                                              |  |                              |             |   |                  |   |             |  
|Non-affiliate investments (cost: 2008 - $37,619,164; 2007 - $31,588,337)                                                                                                                                  |  | $                            | 7,246,230   |   |                  | $ | 6,705,850   |  
|Affiliate investments (cost: 2008 - $37,312,344; 2007 - $43,779,616)                                                                                                                                      |  |                              | 3,950,000   |   |                  |   | 14,429,000  |  
|Controlled investments (cost: 2008 - $12,430,248; 2007 - $17,231,458)                                                                                                                                     |  |                              | 3,233,300   |   |                  |   | 7,768,561   |  
|U.S. Treasuries and certificates of deposit (cost: 2008 - $3,203,990; 2007 - $1,498,346)                                                                                                                  |  |                              | 3,203,990   |   |                  |   | 1,498,346   |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|Total investments                                                                                                                                                                                         |  |                              | 17,633,520  |   |                  |   | 30,401,757  |  
|Cash and cash equivalents                                                                                                                                                                                 |  |                              | 5,588,306   |   |                  |   | 5,254,576   |  
|Accounts receivable, net of allowance for bad debt (2008 - $176,000; 2007 - $36,000)                                                                                                                      |  |                              | 3,448,907   |   |                  |   | 358,338     |  
|Prepaid expenses and other assets                                                                                                                                                                         |  |                              | 738,150     |   |                  |   | 378,248     |  
|Fixed assets, net                                                                                                                                                                                         |  |                              | 493,012     |   |                  |   | 476,578     |  
|Goodwill                                                                                                                                                                                                  |  |                              | 9,993,865   |   |                  |   | 2,821,064   |  
|Intangible assets, net                                                                                                                                                                                    |  |                              | 9,437,828   |   |                  |   | 123,812     |  
|Deferred tax asset                                                                                                                                                                                        |  |                              |            |   |                  |   | 5,406,704   |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|TOTAL ASSETS                                                                                                                                                                                              |  |                              | 47,333,588  |   |                  |   | 45,221,077  |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|LIABILITIES                                                                                                                                                                                               |  |                              |             |   |                  |   |             |  
|Accrued expenses                                                                                                                                                                                          |  |                              | 6,740,553   |   |                  |   | 790,693     |  
|Deferred revenue                                                                                                                                                                                          |  |                              | 1,090,154   |   |                  |   | 755,836     |  
|Deferred tax liability                                                                                                                                                                                    |  |                              | 652,796     |   |                  |   |            |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|TOTAL LIABILITIES                                                                                                                                                                                         |  |                              | 8,483,503   |   |                  |   | 1,546,529   |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|NET ASSETS                                                                                                                                                                                                |  | $                            | 38,850,085  |   |                  | $ | 43,674,548  |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|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, 29,000,000 shares authorized; 11,136,932 and 9,011,276 shares issued; 10,378,083 and 9,011,276 shares
outstanding at September 30, 2008 and December 31, 2007, respectively |  | $                            | 103,782     |   |                  | $ | 90,114      |  
|Additional paid-in capital                                                                                                                                                                                |  |                              | 69,734,893  |   |                  |   | 53,148,643  |  
|Accumulated income:                                                                                                                                                                                       |  |                              |             |   |                  |   |             |  
|Accumulated net operating income                                                                                                                                                                          |  |                              | 27,080,725  |   |                  |   | 33,498,108  |  
|Net realized loss on investments, net of income taxes                                                                                                                                                     |  |                              | (7,264,775  | ) |                  |   | (3,512,598  | )
|Net unrealized depreciation of investments, net of deferred income taxes                                                                                                                                  |  |                              | (50,292,449 | ) |                  |   | (39,703,173 | )
|Foreign currency translation adjustment                                                                                                                                                                   |  |                              | (512,091    | ) |                  |   | 153,454     |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|Net assets                                                                                                                                                                                                |  | $                            | 38,850,085  |   |                  | $ | 43,674,548  |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  
|Net asset value per share                                                                                                                                                                                 |  | $                            | 3.74        |   |                  | $ | 4.85        |  
|                                                                                                                                                                                                          |  |                              |             |   |                  |   |             |  

See accompanying notes



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UTEK Corporation

Consolidated Statements of Operations

(Unaudited)



|                                                                                                       |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|------------------------------------------------------------------------------------------------------ |  | -------------------------- | ----------- | - | ------------------------- | - | --------- | ---- |  | - | ----------- | - |  | - | ---------- | -
|                                                                                                       |  | Three Months Ended Sept 30 |             |   | Nine Months Ended Sept 30 |  
|                                                                                                       |  | 2008                       |             |   | 2007                      |   |           | 2008 |  |   | 2007        |  
|Income from operations:                                                                                |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Innovation consulting services                                                                         |  | $                          | 5,139,683   |   |                           | $ |          |      |  | $ | 7,719,310   |   |  | $ |           |  
|Sale of technology rights                                                                              |  |                            | 750,000     |   |                           |   | 2,920,800 |      |  |   | 4,684,680   |   |  |   | 14,835,550 |  
|Subscription and other services                                                                        |  |                            | 1,033,792   |   |                           |   | 647,329   |      |  |   | 2,995,214   |   |  |   | 2,716,094  |  
|Investment income, net                                                                                 |  |                            | 134,931     |   |                           |   | 126,785   |      |  |   | 254,386     |   |  |   | 479,490    |  
|                                                                                                       |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|                                                                                                       |  |                            | 7,058,406   |   |                           |   | 3,694,914 |      |  |   | 15,653,590  |   |  |   | 18,031,134 |  
|                                                                                                       |  |                            |             |  
|Expenses:                                                                                              |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Direct costs of innovation consulting services                                                         |  |                            | 4,567,812   |   |                           |   |          |      |  |   | 6,885,694   |   |  |   |           |  
|Acquisition of technology rights                                                                       |  |                            | 300,000     |   |                           |   | 837,565   |      |  |   | 1,780,000   |   |  |   | 3,170,844  |  
|Salaries and wages                                                                                     |  |                            | 1,140,570   |   |                           |   | 889,349   |      |  |   | 3,505,608   |   |  |   | 2,663,656  |  
|Professional fees                                                                                      |  |                            | 275,967     |   |                           |   | 504,500   |      |  |   | 834,229     |   |  |   | 1,118,608  |  
|Sales and marketing                                                                                    |  |                            | 602,236     |   |                           |   | 398,110   |      |  |   | 1,836,020   |   |  |   | 1,488,388  |  
|General and administrative                                                                             |  |                            | 1,471,260   |   |                           |   | 665,879   |      |  |   | 3,375,794   |   |  |   | 2,105,432  |  
|Goodwill impairment                                                                                    |  |                            |            |   |                           |   |          |      |  |   |            |   |  |   | 33,030     |  
|                                                                                                       |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|                                                                                                       |  |                            | 8,357,845   |   |                           |   | 3,295,403 |      |  |   | 18,217,345  |   |  |   | 10,579,958 |  
|                                                                                                       |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Income (loss) before income taxes                                                                      |  |                            | (1,299,439  | ) |                           |   | 399,511   |      |  |   | (2,563,755  | ) |  |   | 7,451,176  |  
|Provision for income tax expense (benefit)                                                             |  |                            | 4,198,654   |   |                           |   | 211,319   |      |  |   | 3,853,627   |   |  |   | 3,093,762  |  
|                                                                                                       |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Net (loss) income from operations                                                                      |  |                            | (5,498,093  | ) |                           |   | 188,192   |      |  |   | (6,417,382  | ) |  |   | 4,357,414  |  
|                                                                                                       |  |                            |             |  
|Net realized and unrealized gains (losses):                                                            |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Net realized loss on investments, net of income tax benefit                                            |  |                            | (275,303    | ) |                           |   | (551,958  | )    |  |   | (3,752,177  | ) |  |   | (1,690,238 | )
|Change in unrealized appreciation (depreciation) of investments, net of deferred tax expense (benefit) |  |                            | (6,541,649  | ) |                           |   | 229,749   |      |  |   | (10,589,276 | ) |  |   | (6,792,496 | )
|                                                                                                       |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Net decrease in net assets from operations                                                             |  | $                          | (12,315,045 | ) |                           | $ | (134,017  | )    |  | $ | (20,758,835 | ) |  | $ | (4,125,320 | )
|                                                                                                       |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Net decrease in net assets from operations per share:                                                  |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Basic                                                                                                  |  | $                          | (1.21       | ) |                           | $ | (0.01     | )    |  | $ | (2.15       | ) |  | $ | (0.46      | )
|Diluted                                                                                                |  | $                          | (1.21       | ) |                           | $ | (0.01     | )    |  | $ | (2.15       | ) |  | $ | (0.46      | )
|Weighted average shares:                                                                               |  |                            |             |   |                           |   |           |      |  |   |             |   |  |   |            |  
|Basic                                                                                                  |  |                            | 10,176,742  |   |                           |   | 9,009,776 |      |  |   | 9,653,725   |   |  |   | 8,982,339  |  
|Diluted                                                                                                |  |                            | 10,176,742  |   |                           |   | 9,009,776 |      |  |   | 9,653,725   |   |  |   | 8,982,339  |  

See accompanying notes



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UTEK Corporation

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                                                 |  |                           |             |   |      |   |             |  
|---------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                                                                                 |  | Nine Months Ended Sept 30 |            
|                                                                                                                 |  | 2008                      |             |   | 2007 |  
|Operating Activities:                                                                                            |  |                           |             |   |      |   |             |  
|Net decrease in net assets from operations                                                                       |  | $                         | (20,758,835 | ) |      | $ | (4,125,320  | )
|Adjustments to reconcile net decrease in net assets from operations to net cash flows from operating activities: |  |                           |             |   |      |   |             |  
|Change in net unrealized depreciation of investments                                                             |  |                           | 9,274,746   |   |      |   | 10,890,646  |  
|Net proceeds from sale (purchases) of short-term investments                                                     |  |                           | (1,705,644  | ) |      |   | 2,487,169   |  
|Proceeds received on sale of equity investments                                                                  |  |                           | 1,865,052   |   |      |   | 1,169,783   |  
|Net repayment from (investment in) UTEK Real Estate Holdings, Inc.                                               |  |                           | 1,965,261   |   |      |   | (721,156    | )
|Depreciation and amortization                                                                                    |  |                           | 663,104     |   |      |   | 160,455     |  
|Goodwill impairment                                                                                              |  |                           |            |   |      |   | 33,030      |  
|Loss on sale of investments                                                                                      |  |                           | 6,016,002   |   |      |   | 2,710,019   |  
|Loss on disposal of fixed assets                                                                                 |  |                           | 13,363      |   |      |   | 14,360      |  
|Bad debt expense                                                                                                 |  |                           | 78,886      |   |      |   | 150,467     |  
|Stock-based compensation                                                                                         |  |                           | 560,257     |   |      |   | 443,047     |  
|Deferred income taxes                                                                                            |  |                           | 2,904,339   |   |      |   | (2,024,168  | )
|Investment securities received in connection with the sale of technology rights                                  |  |                           | (4,559,680  | ) |      |   | (14,635,550 | )
|Consulting and other services rendered in exchange for investment securities                                     |  |                           | (45,269     | ) |      |   | (953,590    | )
|Changes in operating assets and liabilities:                                                                     |  |                           |             |   |      |   |             |  
|Accounts receivable                                                                                              |  |                           | (695,819    | ) |      |   | 252,286     |  
|Prepaid expenses and other assets                                                                                |  |                           | (265,799    | ) |      |   | 40,773      |  
|Deferred revenue                                                                                                 |  |                           | (290,439    | ) |      |   | (232,483    | )
|Accrued expenses                                                                                                 |  |                           | 4,466,976   |   |      |   | 202,548     |  
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Net cash flows from operating activities                                                                         |  |                           | (513,499    | ) |      |   | (4,137,684  | )
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Investing Activities:                                                                                            |  |                           |             |   |      |   |             |  
|Cash received in connection with acquisitions                                                                    |  |                           | 747,808     |   |      |   |            |  
|Purchases of fixed assets                                                                                        |  |                           | (29,725     | ) |      |   | (41,251     | )
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Net cash flows from investing activities                                                                         |  |                           | 718,083     |   |      |   | (41,251     | )
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Financing Activities:                                                                                            |  |                           |             |   |      |   |             |  
|Distributions to stockholders                                                                                    |  |                           |            |   |      |   | (179,032    | )
|Proceeds from exercise of stock options                                                                          |  |                           | 189,794     |   |      |   | 523,091     |  
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Net cash flows from financing activities                                                                         |  |                           | 189,794     |   |      |   | 344,059     |  
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Foreign currency translation adjustment                                                                          |  |                           | (60,648     | ) |      |   | 14,116      |  
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Increase (decrease) in cash and cash equivalents                                                                 |  |                           | 333,730     |   |      |   | (3,820,760  | )
|Cash and cash equivalents at beginning of year                                                                   |  |                           | 5,254,576   |   |      |   | 9,685,111   |  
|                                                                                                                 |  |                           |             |   |      |   |             |  
|Cash and cash equivalents at end of period                                                                       |  | $                         | 5,588,306   |   |      | $ | 5,864,351   |  
|                                                                                                                 |  |                           |             |   |      |   |             |  

See accompanying notes



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UTEK Corporation

Consolidated Statements of Cash Flows (continued)

(Unaudited)



|                                                                                                                                                                 |  |                          |           |      |   |        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | --------- | ---- | - | -------
|                                                                                                                                                                 |  | Nine MonthsEnded Sept 30
|                                                                                                                                                                 |  | 2008                     |           | 2007
|Supplemental Disclosures of Non-Cash Investing Activities                                                                                                        |  |                          |           |      |   |        
|The Company issued 153,967 shares of common stock to purchase Pharmalicensing Limited. In conjunction with the acquisition, liabilities were
assumed as follows: |  |                          |           |      |   |        
|Fair value of assets acquired                                                                                                                                    |  | $                        | 2,534,197 |      |   |        
|Fair value of common stock issued                                                                                                                                |  |                          | 2,150,000 |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|Liabilities assumed                                                                                                                                              |  | $                        | 384,197   |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|The Company issued 502,970 shares of common stock to purchase Strategos. In conjunction with the acquisition, liabilities were assumed as
follows:               |  |                          |           |      |   |        
|Fair value of assets acquired                                                                                                                                    |  | $                        | 9,339,383 |      |   |        
|Fair value of common stock issued                                                                                                                                |  |                          | 6,040,669 |      |   |        
|Less: contingent liability incurred                                                                                                                              |  |                          | 1,952,340 |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|Liabilities assumed                                                                                                                                              |  | $                        | 1,346,374 |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|The Company issued 345,857 shares of common stock to purchase Innovaro Limited. In conjunction with the acquisition, liabilities were assumed
as follows:        |  |                          |           |      |   |        
|Fair value of assets acquired                                                                                                                                    |  | $                        | 4,945,313 |      |   |        
|Fair value of common stock issued                                                                                                                                |  |                          | 3,664,313 |      |   |        
|Foreign currency translation adjustment                                                                                                                          |  |                          | 52,875    |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|Liabilities assumed                                                                                                                                              |  | $                        | 1,228,125 |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|The Company issued 329,670 shares of common stock in connection with the Strategos earnout contingency as of September 30,
2008                                  |  | $                        | 3,959,337 |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|The Company issued 3,328 shares of common stock in connection with the Innovaro earnout contingency as of September 30,
2008                                     |  | $                        | 35,547    |      |   |        
|                                                                                                                                                                 |  |                          |           |      |   |        
|Investment securities received for unearned services                                                                                                             |  | $                        | 87,500    |      | $ | 280,463
|                                                                                                                                                                 |  |                          |           |      |   |        

See accompanying notes



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##### Table of Contents

UTEK Corporation

Consolidated Statements of Changes in Net Assets

(Unaudited)



|                                                                                    |  |                           |             |   |      |   |            |  
|----------------------------------------------------------------------------------- |  | ------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                                                    |  | Nine Months Ended Sept 30 |            
|                                                                                    |  | 2008                      |             |   | 2007 |  
|Changes in net assets from operations:                                              |  |                           |             |   |      |   |            |  
|Net income (loss) from operations                                                   |  | $                         | (6,417,382  | ) |      | $ | 4,357,414  |  
|Net realized loss on sale of investments, net of related income taxes               |  |                           | (3,752,177  | ) |      |   | (1,690,238 | )
|Change in net unrealized depreciation of investments, net of related deferred taxes |  |                           | (10,589,276 | ) |      |   | (6,792,496 | )
|                                                                                    |  |                           |             |   |      |   |            |  
|Net decrease in net assets from operations                                          |  |                           | (20,758,835 | ) |      |   | (4,125,320 | )
|                                                                                    |  |                           |             |   |      |   |            |  
|Distributions to stockholders:                                                      |  |                           |             |   |      |   |            |  
|From net income from operations (1)                                                 |  |                           |            |   |      |   |           |  
|                                                                                    |  |                           |             |   |      |   |            |  
|Capital stock transactions:                                                         |  |                           |             |   |      |   |            |  
|Proceeds from the exercise of stock options                                         |  |                           | 189,794     |   |      |   | 523,091    |  
|Stock-based compensation                                                            |  |                           | 560,257     |   |      |   | 443,047    |  
|Acquisition of Pharmalicensing Ltd.                                                 |  |                           | 2,150,000   |   |      |   |           |  
|Acquisition of Strategos                                                            |  |                           | 6,040,669   |   |      |   |           |  
|Acquisition of Innovaro, Ltd.                                                       |  |                           | 3,664,313   |   |      |   |           |  
|Strategos earnout                                                                   |  |                           | 3,959,337   |   |      |   |           |  
|Innovaro earnout                                                                    |  |                           | 35,547      |   |      |   |           |  
|                                                                                    |  |                           |             |   |      |   |            |  
|Net increase in net assets from stock transactions                                  |  |                           | 16,599,917  |   |      |   | 966,138    |  
|                                                                                    |  |                           |             |   |      |   |            |  
|Foreign currency translation adjustment                                             |  |                           | (665,545    | ) |      |   | 14,116     |  
|                                                                                    |  |                           |             |   |      |   |            |  
|Net decrease in net assets                                                          |  |                           | (4,824,463  | ) |      |   | (3,145,066 | )
|Net assets at beginning of year                                                     |  |                           | 43,674,548  |   |      |   | 50,981,162 |  
|                                                                                    |  |                           |             |   |      |   |            |  
|Net assets at end of period                                                         |  | $                         | 38,850,085  |   |      | $ | 47,836,096 |  
|                                                                                    |  |                           |             |   |      |   |            |  



|(1) | Distributions to stockholders as noted in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2007 was included in net income from operations for a
prior period; therefore, it is not reflected as a distribution to stockholders for purposes of this schedule.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes



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UTEK Corporation

Financial Highlights

(Unaudited)



|                                                                                            |  |                           |            |    |      |   |            |  
|------------------------------------------------------------------------------------------- |  | ------------------------- | ---------- | -- | ---- | - | ---------- | -
|                                                                                            |  | Nine Months Ended Sept 30 |           
|                                                                                            |  | 2008                      |            |    | 2007 |  
|PER SHARE INFORMATION                                                                       |  |                           |            |    |      |   |            |  
|Net asset value, beginning of period                                                        |  | $                         | 4.85       |    |      | $ | 5.71       |  
|Net income (loss) from operations (1)                                                       |  |                           | (0.66      | )  |      |   | 0.49       |  
|Net change in realized losses and unrealized depreciation on investments, (after taxes) (2) |  |                           | (2.12      | )  |      |   | (1.00      | )
|Foreign currency translation adjustment (1)                                                 |  |                           | (0.05      | )  |      |   |           |  
|Net increase from stock transactions (1)                                                    |  |                           | 1.72       |    |      |   | 0.11       |  
|Distributions to stockholders from net income from operations                               |  |                           |           |    |      |   |           |  
|                                                                                            |  |                           |            |    |      |   |            |  
|Net asset value, end of period                                                              |  | $                         | 3.74       |    |      | $ | 5.31       |  
|                                                                                            |  |                           |            |    |      |   |            |  
|Per share market value, end of period                                                       |  | $                         | 10.15      |    |      | $ | 14.75      |  
|                                                                                            |  |                           |            |    |      |   |            |  
|Investment return, based on market price at end of period                                   |  |                           | (23        | )% |      |   | 30         | %
|                                                                                            |  |                           |            |    |      |   |            |  
|RATIOS/SUPPLEMENTAL DATA                                                                    |  |                           |            |    |      |   |            |  
|Net assets, end of period                                                                   |  | $                         | 38,850,085 |    |      | $ | 47,836,096 |  
|Ratio of expenses to average net assets                                                     |  |                           | 44         | %  |      |   | 21         | %
|Ratio of net income (loss) from operations to average net assets                            |  |                           | (16        | )% |      |   | 9          | %
|Diluted weighted average number of shares outstanding during the period                     |  |                           | 9,653,725  |    |      |   | 8,982,339  |  



|(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 asset 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 the difference in the net asset value at the beginning and end of period inherently does not equal the per share changes of the line items disclosed.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Distributions to stockholders as noted in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2007 was accrued at December 31, 2006;
therefore, it is not reflected as a distribution to stockholders for purposes of this schedule.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes



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UTEK Corporation

Consolidated Schedule of Investments

September 30, 2008

(Unaudited)



|           |  |                     |  |                                                                                                                                                 |  |                    |           |       |   |                        |  |      |  
|---------- |  | ------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | ----- | - | ---------------------- |  | ---- | -
|Shares     |  | Dates ofAcquisition |  |                                                                                                                                                 |  | OriginalCost Basis |           | Value |   | Percentageof NetAssets | 
|           |  |                     |  | Non-Affiliate Investments (1)                                                                                                                   |  |                    |           |       |   |                        |  |      |  
|           |  |                     |  |                                                                                                                                                 | 
|           |  |                     |  | Advanced Medical Isotope Corporation (9)                                                                                                        |  |                    |           |       |   |                        |  |      |  
|           |  |                     |  | Medical isotope processes                                                                                                                       |  |                    |           |       |   |                        |  |      |  
|95,000     |  | 9/06                |  | Series A Convertible Preferred Stock                                                                                                            |  | $                  | 1,803,417 |       | $ | 1,750,400              |  | 4.5  | %
|600,000    |  | 5/06                |  | Common Stock                                                                                                                                    |  |                    | 63,000    |       |   | 288,000                |  | 0.7  |  
|560,003    |  | 1/07                |  | MiMedx Group, Inc. (MiMedx, Inc.) Connective tissue technology Cyberlux Corporation(7) LED lighting solutions                                   |  |                    |          |       |   | 1,995,000              |  | 5.1  |  
|148,000    |  | 11/06-1/07          |  | Series C Convertible Preferred Stock                                                                                                            |  |                    | 2,181,640 |       |   | 1,295,200              |  | 3.3  |  
|25,931,484 |  | 1/07                |  | Common Stock                                                                                                                                    |  |                    | 502,558   |       |   | 121,200                |  | 0.3  |  
|           |  |                     |  |                                                                                                                                                 | 
|           |  |                     |  | Platina Energy Group Inc. Oil and gas exploration and production                                                                                |  |                    |           |       |   |                        |  |      |  
|92,000     |  | 3/08                |  | Series F Convertible Preferred Stock                                                                                                            |  |                    | 794,880   |       |   | 794,900                |  | 2.0  |  
|(6)        |  | 4/07                |  | Oxygen Biotherapeutics, Inc.(Synthetic Blood Intnl, Inc) Biotechnology products Advanced Refractive
Technologies, Inc. Ophthalmic technologies |  |                    | 120,000   |       |   | 350,000                |  | 0.9  |  
|100,000    |  | 4/06                |  | Series D Convertible Preferred Stock                                                                                                            |  |                    | 1,996,176 |       |   | 140,000                |  | 0.4  |  
|97,000     |  | 3/06                |  | Series C Convertible Preferred Stock                                                                                                            |  |                    | 2,066,063 |       |   | 135,800                |  | 0.3  |  
|97,000     |  | 12/05               |  | Series B Convertible Preferred Stock                                                                                                            |  |                    | 1,032,675 |       |   | 70,600                 |  | 0.2  |  
|4,000,000  |  | 5/06                |  | Common Stock                                                                                                                                    |  |                    | 76,368    |       |   | 100                    |  | <0.1 |  
|321,020    |  | 6/08                |  | CSMG Technologies, Inc. Environmental and medical technologies                                                                                  |  |                    | 300,300   |       |   | 179,800                |  | 0.5  |  
|40,000     |  | 7/06                |  | Bacterin International, Inc.(privately held) Bioactive coatings for medical devices                                                             |  |                    | 120,000   |       |   | 40,000                 |  | 0.1  |  
|60,000     |  | 12/05               |  | Metamorphix Global, Inc.(privately held) (10) Design and manufacture of countertops                                                             |  |                    | 120,000   |       |   | 36,000                 |  | <0.1 |  
|109,091    |  | 7/06                |  | Turbine Truck Engines, Inc. Heavy-duty highway truck engines                                                                                    |  |                    | 72,000    |       |   | 19,200                 |  | <0.1 |  
|6,706      |  | 5/06-6/06           |  | Codima, Inc.(KKS Venture Management/ Rheologics) Study of blood viscosity                                                                       |  |                    | 86,100    |       |   | 9,900                  |  | <0.1 |  
|1,200,000  |  | 10/06               |  | Laserlock Technologies, Inc. Security solutions for the gaming industry                                                                         |  |                    | 24,100    |       |   | 7,800                  |  | <0.1 |  
|86,432     |  | 10/06-9/07          |  | GammaCan International, Inc. Anti-cancer immunotherapy                                                                                          |  |                    | 41,859    |       |   | 6,600                  |  | <0.1 |  
|9,748      |  | 4/06-3/07           |  | Xethanol Corporation(10) Bioethanol and derivative products                                                                                     |  |                    | 88,836    |       |   | 2,400                  |  | <0.1 |  
|1,250,010  |  | 5/06                |  | In Veritas Medical Diagnostics, Inc. Medical devices designs and testing                                                                        |  |                    | 74,400    |       |   | 2,300                  |  | <0.1 |  
|2,971      |  | 12/05-8/06          |  | Industrial Biotechnology Corporation Provider of renewable resources                                                                            |  |                    | 3,455,105 |       |   | 1,000                  |  | <0.1 |  
|16,667     |  | 9/05-4/06           |  | Quest Minerals & Mining Corporation Coal and mineral mining                                                                                     |  |                    | 69,044    |       |   | 30                     |  | <0.1 |  
|387,097    |  | 6/06                |  | Tradequest International, Inc. Provider of voice over internet protocol                                                                         |  |                    | 76,092    |       |   |                       |  | 0.0  |  
|660,000    |  | 6/05                |  | BP International, Inc. Shade structures                                                                                                         |  |                    | 78,852    |       |   |                       |  | 0.0  |  
|1,886      |  | 9/05-6/08           |  | Applied Wellness Corporation (New Life Scientific, Inc.) Pharmaceutical biotechnologies                                                         |  |                    | 81,816    |       |   |                       |  | 0.0  |  



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|            |  |            |  |                                                                                                                           |  |   |            |  |   |           |  |      |  
|----------- |  | ---------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- |  | - | --------- |  | ---- | -
|232,211     |  | 5/05       |  | EFuel EFN Corp. (Preservation Sciences, Inc.) Internet sites host                                                         |  |   |           |  |   |          |  | 0.0  |  
|140,000     |  | 3/05       |  | AdAl Group, Inc. (5) Aluminum
extruded products manufacturer                                                              |  |   | 72,912     |  |   |          |  | 0.0  |  
|6           |  | 5/06-6/06  |  | EFT BioTech Holdings, Inc. (HumWare Media Corp.) Media advertising UBA Technology, Inc. Software development              |  |   | 14,236     |  |   |          |  | 0.0  |  
|2,525,740   |  | 2/06-6/06  |  | Common Stock                                                                                                              |  |   | 1,652,899  |  |   |          |  | 0.0  |  
|95,000      |  | 4/06       |  | Series A Convertible Preferred Stock                                                                                      |  |   | 1,619,849  |  |   |          |  | 0.0  |  
|7,787,565   |  | 6/05-6/06  |  | Trio Industries Group, Inc. Protective powder coating KP Renewables Plc (Kwikpower International Plc) (5)Renewable energy |  |   | 12,330,401 |  |   |          |  | 0.0  |  
|            |  | 5/06       |  | Convertible Debenture, due 5/10/07                                                                                        |  |   | 4,433,403  |  |   |          |  | 0.0  |  
|            |  | 9/05       |  | Convertible Debenture, due 9/30/06                                                                                        |  |   | 1,884,920  |  |   |          |  | 0.0  |  
|2,500       |  | 3/05       |  | Common Stock                                                                                                              |  |   | 94,500     |  |   |          |  | 0.0  |  
|261,234     |  | 7/04-7/05  |  | eLinear, Inc. (5)                                                                                                         |  |   | 190,763    |  |   |          |  | 0.0  |  
|            |  |            |  |                                                                                                                           |  |   |            |  |   |           |  |      |  
|            |  |            |  | Telecommunication security provider                                                                                       |  |   |            |  |   |           |  |      |  
|            |  |            |  | Total Investments in Non-Affiliates                                                                                       |  | $ | 37,619,164 |  | $ | 7,246,230 |  | 18.7 | %
|            |  |            |  |                                                                                                                           |  |   |            |  |   |           |  |      |  
|            |  |            |  | Affiliate Investments (2)                                                                                                 |  |   |            |  |   |           |  |      |  
|            |  |            |  |                                                                                                                           | 
|            |  |            |  | World Energy Solutions, Inc. (8) Energy saving technologies                                                               |  |   |            |  |   |           |  |      |  
|200,000     |  | 6/08-9/08  |  | Series C Convertible Preferred Stock                                                                                      |  | $ | 1,625,000  |  | $ | 1,450,000 |  | 3.7  | %
|18,042,749  |  | 9/05-6/08  |  | Common Stock                                                                                                              |  |   | 4,715,949  |  |   | 631,500   |  | 1.6  |  
|            |  |            |  | CytoDyn, Inc. Novel
therapeutic agents                                                                                    |  |   |            |  |   |           |  |      |  
|2,040,000   |  | 4/06-7/06  |  | Common Stock                                                                                                              |  |   | 3,640,772  |  |   | 244,800   |  | 0.6  |  
|100,000     |  | 1/07       |  | Series A Convertible Preferred Stock                                                                                      |  |   | 845,000    |  |   | 260,000   |  | 0.7  |  
|49,500,000  |  | 7/07       |  | MachineTalker, Inc. Intelligent wireless security networks                                                                |  |   | 993,000    |  |   | 334,100   |  | 0.9  |  
|412,000     |  | 9/07       |  | NeoStem, Inc. Stem cell
banking services MATECH Corporation (Material Technologies, Inc.) Metal fatigue detection         |  |   | 761,440    |  |   | 329,000   |  | 0.8  |  
|17,822,061  |  | 12/06-6/07 |  | Common Stock                                                                                                              |  |   | 4,170,070  |  |   | 24,200    |  | <0.1 |  
|47,500      |  | 1/07       |  | Series E Convertible Preferred Stock                                                                                      |  |   | 694,640    |  |   | 277,900   |  | 0.7  |  
|6,609,345   |  | 6/07       |  | American Soil Technologies,Inc. Fertilizer innovation                                                                     |  |   | 1,554,809  |  |   | 115,700   |  | 0.3  |  
|3,373,107   |  | 7/06-9/07  |  | Avalon Oil and Gas, Inc. Oil
and gas producers                                                                            |  |   | 2,448,681  |  |   | 101,200   |  | 0.3  |  
|1,426,754   |  | 9/07       |  | USTelematics, Inc.(11) Broadband telecommunication for moving vehicles                                                    |  |   |           |  |   | 96,300    |  | 0.2  |  
|15,150,717  |  | 4/05-6/08  |  | Emission & Power Solutions, Inc. (Fuel FX International, Inc.) (privately held) Reductional environmental emissions       |  |   | 4,080,142  |  |   | 37,900    |  | <0.1 |  
|4,426,136   |  | 7/06       |  | DME Interactive Holdings, Inc. Multi-media entertainment                                                                  |  |   | 752,443    |  |   | 24,300    |  | <0.1 |  
|153,417,714 |  | 12/06-4/07 |  | Cargo Connection Logistics Holdings, Inc. World trade logistics                                                           |  |   | 959,972    |  |   | 21,500    |  | <0.1 |  
|6,839,500   |  | 5/06-8/06  |  | NetFabric Holdings, Inc. Information technology services                                                                  |  |   | 581,677    |  |   | 1,600     |  | <0.1 |  
|6,000,000   |  | 7/07       |  | Pathway One Plc(5) Sales and development licenses                                                                         |  |   | 852,300    |  |   |          |  | 0.0  |  



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|            |  |             |  |                                                                                        |  |   |            |  |   |           |  |      |  
|----------- |  | ----------- |  | -------------------------------------------------------------------------------------- |  | - | ---------- |  | - | --------- |  | ---- | -
|            |  |             |  | Manakoa Services Corporation(9) Compliance analysis and monitoring                     |  |   |            |  |   |           |  |      |  
|95,000      |  | 1/07        |  | Series B Convertible Preferred Stock                                                   |  |   | 2,280,000  |  |   |          |  | 0.0  |  
|7,799,515   |  | 8/04-4/07   |  | Common Stock                                                                           |  |   | 2,122,641  |  |   |          |  | 0.0  |  
|33,730,000  |  | 4/05-1/06   |  | WebSky, Inc. Broadband
wireless                                                        |  |   | 897,750    |  |   |          |  | 0.0  |  
|4,221,165   |  | 4/01-12/02  |  | Stealth MediaLabs, Inc.(11) Software products                                          |  |   | 1,708,000  |  |   |          |  | 0.0  |  
|            |  |             |  | NutriPure Beverages, Inc. (Liberty Diversified Holdings, Inc.) Printing and packaging  |  |   |            |  |   |           |  |      |  
|5,346       |  | 7/06-9/06   |  | Common Stock                                                                           |  |   | 1,245,258  |  |   |          |  | 0.0  |  
|63,981      |  | 2/07        |  | Series D Convertible Preferred Stock                                                   |  |   | 382,800    |  |   |          |  | 0.0  |  
|            |  |             |  |                                                                                        |  |   |            |  |   |           |  |      |  
|            |  |             |  | Total Investments in Affiliates                                                        |  | $ | 37,312,344 |  | $ | 3,950,000 |  | 10.2 | %
|            |  |             |  |                                                                                        |  |   |            |  |   |           |  |      |  
|            |  |             |  |                                                                                        | 
|            |  |             |  | Control Investments (3)                                                                |  |   |            |  |   |           |  |      |  
|1,000       |  | 11/99-11/06 |  | UTEK Real Estate Holdings, Inc. (privately held) Real estate development               |  | $ | 4,131,574  |  | $ | 3,222,000 |  | 8.3  | %
|15,009,402  |  | 3/06-5/07   |  | Klegg Electronics, Inc. Manufacturer/distributor for retail electronic products        |  |   | 6,506,174  |  |   | 11,300    |  | <0.1 |  
|210,000,000 |  | 1/08        |  | RIM Semiconductor Company                                                              |  |   | 1,792,500  |  |   |          |  | 0.0  |  
|            |  |             |  |                                                                                        |  |   |            |  |   |           |  |      |  
|            |  |             |  | Data transmission technology                                                           |  |   |            |  |   |           |  |      |  
|            |  |             |  | Total Investments in Control Investments                                               |  | $ | 12,430,248 |  | $ | 3,233,300 |  | 8.3  | %
|            |  |             |  |                                                                                        |  |   |            |  |   |           |  |      |  
|            |  |             |  |                                                                                        | 
|            |  |             |  | U.S. Treasuries and Certificates of Deposit (4)                                        |  |   |            |  |   |           |  |      |  
|            |  |             |  | Certificates of Deposit:                                                               |  |   |            |  |   |           |  |      |  
|95,000      |  | 7/08        |  | Wright Express Finl Svcs Corp CD, maturity 10/7/08, interest rate 2.90%                |  |   | 94,997     |  |   | 94,997    |  | 0.2  | %
|100,000     |  | 5/08        |  | Sovereign Bank Dallas TX CD, maturity 10/14/08, interest rate @ 3.00%                  |  |   | 99,994     |  |   | 99,994    |  | 0.3  |  
|100,000     |  | 5/08        |  | Home Svgs Bank of America Little Falls MN CD, maturity 10/15/08, interest rate @ 2.95% |  |   | 99,991     |  |   | 99,991    |  | 0.3  |  
|95,000      |  | 6/08        |  | FirstBank PR Santurce CD, maturity 10/20/08, interest rate @ 3.00%                     |  |   | 94,990     |  |   | 94,990    |  | 0.2  |  
|100,000     |  | 7/08        |  | Doral Bank Catano PR CD, maturity 10/29/08, interest rate @ 3.55%                      |  |   | 99,850     |  |   | 99,850    |  | 0.3  |  
|95,000      |  | 6/08        |  | Fidelity Bank Wichita KS CD, maturity 10/30/08, interest rate @ 3.00%                  |  |   | 94,984     |  |   | 94,984    |  | 0.2  |  
|95,000      |  | 6/08        |  | Pacific Comm Bank LA CD, maturity 10/30/08, interest rate @ 3.05%                      |  |   | 94,988     |  |   | 94,988    |  | 0.2  |  
|100,000     |  | 5/08        |  | Beal Bank SSB Plano TX CD, maturity 11/12/08, interest rate @ 2.90%                    |  |   | 99,967     |  |   | 99,967    |  | 0.3  |  
|100,000     |  | 5/08        |  | GE Money Bank Dep CTF CD, maturity 11/13/08, interest rate @ 3.00%                     |  |   | 100,000    |  |   | 100,000   |  | 0.3  |  
|100,000     |  | 5/08        |  | New South Fed Svgs Bank CD, maturity 11/14/08, interest rate @ 2.95%                   |  |   | 99,972     |  |   | 99,972    |  | 0.3  |  
|100,000     |  | 5/08        |  | Standard Bank & Trust Co CD, maturity 11/14/08, interest rate @ 3.00%                  |  |   | 99,977     |  |   | 99,977    |  | 0.3  |  
|100,000     |  | 5/08        |  | Crescent Bank CD, maturity 11/17/08, interest rate @ 3.00%                             |  |   | 99,977     |  |   | 99,977    |  | 0.3  |  
|100,000     |  | 5/08        |  | Merchants Bank CD, maturity 11/17/08, interest rate @ 2.85%                            |  |   | 99,958     |  |   | 99,958    |  | 0.3  |  
|95,000      |  | 6/08        |  | EuroBank Hato Rey PR CD, maturity 11/18/08, interest rate @ 3.00%                      |  |   | 94,978     |  |   | 94,978    |  | 0.2  |  
|95,000      |  | 6/08        |  | First Chicago Bank & Trust ILL CD, maturity 11/18/08, interest rate @ 3.00%            |  |   | 94,982     |  |   | 94,982    |  | 0.2  |  
|100,000     |  | 5/08        |  | Bank Union CD, maturity 11/21/08, interest rate @ 3.00%                                |  |   | 99,981     |  |   | 99,981    |  | 0.3  |  



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|        |  |      |  |                                                                                |  |   |            |  |   |            |  |       |  
|------- |  | ---- |  | ------------------------------------------------------------------------------ |  | - | ---------- |  | - | ---------- |  | ----- | -
|100,000 |  | 5/08 |  | Signature Bank of Arkansas CD, maturity 11/21/08, interest rate @ 3.00%        |  |   | 99,981     |  |   | 99,981     |  | 0.3   |  
|95,000  |  | 8/08 |  | National City BK Cleveland OH CTF CD, maturity 11/28/08, interest rate @ 2.30% |  |   | 94,879     |  |   | 94,879     |  | 0.2   |  
|95,000  |  | 8/08 |  | SCB BK Shelbyville IND CD, maturity 11/28/08, interest rate @ 2.30%            |  |   | 94,880     |  |   | 94,880     |  | 0.2   |  
|95,000  |  | 8/08 |  | Sterling BK & TR Southfield MI CD, maturity 11/28/08, interest rate @ 2.40%    |  |   | 94,894     |  |   | 94,894     |  | 0.2   |  
|95,000  |  | 8/08 |  | Eagle Natl BK Miami FL CTF Dep act CD, maturity 8/29/08, interest rate @ 2.40% |  |   | 94,889     |  |   | 94,889     |  | 0.2   |  
|95,000  |  | 5/08 |  | GE Capital Finl Inc CD, maturity 12/4/08, interest rate @ 3.00%                |  |   | 94,977     |  |   | 94,977     |  | 0.2   |  
|95,000  |  | 8/08 |  | Israel Disc BK New York NY CD, maturity 12/5/08, interest rate @ 2.30%         |  |   | 94,867     |  |   | 94,867     |  | 0.2   |  
|95,000  |  | 5/08 |  | First Cmnty Bank CD, maturity 12/8/08, interest rate @ 3.00%                   |  |   | 94,977     |  |   | 94,977     |  | 0.2   |  
|95,000  |  | 6/08 |  | AmTrust Bank Cleveland OH CD, maturity 12/12/08, interest rate @ 3.05%         |  |   | 94,987     |  |   | 94,987     |  | 0.2   |  
|95,000  |  | 6/08 |  | State Bank India Chicago ILL CD, maturity 12/12/08, interest rate @ 3.10%      |  |   | 94,996     |  |   | 94,996     |  | 0.2   |  
|100,000 |  | 5/08 |  | First State Bank of Blakely CD, maturity 12/16/08, interest rate @ 3.05%       |  |   | 99,993     |  |   | 99,993     |  | 0.3   |  
|100,000 |  | 5/08 |  | Liberty Bank Inc CD, maturity 12/16/08, interest rate @ 3.00%                  |  |   | 99,983     |  |   | 99,983     |  | 0.3   |  
|100,000 |  | 5/08 |  | Nevada Sec Bank CD, maturity 12/22/08, interest rate @ 3.05%                   |  |   | 99,988     |  |   | 99,988     |  | 0.3   |  
|95,000  |  | 8/08 |  | Cornerstone BK Atlanta GA CD, maturity 12/29/08, interest rate @ 2.40%         |  |   | 94,853     |  |   | 94,853     |  | 0.2   |  
|95,000  |  | 8/08 |  | MBank Manitisque MI CD, maturity 12/29/08, interest rate @ 2.50%               |  |   | 94,875     |  |   | 94,985     |  | 0.2   |  
|95,000  |  | 8/08 |  | Sun Amern BK Boca Raton FL CD, maturity 1/29/09, interest rate @ 2.60%         |  |   | 94,848     |  |   | 94,848     |  | 0.2   |  
|95,000  |  | 8/08 |  | SunTrust Bank CD, maturity 9/12/09, interest rate @ 4.21%                      |  |   | 95,537     |  |   | 95,537     |  | 0.2   |  
|        |  |      |  |                                                                                |  |   |            |  |   |            |  |       |  
|        |  |      |  | Total Certificates of Deposit                                                  |  | $ | 3,203,990  |  | $ | 3,203,990  |  | 8.2   | %
|        |  |      |  |                                                                                |  |   |            |  |   |            |  |       |  
|        |  |      |  | Total Investments in U.S. Treasuries and CDs                                   |  | $ | 3,203,990  |  | $ | 3,203,990  |  | 8.2   | %
|        |  |      |  |                                                                                |  |   |            |  |   |            |  |       |  
|        |  |      |  | TOTAL INVESTMENTS                                                              |  | $ | 90,565,746 |  | $ | 17,633,520 |  | 45.4  | %
|        |  |      |  |                                                                                |  |   |            |  |   |            |  |       |  
|        |  |      |  | Cash and other assets, less liabilities                                        |  |   |            |  | $ | 21,216,565 |  | 54.6  | %
|        |  |      |  |                                                                                |  |   |            |  |   |            |  |       |  
|        |  |      |  | Net assets at September 30, 2008                                               |  |   |            |  | $ | 38,850,085 |  | 100.0 | %
|        |  |      |  |                                                                                |  |   |            |  |   |            |  |       |  



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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 Notes to the Consolidated Financial Statements.)
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | As of September 30, 2008, 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 or where the Company holds one or more seats on such companys board of directors. 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) | Investment consists of warrants to purchase 1,500,000 shares of Oxygen Biotherapeutics, Inc., formerly Synthetic Blood International, Inc., common stock.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | During the period ended September 30, 2008, 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 September 30, 2008, the Company reclassified this investment from Control investments to Affiliate investments based on the criteria in notes
(2) and (3).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

|(11) | Stealth MediaLabs, Inc. and USTelematics, Inc. are related through common management.
|---- | -------------------------------------------------------------------------------------

See accompanying notes



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UTEK Corporation

Consolidated Schedule of Investments

December 31, 2007



|          |  |                     |  |                                                                                       |  |                    |           |       |   |                        |  |      |  
|--------- |  | ------------------- |  | ------------------------------------------------------------------------------------- |  | ------------------ | --------- | ----- | - | ---------------------- |  | ---- | -
|Shares    |  | Dates ofAcquisition |  |                                                                                       |  | OriginalCost Basis |           | Value |   | Percentageof NetAssets | 
|          |  |                     |  | Non-Affiliate Investments (1)                                                         |  |                    |           |       |   |                        |  |      |  
|          |  |                     |  |                                                                                       | 
|          |  |                     |  | Advanced Medical Isotope Corporation (12) Medical isotope processes                   |  |                    |           |       |   |                        |  |      |  
|95,000    |  | 9/06                |  | Preferred Stock                                                                       |  | $                  | 1,803,417 |       | $ | 1,750,000              |  | 4.0  | %
|600,000   |  | 5/06                |  | Common Stock                                                                          |  |                    | 63,000    |       |   | 324,000                |  | 0.7  |  
|478,562   |  | 1/06                |  | Broadcast International, Inc. Telecommunications                                      |  |                    | 579,060   |       |   | 1,682,100              |  | 3.9  |  
|          |  |                     |  | Advanced Refractive Technologies, Inc. Ophthalmic technologies                        |  |                    |           |       |   |                        |  |      |  
|100,000   |  | 4/06                |  | Series D Preferred Stock                                                              |  |                    | 1,996,176 |       |   | 560,000                |  | 1.3  |  
|97,000    |  | 3/06                |  | Series C Preferred Stock                                                              |  |                    | 2,066,063 |       |   | 543,200                |  | 1.2  |  
|97,000    |  | 12/05               |  | Series B Preferred Stock                                                              |  |                    | 1,032,675 |       |   | 282,300                |  | 0.6  |  
|4,000,000 |  | 5/06                |  | Common Stock                                                                          |  |                    | 76,368    |       |   | 400                    |  | <0.1 |  
|560,000   |  | 1/07                |  | MiMedx, Inc. (privately held) Connective tissue technology                            |  |                    |          |       |   | 840,000                |  | 1.9  |  
|(7)       |  | 4/07                |  | Synthetic Blood International, Inc. Biotechnology products                            |  |                    | 120,000   |       |   | 233,700                |  | 0.5  |  
|40,000    |  | 7/06                |  | Bacterin International, Inc. (privately held) Bioactive coatings for medical devices  |  |                    | 120,000   |       |   | 120,000                |  | 0.3  |  
|60,000    |  | 12/05               |  | Metamorphix Global, Inc. (privately held) (13) Design and manufacture of countertops  |  |                    | 120,000   |       |   | 90,000                 |  | 0.2  |  
|171,432   |  | 10/06-9/07          |  | GammaCan International, Inc. Anti-cancer immunotherapy                                |  |                    | 83,016    |       |   | 65,100                 |  | 0.1  |  
|264,333   |  | 1/07                |  | Ecosphere Technologies, Inc. Defense, homeland security and global ship repair        |  |                    | 97,300    |       |   | 47,600                 |  | 0.1  |  
|109,091   |  | 7/06                |  | Turbine Truck Engines, Inc. Heavy-duty highway truck engines                          |  |                    | 72,000    |       |   | 41,500                 |  | 0.1  |  
|269,230   |  | 8/06                |  | Protocall Technologies, Inc. On-demand software and entertainment                     |  |                    | 11,577    |       |   | 31,500                 |  | 0.1  |  
|697,860   |  | 8/06-11/06          |  | Magnitude Information Systems, Inc. Computer ergonomics                               |  |                    | 25,920    |       |   | 27,900                 |  | 0.1  |  
|2,560,000 |  | 8/04-11/06          |  | TenthGate, Inc. (8) Healthcare related products and services                          |  |                    | 40,000    |       |   | 24,200                 |  | 0.1  |  
|180,000   |  | 5/06                |  | U.S. Starcom, Inc. Communications services and products                               |  |                    | 17,181    |       |   | 12,000                 |  | <0.1 |  
|9,748     |  | 4/06-3/07           |  | Xethanol Corporation (13) Bioethanol and derivative products                          |  |                    | 88,836    |       |   | 5,850                  |  | <0.1 |  
|825,852   |  | 5/06-7/06           |  | MM2 Group, Inc. Financial
consulting for nutraceuticals                               |  |                    | 32,685    |       |   | 5,800                  |  | <0.1 |  
|1,200,000 |  | 10/06               |  | Laserlock Technologies, Inc. Security solutions for the gaming industry               |  |                    | 24,100    |       |   | 5,100                  |  | <0.1 |  
|808,529   |  | 12/04               |  | SolarBrook Water and Power Corp. (HydroFlo, Inc.) Treatment and purification of water |  |                    | 125,861   |       |   | 3,900                  |  | <0.1 |  
|660,000   |  | 6/05                |  | BP International, Inc. Shade
structures                                               |  |                    | 78,852    |       |   | 3,400                  |  | <0.1 |  
|1,250,010 |  | 5/06                |  | In Veritas Medical Diagnostics, Inc. Medical devices designs and testing              |  |                    | 74,400    |       |   | 2,700                  |  | <0.1 |  
|2,011,765 |  | 5/06-6/06           |  | KKS Venture Management, Inc (Rheologics, Inc.) Study of blood viscosity               |  |                    | 86,100    |       |   | 1,000                  |  | <0.1 |  
|66,667    |  | 9/05-4/06           |  | Quest Minerals & Mining Corporation Coal and mineral mining                           |  |                    | 69,044    |       |   | 800                    |  | <0.1 |  



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|           |  |            |  |                                                                                                                    |  |   |            |  |   |           |  |      |  
|---------- |  | ---------- |  | ------------------------------------------------------------------------------------------------------------------ |  | - | ---------- |  | - | --------- |  | ---- | -
|85,714     |  | 9/05       |  | New Life Scientific, Inc. Pharmaceutical biotechnologies                                                           |  |   | 81,816     |  |   | 600       |  | <0.1 |  
|384,000    |  | 7/06       |  | aeroTelesis, Inc. Satellite
and wireless bandwidth utilization                                                     |  |   | 33,394     |  |   | 600       |  | <0.1 |  
|387,097    |  | 6/06       |  | Tradequest International, Inc. Provider of voice over internet protocol                                            |  |   | 76,092     |  |   | 400       |  | <0.1 |  
|122,449    |  | 1/06       |  | 5G Wireless Communications, Inc. Broadband wireless                                                                |  |   | 78,851     |  |   | 200       |  | <0.1 |  
|232,211    |  | 5/05       |  | Preservation Sciences, Inc. Green technologies and development                                                     |  |   |           |  |   |          |  | 0.0  |  
|140,000    |  | 3/05       |  | AdAl Group, Inc. (5) Aluminum
extruded products manufacturer                                                       |  |   | 72,912     |  |   |          |  | 0.0  |  
|37,500     |  | 6/05       |  | Modern Technology Corporation Technology development and acquisition company                                       |  |   | 82,152     |  |   |          |  | 0.0  |  
|6          |  | 5/06-6/06  |  | EFT BioTech Holdings, Inc. (HumWare Media Corp.) Media advertising                                                 |  |   | 14,236     |  |   |          |  | 0.0  |  
|           |  |            |  | UBA Technology, Inc. Software
development                                                                          |  |   |            |  |   |           |  |      |  
|2,482,521  |  | 2/06-6/06  |  | Common Stock                                                                                                       |  |   | 1,691,419  |  |   |          |  | 0.0  |  
|95,000     |  | 4/06       |  | Series A Convertible Preferred Stock                                                                               |  |   | 1,619,849  |  |   |          |  | 0.0  |  
|7,787,565  |  | 6/05-6/06  |  | 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  |  
|2,500      |  | 3/05       |  | Common Stock                                                                                                       |  |   | 94,500     |  |   |          |  | 0.0  |  
|261,234    |  | 7/04-7/05  |  | eLinear, Inc. (5)                                                                                                  |  |   | 190,763    |  |   |          |  | 0.0  |  
|           |  |            |  |                                                                                                                    |  |   |            |  |   |           |  |      |  
|           |  |            |  | Telecommunication security provider                                                                                |  |   |            |  |   |           |  |      |  
|           |  |            |  |                                                                                                                    |  |   |            |  |   |           |  |      |  
|           |  |            |  | Total Investments in Non-Affiliates                                                                                |  | $ | 31,588,337 |  | $ | 6,705,850 |  | 15.4 | %
|           |  |            |  |                                                                                                                    |  |   |            |  |   |           |  |      |  
|           |  |            |  | Affiliate Investments (2)                                                                                          |  |   |            |  |   |           |  |      |  
|           |  |            |  |                                                                                                                    | 
|           |  |            |  | Material Technologies, Inc. (9) Metal fatigue detection                                                            |  |   |            |  |   |           |  |      |  
|20,550,304 |  | 9/04-6/07  |  | Common Stock                                                                                                       |  | $ | 4,907,329  |  | $ | 4,521,100 |  | 10.4 | %
|47,500     |  | 1/07       |  | Series E Convertible Preferred Stock                                                                               |  |   | 694,640    |  |   | 648,400   |  | 1.5  |  
|           |  |            |  | Cyberlux Corporation (9) LED lighting solutions                                                                    |  |   |            |  |   |           |  |      |  
|148,000    |  | 11/06-1/07 |  | Series C Preferred Stock                                                                                           |  |   | 2,181,640  |  |   | 1,781,000 |  | 4.1  |  
|27,981,484 |  | 6/06-1/07  |  | Common Stock                                                                                                       |  |   | 537,920    |  |   | 559,600   |  | 1.3  |  
|           |  |            |  | Emission & Power Solutions, Inc. (Fuel FX International, Inc.)(privately held) Reductional environmental emissions |  |   |            |  |   |           |  |      |  
|100,000    |  | 1/06       |  | Series B Preferred Stock                                                                                           |  |   | 2,100,000  |  |   | 840,000   |  | 1.9  |  
|9,900,717  |  | 4/05-4/06  |  | Common Stock                                                                                                       |  |   | 1,980,142  |  |   | 752,500   |  | 1.7  |  
|3,620,307  |  | 5/06-9/07  |  | Avalon Oil and Gas, Inc. Oil
and gas producers                                                                     |  |   | 2,854,089  |  |   | 868,900   |  | 2.0  |  
|           |  |            |  | Manakoa Services Corporation(12) Compliance analysis and monitoring                                                |  |   |            |  |   |           |  |      |  
|95,000     |  | 1/07       |  | Series B Preferred Stock                                                                                           |  |   | 2,280,000  |  |   | 760,000   |  | 1.7  |  
|7,799,515  |  | 8/04-4/07  |  | Common Stock                                                                                                       |  |   | 2,122,641  |  |   | 58,500    |  | 0.1  |  
|6,000,000  |  | 7/07       |  | Pathway One Plc(5) (9) Sales
and development licenses                                                              |  |   | 852,300    |  |   | 719,500   |  | 1.6  |  
|49,500,000 |  | 7/07       |  | MachineTalker, Inc. (9) Intelligent wireless security networks                                                     |  |   | 993,000    |  |   | 668,300   |  | 1.5  |  



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|            |  |             |  |                                                                                           |  |   |            |  |   |            |  |      |  
|----------- |  | ----------- |  | ----------------------------------------------------------------------------------------- |  | - | ---------- |  | - | ---------- |  | ---- | -
|1,426,754   |  | 9/07        |  | USTelematics, Inc. (14) Broadband telecommunication for moving vehicles                   |  |   |           |  |   | 510,100    |  | 1.2  |  
|412,000     |  | 9/07        |  | NeoStem, Inc. (9) Stem cell
banking services                                              |  |   | 761,440    |  |   | 441,700    |  | 1.0  |  
|            |  |             |  | CytoDyn, Inc. Development
stage biotechnology company                                     |  |   |            |  |   |            |  |      |  
|2,040,000   |  | 4/06-7/06   |  | Common Stock                                                                              |  |   | 3,640,772  |  |   | 118,300    |  | 0.3  |  
|100,000     |  | 1/07        |  | Series A Preferred Stock                                                                  |  |   | 845,000    |  |   | 260,000    |  | 0.6  |  
|6,909,390   |  | 9/05-6/07   |  | American Soil Technologies,Inc. (9) Fertilizer innovation                                 |  |   | 1,622,606  |  |   | 314,400    |  | 0.7  |  
|4,426,136   |  | 7/06        |  | vidShadow.com, Inc. (DME Interactive Holdings, Inc.) Multi-media entertainment            |  |   | 752,443    |  |   | 199,200    |  | 0.5  |  
|164,495,817 |  | 8/06-4/07   |  | Cargo Connection Logistics Holdings, Inc. World trade logistics                           |  |   | 1,026,031  |  |   | 172,700    |  | 0.4  |  
|7,145,000   |  | 5/06-8/06   |  | NetFabric Holdings, Inc. Information technology services                                  |  |   | 607,034    |  |   | 142,900    |  | 0.3  |  
|461,222,608 |  | 5/05-9/05   |  | GS Energy Corporation (INSEQ Corp.) Waste minimization                                    |  |   | 2,434,783  |  |   | 89,900     |  | 0.2  |  
|5,462       |  | 8/05-8/06   |  | Industrial Biotechnology Corporation (10) Manufactures and markets flavors and fragrances |  |   | 6,351,998  |  |   | 2,000      |  | <0.1 |  
|33,730,000  |  | 4/05-1/06   |  | WebSky, Inc. Broadband
wireless                                                           |  |   | 897,750    |  |   |           |  | 0.0  |  
|4,221,165   |  | 4/01-12/02  |  | Stealth MediaLabs, Inc. (14) Software products                                            |  |   | 1,708,000  |  |   |           |  | 0.0  |  
|            |  |             |  | Liberty Diversified Holdings, Inc. Printing and packaging                                 |  |   |            |  |   |            |  |      |  
|5,346       |  | 7/06-9/06   |  | Common Stock                                                                              |  |   | 1,245,258  |  |   |           |  | 0.0  |  
|63,981      |  | 2/07        |  | Series B Preferred Stock                                                                  |  |   | 382,800    |  |   |           |  | 0.0  |  
|            |  |             |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |             |  | Total Investments in Affiliates                                                           |  | $ | 43,779,616 |  | $ | 14,429,000 |  | 33.0 | %
|            |  |             |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |             |  | Control Investments (3)                                                                   |  |   |            |  |   |            |  |      |  
|            |  |             |  |                                                                                           | 
|1,000       |  | 11/99-11/06 |  | UTEK Real Estate Holdings, Inc. (privately held) Real estate development                  |  | $ | 4,131,574  |  | $ | 3,472,000  |  | 7.9  | %
|16,119,672  |  | 9/05-9/07   |  | World Energy Solutions, Inc. (11) Energy saving technologies                              |  |   | 4,628,449  |  |   | 2,031,100  |  | 4.7  |  
|            |  |             |  | Common Stock                                                                              |  |   |            |  |   |            |  |      |  
|(6)         |  | 1/06-9/07   |  | UTEK Real Estate Holdings, Inc. (privately held) (Demand note, interest rate @ 5%)        |  |   | 1,965,261  |  |   | 1,965,261  |  | 4.5  |  
|15,009,402  |  | 3/06-5/07   |  | Klegg Electronics, Inc.                                                                   |  |   | 6,506,174  |  |   | 300,200    |  | 0.7  |  
|            |  |             |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |             |  | Manufacturer/distributor for retail electronic products                                   |  |   |            |  |   |            |  |      |  
|            |  |             |  | Total Investments in Control Investments                                                  |  | $ | 17,231,458 |  | $ | 7,768,561  |  | 17.8 | %
|            |  |             |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |             |  |                                                                                           | 
|            |  |             |  | U.S. Treasuries and Certificates of Deposit (4)                                           |  |   |            |  |   |            |  |      |  
|            |  |             |  | U.S. Treasuries:                                                                          |  |   |            |  |   |            |  |      |  
|500,000     |  | 11/07       |  | United States Treasury Bill, maturity 2/07/08, interest rate @ 3.06%                      |  | $ | 498,550    |  | $ | 498,550    |  | 1.1  | %
|            |  |             |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |             |  | Total U.S. Treasuries                                                                     |  | $ | 498,550    |  | $ | 498,550    |  | 1.1  | %
|            |  |             |  |                                                                                           |  |   |            |  |   |            |  |      |  
|            |  |             |  | Certificates of Deposit:                                                                  |  |   |            |  |   |            |  |      |  
|            |  |             |  |                                                                                           | 
|100,000     |  | 8/07        |  | State Bank India CD, maturity 2/22/08, interest rate @ 5.15%                              |  | $ | 99,983     |  | $ | 99,983     |  | 0.2  | %
|100,000     |  | 8/07        |  | Indymac Bank FSB CD, maturity 2/25/08, interest rate @ 5.2%                               |  |   | 100,004    |  |   | 100,004    |  | 0.2  |  



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|        |  |      |  |                                                                      |  |   |            |  |   |            |  |       |  
|------- |  | ---- |  | -------------------------------------------------------------------- |  | - | ---------- |  | - | ---------- |  | ----- | -
|100,000 |  | 8/07 |  | First Natl Bank Arizona CD, maturity 2/27/08, interest rate @ 5.15% |  |   | 99,982     |  |   | 99,982     |  | 0.2   |  
|100,000 |  | 8/07 |  | Charter Bank West CD, maturity 2/29/08, interest rate @ 5.1%         |  |   | 99,975     |  |   | 99,975     |  | 0.2   |  
|100,000 |  | 8/07 |  | Discover Bank CD, maturity 2/29/08, interest rate @ 5.15%            |  |   | 99,982     |  |   | 99,982     |  | 0.2   |  
|100,000 |  | 8/07 |  | Lehman Coml Bank CD, maturity 2/29/08, interest rate @ 5.15%         |  |   | 99,982     |  |   | 99,982     |  | 0.2   |  
|100,000 |  | 8/07 |  | Sterling Savings Bank CD, maturity 3/24/08, interest rate @ 5.1%     |  |   | 99,966     |  |   | 99,966     |  | 0.2   |  
|100,000 |  | 8/07 |  | Capmark Bank CD, maturity 5/22/08, interest rate @ 5.15%             |  |   | 99,986     |  |   | 99,986     |  | 0.2   |  
|100,000 |  | 8/07 |  | Firstcity Bank CD, maturity 5/22/08, interest rate @ 5.1%            |  |   | 99,967     |  |   | 99,967     |  | 0.2   |  
|100,000 |  | 8/07 |  | Provident Bank CD, maturity 5/27/08, interest rate @ 5.1%            |  |   | 99,969     |  |   | 99,969     |  | 0.2   |  
|        |  |      |  |                                                                      |  |   |            |  |   |            |  |       |  
|        |  |      |  | Total Certificates of Deposit                                        |  | $ | 999,796    |  | $ | 999,796    |  | 2.3   | %
|        |  |      |  |                                                                      |  |   |            |  |   |            |  |       |  
|        |  |      |  | Total Investments in U.S. Treasuries and CDs                         |  | $ | 1,498,346  |  | $ | 1,498,346  |  | 3.4   | %
|        |  |      |  |                                                                      |  |   |            |  |   |            |  |       |  
|        |  |      |  | TOTAL INVESTMENTS                                                    |  | $ | 94,097,757 |  | $ | 30,401,757 |  | 69.6  | %
|        |  |      |  |                                                                      |  |   |            |  |   |            |  |       |  
|        |  |      |  | Cash and other assets, less liabilities                              |  |   |            |  |   | 13,272,791 |  | 30.4  | %
|        |  |      |  |                                                                      |  |   |            |  |   |            |  |       |  
|        |  |      |  | Net assets at December 31, 2007                                      |  |   |            |  | $ | 43,674,548 |  | 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 and a demand note issued by UTEK Real Estate Holdings, Inc., 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 Notes to the Consolidated Financial Statements.)
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | As of December 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 or where the Company holds one or more seats on such companys board of directors. 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.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(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) | Investment consists of warrants to purchase 1,500,000 shares of Synthetic Blood International, Inc. common stock.
|--- | -----------------------------------------------------------------------------------------------------------------

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

|(9) | During the period ended December 31, 2007, the Company reclassified this investment from Non-affiliate investments to Affiliate investments based on the criteria in notes
(1) and (2).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | During the period ended December 31, 2007, the Company reclassified this investment from Control investments to Affiliate investments based on the criteria in notes
(2) and (3).
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | During the period ended December 31, 2007, the Company reclassified this investment from Affiliate investments to Control investments based on the criteria in notes
(2) and (3).
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Advanced Medical Isotope Corporation and Manakoa Services Company are related through common management.
|---- | --------------------------------------------------------------------------------------------------------

|(13) | Xethanol Corporation and Metamorphix Global are related through common management.
|---- | ----------------------------------------------------------------------------------

|(14) | Stealth MediaLabs, Inc. and USTelematics, Inc. are related through common management.
|---- | -------------------------------------------------------------------------------------

See accompanying notes



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UTEK Corporation

Notes to Consolidated Financial Statements

Three and Nine Months Ended
September 30, 2008 and 2007

(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 September 30, 2008 and 2007 and for the
three and nine 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 notes 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, 2007. Operating results for the three and nine months ended September 30, 2008 are not necessarily
indicative of the results that may be expected for the entire year.

The Company

The Company provides services that enable clients to utilize externally developed technologies and create value from their intellectual property. The Company has built a large subscription-based database of
intellectual properties available for immediate license, which when combined with its global network of universities, research laboratories and companies, provides clients with access to external technologies. In addition, the Company offers a
comprehensive suite of services for businesses seeking to accelerate growth and reduce costs through the development of enhanced innovation capabilities. The Company also provides foresight as to the direction of customer and industry trends so
clients businesses can evolve accordingly.

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).

Innovation Consulting

The Company provides strategic innovation consulting services to clients to help them become more efficient innovators. The process involves our
clients working with a handful of seasoned and experienced professionals capable of unlocking an organization's capacity for strategy and innovation.

Technology Transfers

To effectuate a technology transfer, we will typically create a newly formed company to acquire a new technology from
a university, medical center, corporation or federal research laboratory and then sell this newly formed company to our client for securities or cash. 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 transfers through our innovation 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 innovation process without the prior agreement of our client to subsequently acquire such new technology from us.

Subscription and Other Services

Technology
Acquisition Alliance

The Companys technology acquisition alliance agreements are designed to help our customers enhance their new product pipeline
through the acquisition of proprietary technologies primarily from universities, medical centers, corporations and federal research laboratories. The Company may receive cash or unregistered shares of common stock from companies as payment for the
services we provide. Technology transfers are completed according to the terms set forth in these agreements with our client companies.



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Patent Analytic Services

UTEK Intellectual Capital Consulting, a division of the Company, uses a team of on-call scientists and industry experts to provide technical and business knowledge to help our clients identify, assess, protect and leverage their
intellectual property assets (IP). This division helps clients identify the strengths and weaknesses of corporate IP and competitors IP. This division also identifies gaps in competitors IP portfolios that reveal
opportunities to pursue for our clients.

Online Exchanges and Databases

UTEK Information Services is a division that operates a group of subscription-based websites.



| |  |  | Pharma Transfer 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 is an online searchable database for life science discoveries.
| | - |  | ---------------------------------------------------------------------



| |  |  | Knowledge Express is a searchable database of valuable information for licensing professionals, 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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Pharmalicensing is a biopharmaceutical innovation resource designed for professionals involved with partnering, licensing and business development worldwide.
Pharmalicensing affords clients the ability to in-license and out-license intellectual property and also provides partnering services, business development reports, industry news and a jobs source for candidates and employers.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | TekScout enables companies to outsource unfinished research and development (R&D) projects to scientists from around the world. TekScout
provides a platform for companies to supplement internal R&D and resources to accelerate product development.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Principles of
Consolidation

UTEK Corporation commenced operations in 1997, 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), UTEKip, Ltd. (Israel) and Innovaro, Ltd. All
intercompany transactions and balances are eliminated in consolidation.

Portfolio investments are held for the purpose of deriving investment income and
future capital gains. The financial results of the Companys portfolio companies are not consolidated in the Companys financial statements.

Reclassifications

Certain reclassifications have been made to the nine months ended September 30, 2008 balances and the three and nine
months ended September 30, 2007 balances to conform to the three months ended September 30, 2008 financial statement presentation.

Business
Combinations

We determine and allocate the purchase price of an acquired company to the tangible and intangible assets acquired and liabilities assumed
as of the business combination date in accordance with Financial Accounting Standards Board (FASB) Statement No. 141, Business Combinations. The purchase price allocation process requires us to use significant estimates and assumptions,
including fair value estimates, as of the business combination date.

While we use our best estimates and assumptions as a part of the purchase price
allocation process to accurately value assets acquired and liabilities assumed at the business combination date, our estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the purchase price allocation
period, which is generally one year from the business combination date, we record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, there are contingencies based on earnings included
in some of our purchase agreements. The earnout is recorded as it is earned over the contingency period, which is generally one to three years from the business combination date. With the exception of unresolved income tax matters or the earnout of
contingent consideration, subsequent to the purchase price allocation period any adjustment to assets acquired or liabilities assumed is included in our operating results in the period in which the adjustment is determined.



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Goodwill Impairment

The Company determined that 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 2007.
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 nine months ended September 30, 2007. There were no indicators during the nine months
ended September 30, 2008 that required any impairment to goodwill.

Revenue Recognition

Innovation Consulting Services

The Company recognizes certain
strategic consulting revenues in accordance with Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts. Accordingly, revenues on fixed fee contracts are recognized under the
percentage-of-completion methods of accounting, whereby contract revenues are recognized on a pro rata basis based upon costs incurred to date compared to total estimated contract costs. In cases where losses are estimated to be incurred upon
completion of contracts, the full provision for such losses is charged to operations when they become known. In addition, some of the Companys contracts provide for substantial contingent fees if future performance milestones are successfully
met. Contingent fees are recorded based on the Companys estimate of the likelihood of reaching future performance milestones.

Certain other
consulting revenues are billed on an hourly basis and recognized as incurred.

Sale of Technology Rights

The Company recognizes revenue from the sale of technology rights upon the exchange of the securities of our newly formed companies for securities in the portfolio
company that acquires such newly formed company and the technology held by such newly formed company. The Company records revenue based on the fair value of the consideration received. In most cases, the consideration received for the rights is
unregistered shares of common or preferred stock of the portfolio company.

Subscription and Other Services

Revenue from the sale of subscriptions to the Companys websites generally is received in the form of cash and initially is deferred and subsequently recognized
ratably over the term of the subscription, which is typically one year.

Technology acquisition alliance services are performed pursuant to service
agreements in which UTEK provides consulting services by identifying and evaluating technology acquisition opportunities in exchange for unregistered shares of the portfolio company or cash. These agreements are typically cancelable with thirty days
notice.

Revenue from technology acquisition alliance agreements in which unregistered shares of common stock are received before they are earned are
deferred and recognized over the term of each agreement. For technology acquisition alliance agreements in which the stock is received ratably over the agreement, revenue is recognized as earned. The common stock received as payment is recorded as
income based on the fair value of the consideration received. At September 30, 2008, the Company did not have any technology acquisition alliance agreements for which payment was to be received in stock.

Income Taxes

During the third quarter of 2008, management
determined that it was more likely than not that net operating loss carryforwards in UTEK would not be utilized in the future and, accordingly, a valuation allowance of $9.3 million was recorded against the related deferred tax asset. A portion
of the valuation allowance ($4.5 million) was recorded as part of the provision for income tax expense and a similar portion ($4.8 million) is included in the change in unrealized depreciation of investments. The valuation allowance resulted in
a significant additional decrease to our net decrease in net assets from operations and per share values.

Net realized losses on investments in the
accompanying consolidated statements of operations are net of income tax benefits of $(166,102) and $(2,263,822) for the three and nine months ended September 30, 2008, respectively, and $(333,016) and $(1,019,780) for the three and nine months
ended September 30, 2007, respectively. Change in unrealized appreciation (depreciation) of investments in the accompanying consolidated statements of operations are net of deferred tax expense (benefit) of $(1,048,012) and $(3,490,087) for the
three and nine months ended September 30, 2008, respectively, and $138,616 and $(4,098,150) for the three and nine months ended September 30, 2007, respectively. In addition, a portion of the aforementioned valuation allowance of ($4.8
million) was included in the change in unrealized depreciation for the three and nine months ended September 30, 2008.

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 outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. The Companys
dilutive potential common shares consist of outstanding stock options.



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



|                                                    |  |                    |  |                   |  |           |  |          
|--------------------------------------------------- |  | ------------------ |  | ----------------- |  | --------- |  | ---------
|                                                    |  | Three Months Ended |  | Nine Months Ended
|                                                    |  | 2008               |  | 2007              |  | 2008      |  | 2007     
|Weighted-average outstanding shares of common stock |  | 10,176,742         |  | 9,009,776         |  | 9,653,725 |  | 8,982,339
|Dilutive effect of stock options                    |  |                   |  |                  |  |          |  |         
|                                                    |  |                    |  |                   |  |           |  |          
|Common stock and common stock equivalents           |  | 10,176,742         |  | 9,009,776         |  | 9,653,725 |  | 8,982,339
|Shares excluded from calculation of diluted EPS (1) |  | 829,650            |  | 569,525           |  | 829,650   |  | 569,525  
|                                                    |  |                    |  |                   |  |           |  |          



|(1) | These shares attributable to outstanding stock options were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive, primarily as a result
of the net decrease in net assets from operations during the period.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial Instruments and Concentrations of Credit Risk

The Companys financial instruments consist of investments, U.S. Treasuries and certificates of deposit, cash and cash equivalents, accounts
receivable, accounts payable and accrued expenses. The fair value of trade accounts receivable and payable and certain accrued expenses approximate their carrying amounts in the financial statements due to the short maturity of such instruments. The
fair value of U.S. Treasuries and certificates of deposit is recorded based upon their market value. The fair value of all other investments is determined by the Board of Directors as further discussed in Note 3.

Financial instruments with significant credit risk include investments and cash and cash equivalents. The Company invests its cash and cash equivalents and its U.S.
Treasuries and certificates of deposit with high credit quality financial institutions. Certain cash and cash equivalents were in excess of FDIC insurance limits at September 30, 2008. The Company has not experienced any losses on such
accounts.

The Company had five major customers during the three months ended September 30 2008, four major customers during the nine months ended
September 30, 2008, two major customers during the three months ended September 30, 2007 and four major customers during the nine months ended September 30, 2007. Major customers, those generating greater than 10% of total income from
operations, accounted for approximately 80% and 75% of the Companys sales during the three months ended September 30, 2008 and 2007, respectively. Major customers accounted for approximately 66% and 59% of the Companys sales during
the nine months ended September 30, 2008 and 2007, respectively. Major customers accounted for approximately 55% of accounts receivable at September 30, 2008.

The Companys most significant portfolio investments at September 30, 2008 were in UTEK Real Estate Holdings, Inc., Advanced Medical Isotope Corporation, World Energy Solutions, Inc., MiMedx Group, Inc. and
Cyberlux Corporation. These five investments totaled $10.8 million in fair value and represented 75% of our investments excluding our investments in U.S. Treasuries and certificates of deposits and 28% of net assets at September 30, 2008.

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 could affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates relate to the fair value of the
investments and the purchase price allocation process for business combinations. Actual results could differ from those estimates.

Recent Accounting
Pronouncements

Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair
Value Measurementsas it relates to financial assets and liabilities recognized or disclosed on a recurring basis. The effective date of this Statement for non-financial assets and liabilities that are not recognized or disclosed on a recurring
basis has been delayed to fiscal years beginning after November 15, 2008. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands
disclosures about fair value measurements. The adoption of the effective portion of SFAS No. 157 expanded the Companys disclosures regarding the fair value measurements of its investments.

Effective January 1, 2008, the Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilitiesincluding an
amendment of FASB Statement No. 115. SFAS No. 159 expands the use of fair value measurement by permitting entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be
measured at fair value. The Companys most significant financial instruments are its investments, which are currently carried at fair value. The Company has not adopted the fair value provisions of SFAS No. 159 for any of its other
financial assets or liabilities, and therefore, there is no effect on our results of operations or financial position.



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In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities. SFAS No. 161 requires additional disclosures related to the use of derivative instruments, the accounting for derivatives and the financial statement impact of derivatives. SFAS No. 161 is effective for fiscal years
beginning after November 15, 2008. The adoption of SFAS No. 161 will not impact the Companys consolidated financial statements.

In
April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008 and early adoption is
prohibited. The adoption of this statement is not expected to have a material effect on the Companys financial statements.

In May 2008, the FASB
issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of
financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SECs approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The adoption of this statement is not expected to have a material effect on the Companys
financial statements.

2. Stock-Based Compensation

The
Company had two stock-based equity compensation plans at September 30, 2008. See Note 8 of our consolidated financial statements included in the Companys Form 10-K for the year ended December 31, 2007. In June 2008, the
Companys stockholders approved an amendment to the Companys Amended and Restated Employee Stock Option Plan to increase the number of shares of common stock authorized for issuance under the Plan by 600,000 options.

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% stockholder, 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 to seven years from the date of grant. During the three and nine months
ended September 30, 2008, respectively, we granted 88,500 and 312,500 options to purchase shares of common stock. During the three and nine months ended September 30, 2007, respectively, we granted 22,500 and 204,500 options to purchase
shares of common stock. At September 30, 2008, there were 2,300,000 shares authorized for issuance and the Company had 840,563 shares available for future stock option grants under existing plans.

The Company accounts for stock option grants in accordance with the provisions of SFAS No. 123(R), Share-Based Payment. Under the modified prospective
approach of SFAS 123(R), compensation cost recognized during the nine months ended September 30, 2008 and 2007 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).

The Company recorded approximately $202,000 and $167,000 for the three months ended September 30, 2008 and 2007,
respectively, and $560,000 and $443,000 for the nine months ended September 30, 2008 and 2007, respectively, in compensation expense related to share-based payments pursuant to SFAS 123(R). Stock-based compensation expense is included in
salaries and wages in the accompanying consolidated statements of operations.

The Company uses 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 stock-based compensation expense for the three and nine months ended September 30, 2008 and 2007 were determined 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  2008: based on the Companys historical life of options exercised; 2007: 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.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The weighted-average input assumptions used and resulting fair values were as follows during the nine months ended
September 30, 2008 and 2007.



|                        |  |      |            |   |      |   |            |  
|----------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                        |  | 2008 |            |   | 2007 |  
|Expected dividend yield |  |      | 0          | % |      |   | 0.25       | %
|Expected volatility     |  |      | 35.17      | % |      |   | 37.64      | %
|Risk-free interest rate |  |      | 2.71       | % |      |   | 4.46       | %
|Expected life           |  |      | 4.00 years |   |      |   | 3.79 years |  
|Grant date fair value   |  | $    | 3.29       |   |      | $ | 4.58       |  

Net cash proceeds from the exercise of stock options were approximately $190,000 and $523,000 for the nine months
ended September 30, 2008 and 2007, respectively. At September 30, 2008, there was approximately $2,057,000 of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted-average period
of 3.0 years.

The following table represents stock option activity as of and for the nine months ended September 30, 2008:



|                                             |  |                 |   |  |                              |       |                                         |            |                         |   |        
|-------------------------------------------- |  | --------------- | - |  | ---------------------------- | ----- | --------------------------------------- | ---------- | ----------------------- | - | -------
|                                             |  | Numberof Shares |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualLife |            | AggregateIntrinsicValue
|Options Outstanding - January 1, 2008        |  | 652,025         |   |  | $                            | 14.08 |                                         | 3.25 years |                         | $ | 451,000
|Granted                                      |  | 312,500         |   |  | $                            | 10.45 |                                         |            |                         |   |        
|Exercised                                    |  | (31,015         | ) |  | $                            | 6.12  |                                         |            |                         | $ | 129,000
|Forfeited/expired/cancelled                  |  | (103,860        | ) |  | $                            | 12.98 |                                         |            |                         |   |        
|                                             |  |                 |   |  |                              |       |                                         |            |                         |   |        
|Options Outstanding - September 30, 2008     |  | 829,650         |   |  | $                            | 13.15 |                                         | 4.20 years |                         | $ |       
|                                             |  |                 |   |  |                              |       |                                         |            |                         |   |        
|Outstanding Exercisable - September 30, 2008 |  | 240,900         |   |  | $                            | 15.16 |                                         | 2.00 years |                         | $ |       
|                                             |  |                 |   |  |                              |       |                                         |            |                         |   |        

The total grant date fair value of options vested during the nine months ended September 30, 2008 and 2007
was $352,000 and $283,000, 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 utilized valuation appraisals provided by an independent valuation service provider for each equity stake in our portfolio. 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 or the OTC Bulletin Board.

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

Without a readily 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
September 30, 2008 and December 31, 2007 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.



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Shares of stock received by portfolio companies in exchange for both strategic alliance services and technology transfer
transactions are recorded at fair value on the day that the transactions are executed. The fair value of such shares is recorded as revenue in our statements of operations and as the cost of such shares in our statements of assets and liabilities.
The certificates are received subsequent to the transaction date.

The Company values substantially all of its investments at fair value as determined in
good faith by the Board of Directors in accordance with the Companys valuation policy and the provisions of the Investment Company Act of 1940 and SFAS No. 157. SFAS No. 157 establishes a fair value hierarchy that encourages and is
based on the use of observable inputs, but allows for unobservable inputs when observable inputs do not exist. Inputs are classified into one of three categories:



| |  |  | Level 1Quoted prices (unadjusted) in active markets for identical assets
| | - |  | -------------------------------------------------------------------------



| |  |  | Level 2Inputs other than quoted prices that are observable to the market participant for the asset or quoted prices in a market that is not active
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3Unobservable inputs
| | - |  | ---------------------------

When there are
multiple inputs for determining the fair value of an investment, the Company classifies the investment in total based on the lowest level input that is significant to the fair value measurement.

Assets measured at fair value on a recurring basis by level within the fair value hierarchy at September 30, 2008, were as follows:



|            |  |                      |            |                                                             |   |                                            |  |                                         |            |  |   |  
|----------- |  | -------------------- | ---------- | ----------------------------------------------------------- | - | ------------------------------------------ |  | --------------------------------------- | ---------- |  | - | -
|            |  |                      |            | Fair Value Measurements at Reporting Date Using            
|Description |  | Fair Value at9/30/08 |            | Quoted Prices inActive Marketsfor IdenticalAssets (Level 1) |   | SignificantOtherObservableInputs (Level 2) |  | SignificantUnobservableInputs (Level 3)
|Investments |  | $                    | 17,633,520 |                                                             | $ |                                           |  | $                                       | 17,633,520 |  | $ | 

In May 2008, the Company received repayment of its entire loan receivable held with certain subsidiaries of UTEK
Real Estate Holdings, Inc. This loan receivable was previously included in the Companys investment portfolio at December 31, 2007. This repayment resulted in additional cash inflows of $2 million during the nine months ended
September 30, 2008.

Technology Transfers

All of
our technology transfers are generally completed as set forth in our technology acquisition alliance service agreements with our clients. During the nine months ended September 30, 2008, the Company completed the following seven technology
transfers:



|             |  |                                                    |  |                                          |  |                                            |                   |     |                    |   |       
|------------ |  | -------------------------------------------------- |  | ---------------------------------------- |  | ------------------------------------------ | ----------------- | --- | ------------------ | - | ------
|Date         |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                     |  | Consideration Unregistered Shares orCash* |                   |     | Price perShare (1)
|January 28   |  | RIM Semiconductor Company                          |  | Broadband Distance Systems, Inc.         |  |                                            | 60,000,000        |     |                    | $ | 0.015 
|February 25  |  | Artilium Plc                                       |  |                                          |  | $                                          | 125,000 cash      | (2) |                    |   |       
|March 24     |  | RIM Semiconductor Company                          |  | Multi-Carrier Communications, Inc.       |  |                                            | 150,000,000       |     |                    |   | 0.006 
|March 31     |  | Platina Energy Group Inc.                          |  | Enhanced Oil Recovery Technologies, Inc. |  |                                            | 92,000 preferred  | (3) |                    |   | 8.640 
|June 10      |  | World Energy Solutions, Inc.                       |  | Advanced Alternative Energy, Inc.        |  |                                            | 100,000 preferred | (4) |                    |   | 8.7500
|June 26      |  | CSMG Technologies, Inc.                            |  | Carbon Capture Technologies, Inc.        |  |                                            | 371,020           |     |                    |   | .936  
|September 26 |  | World Energy Solutions, Inc.                       |  | H-Hybrid Technologies, Inc.              |  |                                            | 100,000 preferred | (5) |                    |   | 7.50  



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

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

|(2) | Represents a technology transfer assistance fee we received for assisting Artilium Plc with an acquisition.
|--- | -----------------------------------------------------------------------------------------------------------

|(3) | Preferred F shares convertible into common shares based on a value of $1,324,800.
|--- | ---------------------------------------------------------------------------------

|(4) | Preferred B shares convertible into common shares based on a value of $3,500,000.
|--- | ---------------------------------------------------------------------------------

|(5) | Preferred B shares convertible into common shares based on a value of $3,750,000.
|--- | ---------------------------------------------------------------------------------



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During the nine months ended September 30, 2007, the Company completed the following fourteen technology transfers:



|             |  |                                                   |  |                                               |  |                                            |                                   |     |                    |   |            
|------------ |  | ------------------------------------------------- |  | --------------------------------------------- |  | ------------------------------------------ | --------------------------------- | --- | ------------------ | - | -----------
|Date         |  | Name of Company Acquiring the NewlyFormed Company |  | Newly Formed Company                          |  | Consideration Unregistered Shares orCash* |                                   |     | Price perShare (1)
|January 4    |  | Manakoa Services Corporation                      |  | Infinite Identification Technologies, Inc.    |  |                                            | 95,000 preferred                  | (2) |                    | $ | 24.000     
|January 11   |  | Cyberlux Corporation                              |  | Hybrid Lighting Technologies, Inc.            |  |                                            | 50,000 preferred26,500,000 common | (3) |                    |   | 11.5300.020
|January 30   |  | CytoDyn, Inc.                                     |  | Advanced Genetic Technologies, Inc.           |  |                                            | 100,000 preferred                 | (4) |                    |   | 8.450      
|January 31   |  | Material Technologies, Inc.                       |  | Stress Analysis Technologies, Inc.            |  |                                            | 47,500 preferred                  | (5) |                    |   | 14.620     
|February 12  |  | Liberty Diversified Holdings, Inc.                |  | Sero Tonin Solutions, Inc.                    |  |                                            | 63,981 preferred                  | (6) |                    |   | 6.000      
|March 12     |  | Metamorphix Global, Inc.                          |  | Flex Crete Technologies, Inc.                 |  | $                                          | 200,000 cash                      |     |                    |   |           
|March 12     |  | Klegg Electronics, Inc.                           |  | Tempo Control Technologies, Inc.              |  |                                            | 10,901,250                        |     |                    |   | 0.040      
|March 28     |  | Avalon Oil & Gas, Inc.                            |  | Leak Location Technologies, Inc.              |  |                                            | 34,875,000                        |     |                    |   | 0.020      
|April 30     |  | Material Technologies, Inc.                       |  | Damage Assessment Technologies, Inc.          |  |                                            | 7,125,000                         |     |                    |   | 0.215      
|May 30       |  | Klegg Electronics, Inc.                           |  | Klegg Network Storage Technologies, Inc.      |  |                                            | 8,550,000                         |     |                    |   | 0.255      
|June 28      |  | Material Technologies, Inc.                       |  | Non-Destructive Assessment Technologies, Inc. |  |                                            | 6,412,500                         |     |                    |   | 0.240      
|July 12      |  | Pathway One Plc                                   |  | WebMed Technologies, Inc.                     |  |                                            | 6,000,000                         |     |                    |   | 0.14       
|July 20      |  | MachineTalker, Inc.                               |  | Wideband Detection Technologies, Inc.         |  |                                            | 3,000,000                         |     |                    |   | 0.05       
|September 28 |  | World Energy Solutions, Inc.                      |  | Hydrogen Safe Technologies, Inc.              |  |                                            | 7,500,000                         |     |                    |   | 0.26       



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

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

4. Acquisitions

Strategos

On
April 17, 2008, UTEK purchased all of the shares of Carmi, Inc., a 100% owned subsidiary of Strategos, LLC, wherein Carmi, Inc. became a subsidiary of UTEK. Carmi, Inc. was dissolved and is now an operating unit of UTEK and is doing business as
and is referred to as Strategos throughout this Form 10-Q. We acquired Strategos primarily to expand our strategic innovation consulting services. We have included the financial results of Strategos from the date of acquisition in our
consolidated financial statements as of September 30, 2008.

Preliminary Purchase Price

Strategos was acquired for potentially 1,248,960 shares of UTEK unregistered common stock valued at $15 million as of such date. Under the terms of the acquisition
agreement, Strategos stockholders were entitled to 502,970 shares of UTEK unregistered common stock valued at approximately $6,041,000 as of the acquisition date. In addition, Strategos stockholders are eligible to receive an additional 745,990
shares of UTEK unregistered common stock, which are being held in escrow, pursuant to meeting specific revenue targets for 2008 and 2009 (contingency shares). The Company recorded a contingent liability of approximately $1,952,000 with
respect to the contingency shares, which reflected the amount of the fair value of the assets acquired in excess of the cost. When the contingency is resolved and the consideration is issued or becomes issuable, any excess of the fair value of the
contingent consideration issued or issuable over the amount that was recognized as if it was a liability will be recognized as an additional cost of the acquisition. As of September 30, 2008, 329,670 contingency shares, with a value of
approximately $3,959,000, were issued and earned and were recognized as an additional cost of the acquisition. This also resulted in a reduction of the contingent liability balance to zero.



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Preliminary Purchase Price Allocation

Pursuant to our business combinations accounting policy, the total purchase price for Strategos was allocated to the net tangible assets and intangible assets acquired based upon their estimated fair values as of
April 17, 2008, as set forth below. The excess of the net tangible assets and intangible assets acquired over the purchase price resulted in a contingent liability. The preliminary allocation of the purchase price was based upon the preliminary
purchase price, which is subject to change based on the earnout of the contingency shares through December 2009. Our preliminary purchase price allocation as of September 30, 2008 is as follows:



|                                       |  |   |            |  
|-------------------------------------- |  | - | ---------- | -
|Cash and cash equivalents              |  | $ | 678,980    |  
|Accounts receivable                    |  |   | 2,189,305  |  
|Other tangible assets                  |  |   | 91,098     |  
|Intangible assets                      |  |   | 6,380,000  |  
|Goodwill                               |  |   | 4,406,996  |  
|Accounts payable and other liabilities |  |   | (1,262,512 | )
|Deferred revenues                      |  |   | (83,861    | )
|Deferred tax liability                 |  |   | (2,400,000 | )
|                                       |  |   |            |  
|Total preliminary purchase price       |  | $ | 10,000,006 |  
|                                       |  |   |            |  

Intangible Assets

The following table sets forth the preliminary components of intangible assets associated with the Strategos acquisition:



|                                 |  |                       |           |             |           
|-------------------------------- |  | --------------------- | --------- | ----------- | ----------
|                                 |  | PreliminaryFair Value |           | Useful Life
|Trade names/trademarks/websites  |  | $                     | 1,620,000 |             | Indefinite
|Proprietary processes/know-how   |  |                       | 1,970,000 |             | 6 years   
|DiscoverySpace software platform |  |                       | 120,000   |             | 8 years   
|Non-compete agreements           |  |                       | 240,000   |             | 4 years   
|Customer list                    |  |                       | 2,430,000 |             | 7 years   
|                                 |  |                       |           |             |           
|Total intangible assets          |  | $                     | 6,380,000 |             |           
|                                 |  |                       |           |             |           

Other 2008 Acquisitions

On December 20, 2007, the Company entered into a stock purchase agreement with Partnering Intelligence Limited and Bridgehead International Limited to acquire Pharmalicensing Limited
(Pharmalicensing). The transaction closed and became effective on January 3, 2008, at which time the Company issued 153,967 shares of unregistered UTEK common stock, valued at $2,150,000, to Partnering Intelligence in consideration
for all of the shares of Pharmalicensing owned by Partnering Intelligence. The value of the shares was based on the average ten-day closing price prior to execution of the stock purchase agreement. The shares acquired represent 100% of the issued
and outstanding shares of Pharmalicensing. The Company acquired the shares of Pharmalicensing through its subsidiary UTEK Europe, Ltd. Transfer of the 153,967 shares of UTEK common stock is restricted for twelve months following the completion of
the transaction.

On July 3, 2008, the Company entered into a stock purchase agreement to acquire 100% of Innovaro Limited (Innovaro), a
company incorporated in the United Kingdom and Wales. Innovaro was acquired for potentially 691,714 shares of UTEK unregistered common stock valued at $7.4 million as of such date. The number of shares is based on the average twenty-day closing
price prior to execution of the stock purchase agreement. Under the terms of the agreement, Innovaro stockholders received one half, or 345,857, of the UTEK shares worth $3.7 million at closing. Transfer of the 345,857 UTEK unregistered shares is
restricted for at least 12 months following the close of the transaction. The remaining UTEK shares are held in escrow, to be released in three installments, 12, 24 and 36 months after closing. Delivery of the escrowed shares to Innovaro is
dependent on the achievement of specific revenue targets for the three years following the closing. If such targets are not met, a portion of the escrowed shares will be returned to UTEK. The cost of these contingent shares will be accounted for as
an additional element of the purchase price when and if the shares are earned.

A summary of these acquisitions are as follows:



|                                               |  |                 |           |   |          |   |            |  
|---------------------------------------------- |  | --------------- | --------- | - | -------- | - | ---------- | -
|                                               |  | Pharmalicensing |           |   | Innovaro |  
|Tangible assets acquired                       |  | $               | 149,168   |   |          | $ | 365,953    |  
|Intangible assets acquired                     |  |                 | 858,386   |   |          |   | 3,003,488  |  
|Goodwill acquired                              |  |                 | 1,526,643 |   |          |   | 1,575,872  |  
|Foreign currency translation adjustment        |  |                 |          |   |          |   | (52,875    | )
|Accounts payable and other liabilities assumed |  |                 | (384,197  | ) |          |   | (1,228,125 | )
|                                               |  |                 |           |   |          |   |            |  
|Total preliminary purchase price               |  | $               | 2,150,000 |   |          | $ | 3,664,313  |  
|                                               |  |                 |           |   |          |   |            |  



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We have included the financial results of Pharmalicensing and Innovaro from their respective dates of acquisition in our
consolidated financial statements as of September 30, 2008.

Unaudited Pro Forma Financial Information

The unaudited financial information in the table below summarizes the combined results of operations of Strategos, Innovaro and Pharmalicensing acquired during fiscal
2008, on a pro forma basis, as though the companies had been combined as of the beginning of fiscal 2007. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would
have been achieved if the acquisitions had taken place at the beginning of each of the periods presented. The pro forma financial information for all periods presented also includes the business combination accounting effects on the historical
companies operating results including the depreciation and amortization expenses from acquired fixed assets and intangible assets, respectively, and related tax effects as though the companies had been combined as of the beginning of fiscal
2007.

The unaudited pro forma financial information for the nine months ended September 30, 2008 combines the historical results of UTEK for the nine
months ended September 30, 2008 and the historical results of Strategos, Innovaro and Pharmalicensing for the nine months ended September 30, 2008, and the pro forma adjustments discussed above. The unaudited pro forma financial
information for the nine months ended September 30, 2007 combines the historical results of UTEK for the nine months ended September 30, 2007 and the historical results of Strategos, Innovaro and Pharmalicensing for the nine months ended
September 30, 2007, and the pro forma adjustments discussed above.



|                                                                       |  |                            |             |   |      |   |            |  
|---------------------------------------------------------------------- |  | -------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                                       |  | Nine Months Ended Sept 30, |            
|                                                                       |  | 2008                       |             |   | 2007 |  
|Total income from operations                                           |  | $                          | 19,179,757  |   |      | $ | 27,765,708 |  
|Net decrease in net assets from operations                             |  | $                          | (20,152,741 | ) |      | $ | (4,265,442 | )
|Basic and diluted net decrease in net assets from operations per share |  | $                          | (2.00       | ) |      | $ | (0.43      | )

5. Intangible Assets and Goodwill

The changes in intangible assets for the nine months ended September 30, 2008 were as follows:



|                                |  |                      |          |   |           |   |            |                       |  |   |                            |   |  |           |  
|------------------------------- |  | -------------------- | -------- | - | --------- | - | ---------- | --------------------- |  | - | -------------------------- | - |  | --------- | -
|                                |  | BalancesDec 31, 2007 |          |   | Additions |   |            | BalancesSept 30, 2008 |  |   | WeightedAverageUseful life |  
|Trade names/trademarks/websites |  | $                    | 293,095  |   |           | $ | 2,817,251  |                       |  | $ | 3,110,346                  |   |  | (1        | )
|Proprietary processes/know-how  |  |                      |         |   |           |   | 2,901,775  |                       |  |   | 2,901,775                  |   |  | 6.0 years |  
|Software platform               |  |                      |         |   |           |   | 120,000    |                       |  |   | 120,000                    |   |  | 8.0 years |  
|Non-compete agreements          |  |                      |         |   |           |   | 765,363    |                       |  |   | 765,363                    |   |  | 3.3 years |  
|Customer list                   |  |                      | 80,000   |   |           |   | 3,637,485  |                       |  |   | 3,717,485                  |   |  | 7.3 years |  
|                                |  |                      |          |   |           |   |            |                       |  |   |                            |   |  |           |  
|                                |  |                      | 373,095  |   |           |   | 10,241,874 |                       |  |   | 10,614,969                 |   |  |           |  
|Currency exchange               |  |                      |         |   |           |   | (383,360   | )                     |  |   | (383,360                   | ) |  |           |  
|Less: Accumulated amortization  |  |                      | (249,283 | ) |           |   | (544,498   | )                     |  |   | (793,781                   | ) |  |           |  
|                                |  |                      |          |   |           |   |            |                       |  |   |                            |   |  |           |  
|                                |  | $                    | 123,812  |   |           | $ | 9,314,016  |                       |  | $ | 9,437,828                  |   |  |           |  
|                                |  |                      |          |   |           |   |            |                       |  |   |                            |   |  |           |  



|(1) | The weighted average useful life for $831,598 of the trade names/trademarks/websites is 5.9 years and the remaining $2,278,748 has a weighted average useful life that is indefinite.
Indefinite lived intangible assets are not amortized for GAAP purposes.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Total amortization expense related to our intangible assets was
approximately $545,000 and $51,000 for the nine months ended September 30, 2008 and 2007, respectively. The estimated aggregate future amortization expense related to our intangible assets with finite lives is as follows:



|                                           |  |   |          
|------------------------------------------ |  | - | ---------
|For the twelve months ending September 30, |  |  
|2009                                       |  | $ | 1,289,460
|2010                                       |  |   | 1,200,354
|2011                                       |  |   | 1,142,679
|2012                                       |  |   | 1,005,184
|2013                                       |  |   | 957,684  
|Thereafter                                 |  |   | 1,563,719
|                                           |  |   |          
|Total                                      |  | $ | 7,159,080
|                                           |  |   |          



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The changes in the carrying amount of goodwill, which is generally not deductible for tax purposes, by reporting unit for
the nine months ended September 30, 2008 were as follows:



|                             |  |                      |           |           |   |           |                       |  |   |            |  
|---------------------------- |  | -------------------- | --------- | --------- | - | --------- | --------------------- |  | - | ---------- | -
|                             |  | BalancesDec 31, 2007 |           | Additions |   |           | BalancesSept 30, 2008 | 
|Knowledge Express purchase   |  | $                    | 1,437,000 |           | $ |          |                       |  | $ | 1,437,000  |  
|Pharma-Transfer purchase     |  |                      | 372,000   |           |   |          |                       |  |   | 372,000    |  
|EKMS purchase                |  |                      | 426,869   |           |   |          |                       |  |   | 426,869    |  
|UTEK-Europe purchase         |  |                      | 562,501   |           |   |          |                       |  |   | 562,501    |  
|Pharmalicensing purchase     |  |                      |          |           |   | 1,526,643 |                       |  |   | 1,526,643  |  
|Strategos purchase & earnout |  |                      |          |           |   | 4,406,996 |                       |  |   | 4,406,996  |  
|Innovaro purchase & earnout  |  |                      |          |           |   | 1,611,419 |                       |  |   | 1,611,419  |  
|                             |  |                      |           |           |   |           |                       |  |   |            |  
|                             |  |                      | 2,798,370 |           |   | 7,545,058 |                       |  |   | 10,343,428 |  
|Currency exchange            |  |                      | 22,694    |           |   | (372,257  | )                     |  |   | (349,563   | )
|                             |  |                      |           |           |   |           |                       |  |   |            |  
|                             |  | $                    | 2,821,064 |           | $ | 7,172,801 |                       |  | $ | 9,993,865  |  
|                             |  |                      |           |           |   |           |                       |  |   |            |  

6. Stockholders Equity

Transactions in common stock for the nine months ended September 30, 2008, were as follows:



|                                 |  |              |  |                   |  |           |         |                |   |           
|-------------------------------- |  | ------------ |  | ----------------- |  | --------- | ------- | -------------- | - | ----------
|Common Stock                     |  | SharesIssued |  | SharesOutstanding |  | Par Value |         | Paid-InCapital
|Balance at December 31, 2007     |  | 9,011,276    |  | 9,011,276         |  | $         | 90,114  |                | $ | 53,148,643
|Employee stock options exercised |  | 31,015       |  | 31,015            |  |           | 310     |                |   | 189,485   
|Share-based compensation expense |  |             |  |                  |  |           |        |                |   | 560,258   
|Acquisition of Pharmalicensing   |  | 153,967      |  | 153,967           |  |           | 1,540   |                |   | 2,148,460 
|Acquisition of Strategos         |  | 1,248,960    |  | 502,970           |  |           | 5,030   |                |   | 6,035,640 
|Acquisition of Innovaro          |  | 691,714      |  | 345,857           |  |           | 3,458   |                |   | 3,660,853 
|Strategos earnout accrual        |  |             |  | 329,670           |  |           | 3,297   |                |   | 3,956,040 
|Innovaro earnout accrual         |  |             |  | 3,328             |  |           | 33      |                |   | 35,514    
|                                 |  |              |  |                   |  |           |         |                |   |           
|Balance at September 30, 2008    |  | 11,136,932   |  | 10,378,083        |  | $         | 103,782 |                | $ | 69,734,893
|                                 |  |              |  |                   |  |           |         |                |   |           

See Note 2 for further information on share-based compensation expense and employee stock options exercised. See
Note 4 for further information on acquisitions and the earnout accrual.

7. Commitments and Contingencies

Employment Agreements

On March 10, 2008, UTEK entered into a one
year employment agreement, effective January 1, 2008, with its Chief Executive Officer, Clifford M. Gross, Ph.D. Under the terms of the employment agreement, Dr. Gross will receive a base salary of $550,000 per year and for each annual
period thereafter. In addition to his base salary, Dr. Gross will be entitled to:



| |  |  | A reasonable automobile allowance to cover the cost of leasing, insuring and maintaining a vehicle for the duration of the employment agreement, and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Participate in UTEKs executive officer health insurance program. UTEK will pay all of the premiums related to Dr. Gross participation in such
program.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

The employment agreement provides that if (i) Dr. Gross is terminated or requested or forced to resign during the
term of the employment agreement, (ii) the employment agreement is not renewed at the end of its term by either party or (iii) UTEK terminates Dr. Grosss employment for cause or in any way that is a breach of the employment
agreement, then Dr. Gross shall receive a severance payment equal to the number of years Dr. Gross has worked for the Company times $100,000 per year, grossed-up to cover any tax liability on such severance payment. In
addition, all stock options held by Dr. Gross accelerate and become immediately vested, and we will be obligated to file a registration statement with the SEC to register any of our unregistered securities held by Dr. Gross.



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The employment agreement also provides that in the event of a change of control, Dr. Gross will be
entitled to receive a one-time bonus equal to twice his annual salary, grossed-up to cover any tax liability on such bonus. In addition, all stock options held by Dr. Gross accelerate and become immediately vested upon a change of
control, and the Company will be obligated to file a registration statement with the SEC to register any of its unregistered securities held by Dr. Gross. A change of control occurs, as defined in the employment agreement, when:
(i) a person or group becomes the beneficial owner of more than 30% of our outstanding securities; (ii) at any time that the board nominated slate of directors is not elected; (iii) the Company consummates a merger in which it is not
the surviving entity; or (iv) substantially all of the Companys assets are sold or the stockholders approve the Companys dissolution or liquidation.

The employment agreement obligates the Company to nominate Dr. Gross to serve as a member of our Board of Directors during the term of the employment agreement.

In consideration of the benefits provided under the employment agreement, Dr. Gross has agreed to protect UTEKs confidential or secret information and, during
the period of employment and one year thereafter, to not compete with UTEK.

Strategos Bonus Plan

In connection with the acquisition of Strategos, the Company implemented the Strategos Bonus Plan for qualifying
Strategos division employees. The award pool is determined from eligible earnings and aggregate revenues and is limited to the extent required to permit Strategos to maintain sufficient operating cash. Awards are to be paid out by December 15thof each year and are accrued on a quarterly basis. Approximately 85% to 90% of Strategos net income will be paid out in connection with this
bonus plan. The Company accrued approximately $4.8 million in connection with the Strategos Bonus Plan as of September 30, 2008.

Innovaro Bonus
Plan

In connection with the acquisition of Innovaro, the Company implemented the Innovaro Bonus
Plan for qualifying Innovaro division employees. The award pool is determined from eligible earnings and aggregate revenues and is limited to the extent required to permit Innovaro to maintain sufficient operating cash. Awards are to be paid out by
June 30thof each year and are accrued on a quarterly basis. Approximately 75% to 85% of Innovaro net income will be paid out in connection
with this bonus plan. There was no accrual in connection with the Innovaro Bonus Plan as of September 30, 2008.

Other

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.

In May 2008, we obtained a $1,000,000 line of credit with the Bank of Tampa. The advances on the line of credit accrue
interest (payable monthly) at prime (5.00% as of September 30, 2008). 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. There are no
borrowings on this line at September 30, 2008.

8. Segment Reporting

The Companys principal area of activity is providing technology transfer services and supporting innovation consulting 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. and Innovaro, the Israel segment includes our wholly owned subsidiary UTEKip, Ltd., and the United States segment includes UTEK Corporation.
UTEKip was dissolved in the second quarter of 2008 and all operations of that segment are currently being serviced by the U.S. segment.



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



|                                     |  |                                               |           |   |        |   |          |               |  |   |            |      |  |   |            |  
|------------------------------------ |  | --------------------------------------------- | --------- | - | ------ | - | -------- | ------------- |  | - | ---------- | ---- |  | - | ---------- | -
|                                     |  | UnitedKingdom                                 |           |   | Israel |   |          | United States |  |   | Total      |     
|Long-lived assets September 30, 2008 |  | $                                             | 6,707,112 |   |        | $ |         |               |  | $ | 13,217,593 |      |  | $ | 19,924,705 |  
|Total assets September 30, 2008      |  |                                               | 6,756,774 |   |        |   |         |               |  |   | 40,576,814 |      |  |   | 47,333,588 |  
|Long-lived assets December 31, 2007  |  |                                               | 589,406   |   |        |   | 13,621   |               |  |   | 2,818,427  |      |  |   | 3,421,454  |  
|Total assets December 31, 2007       |  |                                               | 681,140   |   |        |   | 39,317   |               |  |   | 44,500,620 |      |  |   | 45,221,077 |  
|                                     | 
|                                     |  | For the Three Months Ended September 30, 2008 |          
|                                     |  | UnitedKingdom                                 |           |   | Israel |   |          | United States |  |   | Total      |     
|Income from operations (revenues)    |  | $                                             | 644,897   |   |        | $ |         |               |  | $ | 6,413,509  |      |  | $ | 7,058,406  |  
|Income (loss) before income taxes    |  |                                               | (155,532  | ) |        |   |         |               |  |   | (1,143,907 | )    |  |   | (1,299,439 | )
|Depreciation and amortization        |  |                                               | 123,002   |   |        |   |         |               |  |   | 269,208    |      |  |   | 392,210    |  
|                                     | 
|                                     |  | For the Three Months Ended September 30, 2007 |          
|                                     |  | UnitedKingdom                                 |           |   | Israel |   |          | United States |  |   | Total      |     
|Income from operations (revenues)    |  | $                                             | 122,069   |   |        | $ | 15,810   |               |  | $ | 3,557,035  |      |  | $ | 3,694,914  |  
|Income (loss) before income taxes    |  |                                               | (5,177    | ) |        |   | (60,795  | )             |  |   | 465,483    |      |  |   | 399,511    |  
|Depreciation and amortization        |  |                                               | 424       |   |        |   | 1,608    |               |  |   | 48,956     |      |  |   | 50,988     |  
|                                     | 
|                                     |  | For the Nine months ended September 30, 2008  |          
|                                     |  | UnitedKingdom                                 |           |   | Israel |   |          | United States |  |   | Total      |     
|Income from operations (revenues)    |  | $                                             | 1,127,773 |   |        | $ | 8,638    |               |  | $ | 14,517,179 |      |  | $ | 15,653,590 |  
|Income (loss) before income taxes    |  |                                               | (251,593  | ) |        |   | 634,433  | (1)           |  |   | (2,946,595 | )(1) |  |   | (2,563,755 | )
|Depreciation and amortization        |  |                                               | 195,290   |   |        |   | 2,750    |               |  |   | 465,064    |      |  |   | 663,104    |  
|                                     | 
|                                     |  | For the Nine months ended September 30, 2007  |          
|                                     |  | UnitedKingdom                                 |           |   | Israel |   |          | United States |  |   | Total      |     
|Income from operations (revenues)    |  | $                                             | 234,320   |   |        | $ | 104,653  |               |  | $ | 17,692,161 |      |  | $ | 18,031,134 |  
|Income (loss) before income taxes    |  |                                               | (79,541   | ) |        |   | (114,913 | )             |  |   | 7,645,630  | (2)  |  |   | 7,451,176  |  
|Depreciation and amortization        |  |                                               | 1,245     |   |        |   | 4,713    |               |  |   | 154,497    |      |  |   | 160,455    |  



|(1) | During the nine months ended September 30, 2008, we dissolved UTEKip, which resulted in a gain for the Israel segment and an offsetting loss for the U.S. segment of
approximately $753,000. We dissolved UTEKip with the transfer of operations to the U.S. segment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | During the nine months ended September 30, 2007, the United States segment recorded goodwill impairment for Pharma Transfer of $33,030, which is included in that segments
loss for the period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company has recently changed the way it classifies and records its revenues and certain expenses to provide
additional information for management. This change was as a result of the Companys new products and services from the addition of TekScout and the acquisitions of Pharmalicensing, Strategos and Innovaro. Consequently, the Company has new
product segments for which certain information can be reported. These new product segments include: technology transfer business; innovation consulting comprised of the consulting portion of Strategos and Innovaro businesses; subscription services
comprised of the Companys information services business; and all other services comprised of Intellectual Capital Consulting, technology alliance services, and the TekScout business. The administrative and other column represents miscellaneous
and other income items and general and administrative type expenses that are not allocated amongst the different businesses. Management does not analyze assets for decision making purposes as it relates to the segments below. Accordingly,
information is not available for long-lived assets or total assets.



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



|                                  |  |                         |         |                      |   |                                               |  |   |                     |   |  |                         |         |   |       |   |            |   |  |   |            |  
|--------------------------------- |  | ----------------------- | ------- | -------------------- | - | --------------------------------------------- |  | - | ------------------- | - |  | ----------------------- | ------- | - | ----- | - | ---------- | - |  | - | ---------- | -
|                                  |  |                         |         |                      |   | For the Three Months Ended September 30, 2008 | 
|                                  |  | Sale ofTechnologyRights |         | InnovationConsulting |   | SubscriptionServices                          |  |   | All OtherConsulting |   |  | Administrativeand Other |         |   | Total |  
|Income from operations (revenue)  |  | $                       | 750,000 |                      | $ | 5,139,683                                     |  | $ | 536,934             |   |  | $                       | 496,858 |   |       | $ | 134,931    |   |  | $ | 7,058,406  |  
|Income (loss) before income taxes |  |                         | 189,125 |                      |   | 285,793                                       |  |   | (40,580             | ) |  |                         | (17,227 | ) |       |   | (1,716,550 | ) |  |   | (1,299,439 | )



|                                  |  |                         |           |                      |   |                                              |  |   |                     |   |  |                         |           |   |       |   |            |   |  |   |            |  
|--------------------------------- |  | ----------------------- | --------- | -------------------- | - | -------------------------------------------- |  | - | ------------------- | - |  | ----------------------- | --------- | - | ----- | - | ---------- | - |  | - | ---------- | -
|                                  |  |                         |           |                      |   | For the Nine months ended September 30, 2008 | 
|                                  |  | Sale ofTechnologyRights |           | InnovationConsulting |   | SubscriptionServices                         |  |   | All OtherConsulting |   |  | Administrativeand Other |           |   | Total |  
|Income from operations (revenue)  |  | $                       | 4,684,680 |                      | $ | 7,719,310                                    |  | $ | 1,557,292           |   |  | $                       | 1,437,922 |   |       | $ | 254,386    |   |  | $ | 15,653,590 |  
|Income (loss) before income taxes |  |                         | 2,039,170 |                      |   | 380,473                                      |  |   | (130,629            | ) |  |                         | (201,112  | ) |       |   | (4,651,657 | ) |  |   | (2,563,755 | )

9. Related Party Transactions

During the nine months ended September 30, 2008 and 2007, we loaned funds for operations and real estate improvements of approximately $0 and $721,000, respectively, to certain subsidiaries of UTEK Real Estate
Holdings, Inc., one of UTEKs portfolio companies. The entire outstanding loan balance of approximately $2 million was repaid to the Company in May 2008. In addition, we paid rent of approximately $255,000 and $193,000 to Ybor City Group, Inc.,
a subsidiary of UTEK Real Estate Holdings, Inc., during the nine months ended September 30, 2008 and 2007, respectively.

10. Subsequent Events

On October 10, 2008, pursuant to a stock exchange agreement the Company purchased 100% of Social Technologies Group, Inc. (STG), a
company incorporated in Virginia. STG was acquired for potentially 998,027 shares of UTEK unregistered common stock valued at approximately $10.2 million as of such date. The number of shares is based on the average ten-day closing price prior to
execution of the stock exchange agreement. Under the terms of the agreement, STG stockholders received one half, or 499,013 of the UTEK shares worth approximately $5.1 million at closing. Transfer of the 499,013 UTEK unregistered shares is
restricted for at least 12 months following the close of the transaction. The remaining UTEK shares are held in escrow, to be released in three installments, 12, 24 and 36 months after closing. Delivery of the escrowed shares to STG is dependent on
the achievement of specific revenue targets for the three years following the closing. If such targets are not met, a portion of the escrowed shares will be returned to UTEK. The cost of these contingent shares will be accounted for as an additional
element of the purchase price when and if the shares are earned. In connection with this acquisition, the Company assumed a $600,000 bank note that is payable over a four-year term.

The Company disclosed herein all information regarding this acquisition that was practicable as of the date of this filing given the time constraints.



|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.



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Overview

Recent Business Developments

In 2008, the Company continued to enhance its ability to provide comprehensive innovation consulting
services for clients. To enhance our ability to provide these services, the Company has acquired four companies since January 2008 and has launched the TekScout division. We believe that collectively, these efforts have increased the Companys
ability to service its clients. In subsequent periods it is our intention to pursue additional strategic acquisitions to further enhance our innovation capabilities, the number of clients we can service and our geographic representation.

In January 2008, the Company acquired Pharmalicensing.com, a biopharmaceutical open innovation resource designed for professionals involved with partnering,
licensing, and business development worldwide. In April 2008, the Company acquired Carmi, Inc., a 100% owned subsidiary of Strategos, LLC, a strategic innovation consulting firm that provides consulting services, primarily to large companies. In
July 2008, the Company acquired Innovaro Limited, a European innovation consulting and insight firm. In October 2008, the Company acquired Social Technologies Group, Inc., an innovation consulting and insight firm.

Executive Summary

Our total assets were $47.3 million and our
net assets were $38.9 million at September 30, 2008, compared to $45.2 million and $43.7 million at December 31, 2007, respectively. Net asset value per share was $3.74 at September 30, 2008 and $4.85 at December 31, 2007. At
September 30, 2008, we had no long-term debt outstanding, $5.6 million in cash and cash equivalents and $3.2 million of investments in U.S. Treasuries and certificates of deposit.

Income from operations for the nine months ended September 30, 2008 totaled approximately $15.7 million, as compared to $18.0 million for the nine months ended September 30, 2007. Net income (loss) from
operations for the nine months ended September 30, 2008 totaled approximately $(6.4 million) as compared to $4.4 million for the same period of 2007. Net realized losses on investments, net of deferred tax effect, totaled approximately $(3.8
million) for the nine months ended September 30, 2008 as compared to $(1.7 million) for the same period of 2007. In this regard, we received gross proceeds of $1.9 million for the nine months ended September 30, 2008 and $1.2 million for
the same period of 2007 in connection with the sale of the securities we received in connection with our technology acquisition alliance agreements and technology transfers. Net change in unrealized depreciation of investments, net of deferred tax
benefit, was $(10.6 million) for the nine months ended September 30, 2008 as compared to $(6.8 million) for the same period of 2007.

Our financial
condition is dependent on a number of factors including our ability to effectuate technology transfers and the performance of the equity investments that we receive in connection with these transfers. Substantially all of our investments are in
development stage and start-up 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.

Current Market Conditions

Since mid-2007, global credit and other financial markets have suffered substantial stress, volatility, illiquidity and disruption. These forces reached unprecedented levels in late 2008, resulting in the bankruptcy
or acquisition of, or government assistance to, several major domestic and international financial institutions. These events have significantly diminished overall confidence in the financial markets and caused increasing global economic
uncertainty. This reduced confidence and uncertainty could further exacerbate the overall market disruptions and risks to businesses in need of capital, including us and our portfolio companies. Moreover, the deterioration in the equity markets has
had a significant impact on the valuations of our investments and the cash proceeds that we have been able to obtain upon the sale of our investments. A further worsening of this situation or a prolonged period without improvement from the levels at
the end of the third quarter of 2008 could adversely affect our financial position.

Technology Transfers and Technology Acquisition Alliances

For the nine months ended September 30, 2008, we had a similar number of active technology acquisition alliance clients over September 30,
2007, but due to the longer time required to close technology transfers with our expanding client base of larger client companies, the number of completed technology transfers decreased. The following provides additional information regarding our
technology acquisition alliance and technology transfer activities:



| |  |  | As of September 30, 2008, we had 50 active technology acquisition alliance agreements as compared to 53 active technology acquisition alliances at
September 30, 2007; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | During the nine months ended September 30, 2008, we completed 7 technology transfers valued at approximately $4.7 million as compared to 14 technology
transfers valued at approximately $14.8 million in the same period of 2007.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Portfolio Activity

The following is a list of significant changes in our portfolio during the nine months ended September 30, 2008:



| |  |  | The sale of some or all of our shares in Broadcast International, Inc., Ecosystem Corporation, Industrial Biotechnology Corporation, Material Technologies, Inc.,
Avalon Oil and Gas, Inc. and various other portfolio companies for approximately $1.9 million, which resulted in realized losses of $3.8 million (net of income tax effect);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The completion of 7 technology transfers for stock valued at approximately $4.6 million and $125,000 in cash; and
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | Net unrealized depreciation of $5.8 million (net of income tax effect) in the fair value of our investments.
| | - |  | ------------------------------------------------------------------------------------------------------------

Our most significant portfolio investments at September 30, 2008 were in UTEK Real Estate Holdings, Inc., Advanced Medical Isotope Corporation, World Energy
Solutions, Inc., MiMedx Group, Inc. and Cyberlux Corporation. These five investments totaled $10.8 million in fair value and represented 75% of our investments excluding our investments in U.S. Treasuries and certificates of deposits and 28% of net
assets at September 30, 2008.

Our capital investments made in our newly formed companies during the nine months ended September 30, 2008 totaled
$1.8 million. Of the total capital invested in our newly formed companies during the nine months ended September 30, 2008, $500,000 was expended on license and consulting fees and $1.3 million was to assist our clients in commercializing their
new technology. All of these items are reflected in the accompanying consolidated statement of operations as acquisition of technology rights.

The net
unrealized depreciation for the nine months ended September 30, 2008 was primarily due to a reduction in value of the following investments in our portfolio: Advanced Refractive Technologies, Inc., Cyberlux Corporation, Material Technologies,
Inc., Emission & Power Solutions, Inc., Manakoa Services Corp., Pathway One PLC, RIM Semiconductor Company and World Energy Solutions, Inc.; partially offset by the reversal of unrealized depreciation on various investments upon their sale
during the period.

While these unrealized losses were significant, failures among small cap companies are not unexpected and may occur in the future. The
current portfolio is comprised of fifty holdings. Many of these positions are in 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 of these companies to obtain additional capital, to execute their business model, or termination or obsolescence of their technology licenses, etc.) or to general marketplace factors. Moreover, in the event that the
United States economy enters into a prolonged recession, it is possible that these companies could be negatively impacted, which could ultimately lead to greater difficulty in our ability to sell our equity investments in such companies at
acceptable levels, or at all.

Results of Operations

Income from Operations (Revenue)



|                                   |  |                                |       |                  |   |       |                                |     |                  |  |      |        |  |   |        |  |     |   
|---------------------------------- |  | ------------------------------ | ----- | ---------------- | - | ----- | ------------------------------ | --- | ---------------- |  | ---- | ------ |  | - | ------ |  | --- | --
|                                   |  | Three monthsendedSeptember 30, |       | PercentageChange |   |       | Nine months endedSeptember 30, |     | PercentageChange | 
|(in thousands, except percentages) |  | 2008                           |       | 2007             |   |       |                                |     | 2008             |  | 2007 |        |  |  
|Innovation Consulting Services     |  | $                              | 5,139 |                  | $ | -0-   |                                |    | %                |  | $    | 7,719  |  | $ | -0-    |  |    | % 
|Sale of Technology Rights          |  |                                | 750   |                  |   | 2,921 |                                | (74 | )%               |  |      | 4,685  |  |   | 14,836 |  | (68 | )%
|Subscription and Other Services    |  |                                | 1,034 |                  |   | 647   |                                | 60  | %                |  |      | 2,995  |  |   | 2,716  |  | 10  | % 
|Other Income, net                  |  |                                | 135   |                  |   | 127   |                                | 6   | %                |  |      | 255    |  |   | 479    |  | (47 | )%
|                                   |  |                                |       |                  |   |       |                                |     |                  |  |      |        |  |   |        |  |     |   
|Income from Operations             |  | $                              | 7,058 |                  | $ | 3,695 |                                | 91  | %                |  | $    | 15,654 |  | $ | 18,031 |  | (13 | )%
|                                   |  |                                |       |                  |   |       |                                |     |                  |  |      |        |  |   |        |  |     |   

Innovation Consulting Services

As a result of our acquisitions of innovation consulting services companies in 2008, our innovation consulting revenue increased to $5.1 million and $7.7 million for the three and nine months ended September 30,
2008, respectively, versus $-0- for each of the three and nine months ended September 30, 2007. In subsequent periods, it is our intention to pursue additional strategic acquisitions which will continue to increase the innovation consulting
services revenue and enhance our ability to better service the innovation needs of our clients.



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Sale of Technology Rights

Sale of technology rights revenue for the three months ended September 30, 2008 decreased as a result of our having completed one technology transfer during the three months ended September 30, 2008 as compared to completing three
technology transfers during the three months ended September 30, 2007. Sale of technology rights revenue decreased for the nine months ended September 30, 2008 as a result of having completed seven technology transfers in 2008 versus
fourteen in 2007. In addition, the average revenue per technology transfer decreased 23% and 37%, respectively, for the three and nine months ended September 30, 2008 versus 2007. Overall equity market conditions have generally forced
micro-capitalization stock prices down, making it more difficult for some of our clients to issue a reasonable amount of stock with sufficient value in exchange for these technologies. To mitigate the risk of declining stock prices with respect to
the stock consideration we receive in connection with our technology transfers, the Company is pursuing technology transfers on a more selective basis.

Subscriptions and Other Services

Our subscriptions and other services revenue was $1.0 million for the three months ended
September 30, 2008 versus $647,000 for the three months ended September 30, 2007. Similarly, our subscriptions and other services revenue was $3.0 million for the nine months ended September 30, 2008 versus $2.7 million for the nine
months ended September 30, 2007. The increase is partially attributable to the acquisition of Pharmalicensing in January 2008, which contributed $185,000 and $565,000 to subscription revenues for the three and nine months ended
September 30, 2008, respectively. In addition, the acquisition of Strategos in April 2008 contributed $193,000 and $374,000 to other services revenues for the three and nine months ended September 30, 2008, respectively. We also had
increases of $104,000 and $283,000, respectively, in information services revenue for the three and nine months ended September 30, 2008 versus 2007. We had net decreases of $95,000 and $943,000, respectively, in all other related revenues for
the three and nine months ended September 30, 2008 versus 2007. It is our intention to grow our subscriptions and other services revenue internally as well as with additional strategic acquisitions.

Investment Income, net

Investment income increased marginally in for
the three months ended September 30, 2008 as compared to the same period of 2007. However, there was an overall decrease for the nine months ended September 30, 2008 over 2007 due to a decrease in the cash and cash equivalents balances in
the beginning of 2008 as well as lower interest rates.

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

Direct Costs of Innovation Consulting Services



|                                               |  |                                |       |   |                  |   |     |                               |  |   |                  |  |   |       |   |  |   |     |   |  |   |    
|---------------------------------------------- |  | ------------------------------ | ----- | - | ---------------- | - | --- | ----------------------------- |  | - | ---------------- |  | - | ----- | - |  | - | --- | - |  | - | ---
|                                               |  | Three monthsendedSeptember 30, |       |   | PercentageChange |   |     | Nine monthsendedSeptember 30, |  |   | PercentageChange | 
|(In thousands, except percentages)             |  | 2008                           |       |   | 2007             |   |     |                               |  |   | 2008             |  |   | 2007  |   |  |   |    
|Direct costs of innovation consulting services |  | $                              | 4,568 |   |                  | $ | -0- |                               |  |  | %                |  | $ | 6,886 |   |  | $ | -0- |   |  |  | %  
|As a percent of innovation consulting services |  |                                | 89    | % |                  |   |    | %                             |  |  | ppt              |  |   | 89    | % |  |   |    | % |  |  | ppt



|* | The abbreviation ppt denotes percentage points.
|- | -------------------------------------------------

Direct costs
of innovation consulting services are comprised of salaries and related taxes, bonuses, certain outside services and other direct project costs related to innovation consulting services revenue. This expense line item was created in 2008 as a result
of the acquisition of Strategos and Innovaro.

The most significant portion of direct costs of innovation consulting services is comprised of bonuses.
These bonuses comprised $2.7 million and $4.8 million of direct costs of innovation consulting services for the three and nine months ended September 30, 2008, respectively. The Company had $4.8 million in accrued bonuses included in accrued
expenses in the consolidated statement of assets and liabilities as of September 30, 2008. A significant portion of this accrual is expected to be paid out from available cash and short-term investments during the fourth quarter of 2008.



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Acquisition of Technology Rights



|                                          |  |                                |     |   |                  |   |     |                               |  |     |                  |  |   |       |   |  |   |       |   |  |     |    
|----------------------------------------- |  | ------------------------------ | --- | - | ---------------- | - | --- | ----------------------------- |  | --- | ---------------- |  | - | ----- | - |  | - | ----- | - |  | --- | ---
|                                          |  | Three monthsendedSeptember 30, |     |   | PercentageChange |   |     | Nine monthsendedSeptember 30, |  |     | PercentageChange | 
|(In thousands, except percentages)        |  | 2008                           |     |   | 2007             |   |     |                               |  |     | 2008             |  |   | 2007  |   |  |   |      
|Acquisition of technology rights          |  | $                              | 300 |   |                  | $ | 838 |                               |  | (64 | )%               |  | $ | 1,780 |   |  | $ | 3,171 |   |  | (44 | )% 
|As a percent of sale of technology rights |  |                                | 40  | % |                  |   | 29  | %                             |  | 11  | ppt              |  |   | 38    | % |  |   | 21    | % |  | 17  | 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 acquisition of technology rights costs as a percentage of sale of technology rights revenue increased by 11 and 17 percentage points, respectively, for the three and nine months ended September 30, 2008 versus 2007. Overall
equity market conditions have had a significant impact on our revenue to cost ratio. Stock prices for our micro-capitalization clients have decreased, making it more difficult for some of our clients to issue stock with sufficient value in exchange
for technologies. Consequently, the costs we have incurred relative to the declining value of stock we have been able to receive in connection with technology transfers has resulted in an increase in the acquisition of technology rights costs as a
percentage of technology rights revenue.

Acquisition of technology rights costs are directly related to sale of technology rights revenue. In an effort to
curb costs associated with technology transfers, our plan is to focus for the remainder of 2008 on technology transfers for cash remuneration and equity transfers which do not require significant amounts of upfront cash costs.

The following tables provide certain information related to the acquisition of technology rights expenses we incurred in connection with our technology transfers during
the three and nine months ended September 30, 2008:



|             |  |                                                    |  |                                                 |  |                         |          
|------------ |  | -------------------------------------------------- |  | ----------------------------------------------- |  | ----------------------- | ---------
|Date         |  | Name of Company Acquiring the
Newly Formed Company |  | Newly Formed Company                            |  | DollarAmount ofExpenses
|September 27 |  | World Energy Solutions, Inc.                       |  | H-Hybrid Technologies, Inc.                     |  | $                       | 300,000  
|             |  |                                                    |  |                                                 |  |                         |          
|             |  |                                                    |  | Total for three months ended September 30, 2008 |  |                         | 300,000  
|             |  |                                                    |  |                                                 |  |                         |          
|June 26      |  | CSMG Technologies, Inc.                            |  | Carbon Capture Technologies, Inc.               |  |                         | 60,000   
|June 10      |  | World Energy Solutions, Inc.                       |  | Advanced Alternative Energy, Inc.               |  |                         | 236,000  
|March 31     |  | Platina Energy Group Inc.                          |  | Enhanced Oil Recovery Technologies, Inc.        |  |                         | 360,500  
|March 24     |  | RIM Semiconductor Company                          |  | Multi-Carrier Communications, Inc.              |  |                         | 383,500  
|January 28   |  | RIM Semiconductor Company                          |  | Broadband Distance Systems, Inc.                |  |                         | 440,000  
|             |  |                                                    |  |                                                 |  |                         |          
|             |  |                                                    |  | Total for nine months ended September 30, 2008  |  | $                       | 1,780,000
|             |  |                                                    |  |                                                 |  |                         |          

The following tables provide certain information related to the acquisition of technology rights expenses we
incurred in connection with our technology transfers during the three and nine months ended September 30, 2007:



|        |  |                                                    |  |                                                 |  |                         |        
|------- |  | -------------------------------------------------- |  | ----------------------------------------------- |  | ----------------------- | -------
|Date    |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                            |  | DollarAmount ofExpenses
|Sept 28 |  | World Energy Solutions, Inc.                       |  | Hydrogen Safe Technologies, Inc.                |  | $                       | 492,350
|July 20 |  | MachineTalker, Inc.                                |  | Wideband Detection Technologies, Inc.           |  |                         | 40,000 
|July 12 |  | Pathway One Plc                                    |  | WebMed Technologies, Inc.                       |  |                         | 305,215
|        |  |                                                    |  |                                                 |  |                         |        
|        |  |                                                    |  | Total for three months ended September 30, 2007 |  |                         | 837,565
|        |  |                                                    |  |                                                 |  |                         |        
|June 28 |  | Material Technologies, Inc.                        |  | Non-Destructive Assessment Technologies, Inc.   |  |                         | 280,000
|May 30  |  | Klegg Electronics, Inc.                            |  | Klegg Network Storage Technologies, Inc.        |  |                         | 450,000



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|            |  |                                    |  |                                                |  |   |          
|----------- |  | ---------------------------------- |  | ---------------------------------------------- |  | - | ---------
|April 30    |  | Material Technologies, Inc.        |  | Damage Assessment Technologies, Inc.           |  |   | 300,000  
|March 28    |  | Avalon Oil & Gas, Inc.             |  | Leak Location Technologies, Inc.               |  |   | 155,000  
|March 12    |  | Klegg Electronics, Inc.            |  | Tempo Control Technologies, Inc.               |  |   | 135,388  
|March 12    |  | Metamorphix Global, Inc.           |  | Flex Crete Technologies, Inc.                  |  |   | 52,884   
|February 12 |  | Liberty Diversified Holdings, Inc. |  | Sero Tonin Solutions, Inc.                     |  |   | 70,052   
|January 31  |  | Material Technologies, Inc.        |  | Stress Analysis Technologies, Inc.             |  |   | 130,000  
|January 30  |  | CytoDyn, Inc.                      |  | Advanced Genetic Technologies, Inc.            |  |   | 167,500  
|January 11  |  | Cyberlux Corporation               |  | Hybrid Lighting Technologies, Inc.             |  |   | 192,455  
|January 4   |  | Manakoa Services Corporation       |  | Infinite Identification Technologies, Inc.     |  |   | 400,000  
|            |  |                                    |  |                                                |  |   |          
|            |  |                                    |  | Total for nine months ended September 30, 2007 |  | $ | 3,170,844
|            |  |                                    |  |                                                |  |   |          

Salaries and Wages



|                                   |  |                                |       |   |                  |   |     |                               |  |    |                  |  |   |       |   |  |   |       |   |  |       |  
|---------------------------------- |  | ------------------------------ | ----- | - | ---------------- | - | --- | ----------------------------- |  | -- | ---------------- |  | - | ----- | - |  | - | ----- | - |  | ----- | -
|                                   |  | Three monthsendedSeptember 30, |       |   | PercentageChange |   |     | Nine monthsendedSeptember 30, |  |    | PercentageChange | 
|(In thousands, except percentages) |  | 2008                           |       |   | 2007             |   |     |                               |  |    | 2008             |  |   | 2007  |   |  |   |      
|Salaries and wages                 |  | $                              | 1,141 |   |                  | $ | 889 |                               |  | 28 | %                |  | $ | 3,506 |   |  | $ | 2,664 |   |  | 32    | %
|As a percent of revenue            |  |                                | 16    | % |                  |   | 24  | %                             |  | (8 | ) ppt            |  |   | 22    | % |  |   | 15    | % |  | 7 ppt |  

Salaries and wages include non-sales employees and officer salaries and related benefits including stock-based
compensation. Of the $252,000 increase in salaries and wages during the three months ended September 30, 2008, $132,000 related to the addition of Pharmalicensing employees to the payroll in connection with the acquisition, $50,000 related to a
bonus to our chief operating officer, and $48,000 related to additional salaries for our new TekScout online exchange.

Salaries and wages increased
$842,000 during the nine months ended September 30, 2008 as a result of the addition of Pharmalicensing employees to the payroll of $316,000, additional salaries related to our new TekScout online exchange of $125,000, increased officer
salaries of $258,000 and an increase in stock-based compensation expense of $117,000 resulting from additional option grants.

We expect salaries and wages
to continue to increase during the remainder of 2008 as a result of our intention to pursue additional strategic acquisitions.

Professional Fees



|                                   |  |                                |     |   |                  |   |     |                               |  |     |                  |  |   |      |   |  |   |       |   |  |     |      
|---------------------------------- |  | ------------------------------ | --- | - | ---------------- | - | --- | ----------------------------- |  | --- | ---------------- |  | - | ---- | - |  | - | ----- | - |  | --- | -----
|                                   |  | Three monthsendedSeptember 30, |     |   | PercentageChange |   |     | Nine monthsendedSeptember 30, |  |     | PercentageChange | 
|(In thousands, except percentages) |  | 2008                           |     |   | 2007             |   |     |                               |  |     | 2008             |  |   | 2007 |   |  |   |      
|Professional fees                  |  | $                              | 276 |   |                  | $ | 505 |                               |  | (45 | )%               |  | $ | 834  |   |  | $ | 1,119 |   |  | (25 | )%   
|As a percent of revenue            |  |                                | 4   | % |                  |   | 14  | %                             |  | (10 | ) ppt            |  |   | 5    | % |  |   | 6     | % |  | (1  | ) ppt

Professional fees include accounting fees, legal fees and valuation expenses for our investments. The decrease in
professional fees relates to a decrease in legal fees of $258,000 and $301,000, respectively, for the three and nine months ended September 30, 2008, partially offset by modest increases in accounting and valuation fees.

Sales and Marketing



|                                   |  |                                |     |   |                  |   |     |                               |  |    |                  |  |   |       |   |  |   |       |   |  |       |  
|---------------------------------- |  | ------------------------------ | --- | - | ---------------- | - | --- | ----------------------------- |  | -- | ---------------- |  | - | ----- | - |  | - | ----- | - |  | ----- | -
|                                   |  | Three monthsendedSeptember 30, |     |   | PercentageChange |   |     | Nine monthsendedSeptember 30, |  |    | PercentageChange | 
|(In thousands, except percentages) |  | 2008                           |     |   | 2007             |   |     |                               |  |    | 2008             |  |   | 2007  |   |  |   |      
|Sales and marketing                |  | $                              | 602 |   |                  | $ | 398 |                               |  | 51 | %                |  | $ | 1,836 |   |  | $ | 1,488 |   |  | 23    | %
|As a percent of revenue            |  |                                | 9   | % |                  |   | 11  | %                             |  | (2 | ) ppt            |  |   | 12    | % |  |   | 8     | % |  | 4 ppt |  

Sales and marketing expenses include advertising, marketing, salaries and commissions paid to sales personnel,
commissions paid to outside service providers, travel and other costs of sales and selling expenses. Sales and marketing expenses increased



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$204,000 for the three months ended September 30, 2008 as compared to 2007. The increase was a result of the increased costs related to the three
acquisitions described elsewhere in this Form 10-Q of $97,000 and additional sales conferences costing $60,000.

Sales and marketing expenses increased
$348,000 for nine months ended September 30, 2008 as compared to 2007. The increase was a result of the increased costs related to the three acquisitions described elsewhere in this Form 10-Q of $155,000 and additional sales managers added to
the business development and technology licensing sales divisions of $230,000. This increase was partially offset by a decrease in commissions earned of $80,000 due to the decrease in related revenue for the nine months ended September 30,
2008.

We expect sales and marketing costs to continue to increase during the remainder of 2008 as a result of our intention to pursue additional strategic
acquisitions and the creation of new sales management positions to strengthen the senior management team and enhance the potential for Company development.

General and Administrative



|                                   |  |                                |       |   |                  |   |     |                               |  |       |                  |  |   |       |   |  |   |       |   |  |        |  
|---------------------------------- |  | ------------------------------ | ----- | - | ---------------- | - | --- | ----------------------------- |  | ----- | ---------------- |  | - | ----- | - |  | - | ----- | - |  | ------ | -
|                                   |  | Three monthsendedSeptember 30, |       |   | PercentageChange |   |     | Nine monthsendedSeptember 30, |  |       | PercentageChange | 
|(In thousands, except percentages) |  | 2008                           |       |   | 2007             |   |     |                               |  |       | 2008             |  |   | 2007  |   |  |   |      
|General and administrative         |  | $                              | 1,471 |   |                  | $ | 666 |                               |  | 121   | %                |  | $ | 3,376 |   |  | $ | 2,105 |   |  | 60     | %
|As a percent of revenue            |  |                                | 21    | % |                  |   | 18  | %                             |  | 3 ppt |                  |  |   | 22    | % |  |   | 12    | % |  | 10 ppt |  

General and administrative costs increased $805,000 for the three months ended September 30, 2008 as compared
to 2007. The increase was a result of the costs related to the 2008 acquisitions described elsewhere in this Form 10-Q of $39,000; outside services of $102,000; the amortization of the intangible assets acquired of $308,000; additional employee
costs including benefits and taxes of $226,000; and rent of $55,000.

General and administrative costs increased $1.3 million for the nine months ended
September 30, 2008 as compared to 2007. The increase was a result of the costs related to the 2008 acquisitions described elsewhere in this Form 10-Q of $90,000; outside services of $108,000; the amortization of the intangible assets acquired
of $464,000; additional employee costs including benefits and taxes of $407,000; and rent of $155,000.

We expect to have an increase in general and
administrative expenses for the year ended December 31, 2008 as a result of our acquisitions.

Goodwill Impairment

The Company determined that 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 in 2007. 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 nine months ended September 30, 2007.
There were no indicators during the nine months ended September 30, 2008 that required any impairment to goodwill.

Net Realized Gains (Losses)
on Investments



|                                   |  |                                |      |   |                  |   |      |                               |  |     |                  |  |   |        |   |  |   |        |   |  |     |  
|---------------------------------- |  | ------------------------------ | ---- | - | ---------------- | - | ---- | ----------------------------- |  | --- | ---------------- |  | - | ------ | - |  | - | ------ | - |  | --- | -
|                                   |  | Three monthsendedSeptember 30, |      |   | PercentageChange |   |      | Nine monthsendedSeptember 30, |  |     | PercentageChange | 
|(In thousands, except percentages) |  | 2008                           |      |   | 2007             |   |      |                               |  |     | 2008             |  |   | 2007   |   |  |   |       
|Realized gains/ (losses)           |  | $                              | (275 | ) |                  | $ | (552 | )                             |  | (50 | )%               |  | $ | (3,752 | ) |  | $ | (1,690 | ) |  | 122 | %



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Net realized losses on investments, net of income tax effect, amounted to $275,303 for the three months ended
September 30, 2008 and were related to sales as follows:



|                                                            |  |                 |  |                     |          |  
|----------------------------------------------------------- |  | --------------- |  | ------------------- | -------- | -
|Company Name                                                |  | Number ofShares |  | RealizedGain (Loss) |         
|American Soil Technologies, Inc.                            |  | 70,343          |  | $                   | (9,721   | )
|CSMG Technologies, Inc.                                     |  | 50,000          |  |                     | 4,990    |  
|Ecosphere Technologies Inc                                  |  | 208,333         |  |                     | 3,119    |  
|Gammacan International, Inc.                                |  | 85,000          |  |                     | (17,635  | )
|Material Technologies, Inc.                                 |  | 1,308,241       |  |                     | (220,982 | )
|Net Fabric Corporation                                      |  | 240,000         |  |                     | (12,092  | )
|TGI Solar Power Group, Inc (Tenth Gate International, Inc.) |  | 17,400          |  |                     | (22,982  | )
|Total                                                       |  |                 |  | $                   | (275,303 | )
|                                                            |  |                 |  |                     |          |  

Net realized losses on investments, net of income tax effect, amounted to $551,958 for the three months ended
September 30, 2007 and were related to sales as follows:



|                                 |  |                |  |                     |          |  
|-------------------------------- |  | -------------- |  | ------------------- | -------- | -
|Company Name                     |  | NumberofShares |  | RealizedGain (Loss) |         
|American Soil Technologies, Inc. |  | 300            |  |                     | (18      | )
|Broadcast International, Inc.    |  | 232,452        |  |                     | (13,446  | )
|Health Sciences Group, Inc.      |  | 781,703        |  |                     | (355,079 | )
|Power3 Medical Products, Inc.    |  | 185,000        |  |                     | (80,247  | )
|Rival Technologies, Inc.         |  | 78,500         |  |                     | (7,623   | )
|Swiss Medica, Inc.               |  | 785,000        |  |                     | (77,022  | )
|XELR8 Holdings, Inc.             |  | 2,500          |  |                     | 1,170    |  
|World Energy Solutions, Inc.     |  | 19,500         |  |                     | (19,693  | )
|                                 |  |                |  |                     |          |  
|Total                            |  |                |  | ($                  | 551,958  | )
|                                 |  |                |  |                     |          |  

Net realized losses on investments, net of income tax effect, amounted to $3,752,177 for the nine months ended
September 30, 2008 and were related to sales as follows:



|                                                             |  |                 |  |                     |            |  
|------------------------------------------------------------ |  | --------------- |  | ------------------- | ---------- | -
|Company Name                                                 |  | Number ofShares |  | RealizedGain (Loss) |           
|5G Wireless Communications, Inc.                             |  | 122,379         |  | $                   | (49,160    | )
|aeroTelesis, Inc.                                            |  | 384,000         |  |                     | (20,512    | )
|American Soil Technologies, Inc.                             |  | 300,045         |  |                     | (34,890    | )
|Avalon Oil and Gas, Inc.                                     |  | 247,200         |  |                     | (235,050   | )
|Broadcast International, Inc.                                |  | 478,562         |  |                     | 479,441    |  
|Cargo Connection Logistics Holdings, Inc.                    |  | 11,078,103      |  |                     | (35,934    | )
|CSMG Technologies, Inc.                                      |  | 50,000          |  |                     | 4,990      |  
|Cyberlux Corporation                                         |  | 2,050,000       |  |                     | 3,440      |  
|Ecosphere Technologies Inc                                   |  | 264,333         |  |                     | 1,310      |  
|EcoSystem Corporation                                        |  | 922,446         |  |                     | (1,513,603 | )
|Gammacan International, Inc.                                 |  | 85,000          |  |                     | (17,635    | )
|Industrial Biotechnology Corporation                         |  | 2,491           |  |                     | (1,805,369 | )
|Material Technologies, Inc.                                  |  | 2,728,243       |  |                     | (323,273   | )
|Magnitude Information Systems, Inc.                          |  | 697,860         |  |                     | (8,968     | )
|MM2 Group Inc.                                               |  | 825,852         |  |                     | (19,914    | )
|Modern Technology Corporation                                |  | 37,500          |  |                     | (51,193    | )
|Net Fabric Corporation                                       |  | 305,500         |  |                     | (15,194    | )
|Protocall Technologies, Inc.                                 |  | 269,230         |  |                     | (5,068     | )
|SolarBrook Water and Power Corp.                             |  | 808,529         |  |                     | (75,956    | )
|TGI Solar Power Group, Inc. (Tenth Gate International, Inc.) |  | 837,400         |  |                     | (22,219    | )
|US Starcom Inc.                                              |  | 180,000         |  |                     | (7,420     | )
|                                                             |  |                 |  |                     |            |  
|Total                                                        |  |                 |  | ($                  | 3,752,177  | )
|                                                             |  |                 |  |                     |            |  



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Net realized losses on investments, net of income tax effect, amounted to $1,690,238 for the nine months ended
September 30, 2007 and were related to sales as follows:



|                                       |  |                 |  |                     |           |  
|-------------------------------------- |  | --------------- |  | ------------------- | --------- | -
|Company Name                           |  | Number ofShares |  | RealizedGain (Loss) |          
|Advanced Refractive Technologies, Inc. |  | 1,533,333       |  | $                   | (46,064   | )
|American Soil Technologies, Inc.       |  | 87,855          |  |                     | 96        |  
|Shumate Industries, Inc.               |  | 171,432         |  |                     | 127,234   |  
|Health Sciences Group, Inc.            |  | 3,023,703       |  |                     | (974,894  | )
|Swiss Medica, Inc.                     |  | 1,735,000       |  |                     | (181,851  | )
|Xethanol Corporation                   |  | 136,838         |  |                     | (378,936  | )
|Broadcast International, Inc.          |  | 312,952         |  |                     | (38,069   | )
|Rival Technologies, Inc.               |  | 120,000         |  |                     | (224      | )
|Power3 Medical Products, Inc.          |  | 221,033         |  |                     | (106,931  | )
|XELR8 Holdings, Inc.                   |  | 2,500           |  |                     | 1,170     |  
|World Energy Solutions, Inc.           |  | 19,500          |  |                     | (19,693   | )
|Manakoa Services Corporation           |  | 578,958         |  |                     | (72,076   | )
|                                       |  |                 |  |                     |           |  
|Total                                  |  |                 |  | ($                  | 1,690,238 | )
|                                       |  |                 |  |                     |           |  

Net realized gains and losses can vary substantially due to a variety of factors and may not be indicative of
future performance. As a result of the uncertainty surrounding the future values of our investments, we are unable to make any projections or estimates regarding realized gains or losses expected in 2008.

Net Change in Unrealized Appreciation or Depreciation on Investments

We estimate the value of each investment in our portfolio on a quarterly basis and changes in value result in unrealized appreciation or depreciation being recognized. Value, as defined in Section 2(a)(41) of the 1940 Act, 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 (other than U.S. Treasuries and certificates of deposit), 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 monthsendedSeptember 30, |        | PercentageChange |      |   | Nine monthsendedSeptember 30, |  |        | PercentageChange | 
|(In thousands, except percentages)      |  | 2008                           |        |                  | 2007 |   |                               |  |        | 2008             |  |   | 2007    |   |  |   |       
|Unrealized appreciation/ (depreciation) |  | $                              | (6,542 | )                |      | $ | 230                           |  | (2,947 | )%               |  | $ | (10,589 | ) |  | $ | (6,792 | ) |  | 56 | %

Overall negative equity market conditions and a weakening U.S. economy have resulted in significant decreases in
market prices for some of our portfolio companies. This has resulted in significant unrealized depreciation on many of our investments during the current period. In addition, we recorded a valuation allowance against our deferred tax asset during
the third quarter of 2008. A portion of the valuation allowance ($4.8 million) was charged as an expense against the change in unrealized depreciation of investments for the three and nine months ended September 30, 2008. The valuation
allowance was recorded as a result of managements determination that it was more likely than not that our net operating loss carryforwards would not be utilized in the future.



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Net change in unrealized appreciation (depreciation) on investments, net of income tax effect, amounted to $(6,541,649)
for the three months ended September 30, 2008 and was related to our investments as follows:



|                                       |  |                                          |            |  
|-------------------------------------- |  | ---------------------------------------- | ---------- | -
|Company Name                           |  | Net unrealizedAppreciation(Depreciation) |           
|Cyberlux Corporation                   |  | $                                        | (409,584   | )
|Oxygen Biotherapeutic                  |  |                                          | (371,725   | )
|World Energy Solutions, Inc.           |  |                                          | (227,276   | )
|Advanced Refractive Technologies, Inc. |  |                                          | (216,237   | )
|MachineTalker                          |  |                                          | (277,858   | )
|Cytodyn, Inc                           |  |                                          | 217,172    |  
|Effect of recognition of gains/losses  |  |                                          | 37,408     |  
|All other investments                  |  |                                          | (488,931   | )
|Deferred tax asset valuation allowance |  |                                          | (4,804,618 | )
|                                       |  |                                          |            |  
|                                       |  | $                                        | (6,541,649 | )
|                                       |  |                                          |            |  

Net change in unrealized appreciation (depreciation) on investments, net of income tax effect, amounted to
$229,749 or the three months ended September 30, 2007 and was related to our investments as follows:



|                                       |  |                                          |          |  
|-------------------------------------- |  | ---------------------------------------- | -------- | -
|Company Name                           |  | Net UnrealizedAppreciation(Depreciation) |         
|Material Technologies, Inc.            |  | $                                        | 772,265  |  
|Klegg Electronics, Inc.                |  |                                          | (538,315 | )
|Mimedx, Inc.                           |  |                                          | 523,908  |  
|USTelematics, Inc.                     |  |                                          | 427,110  |  
|Advanced Refractive Technologies, Inc. |  |                                          | (436,466 | )
|All other investments                  |  |                                          | (518,753 | )
|                                       |  |                                          |          |  
|                                       |  | $                                        | 229,749  |  
|                                       |  |                                          |          |  

Net change in unrealized appreciation (depreciation) on investments, net of income tax effect, amounted to
$(10,589,276) for the nine months ended September 30, 2008 and was related to our investments as follows:



|                                       |  |                                          |             |  
|-------------------------------------- |  | ---------------------------------------- | ----------- | -
|Company Name                           |  | Net UnrealizedAppreciation(Depreciation) |            
|Advanced Refractive Technologies, Inc. |  | $                                        | (648,274    | )
|Cyberlux Corporation                   |  |                                          | (746,094    | )
|Emission & Power Solutions, Inc.       |  |                                          | (969,603    | )
|Material Technologies, Inc.            |  |                                          | (2,575,969  | )
|Manakoa Services Corporation           |  |                                          | (510,498    | )
|Pathway One Plc                        |  |                                          | (448,753    | )
|RIM Semiconductor Company              |  |                                          | (1,117,982  | )
|World Energy Solutions                 |  |                                          | (1,036,651  | )
|Effect of recognition of gains/losses  |  |                                          | 2,824,709   |  
|All other investments                  |  |                                          | (555,543    | )
|Deferred tax valuation allowance       |  |                                          | (4,804,618  | )
|                                       |  |                                          |             |  
|                                       |  | $                                        | (10,589,276 | )
|                                       |  |                                          |             |  



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Net change in unrealized appreciation (depreciation) on investments, net of income tax effect, amounted to $(6,792,496)
for the nine months ended September 30, 2007 and was related to our investments as follows:



|                                       |  |                                          |            |  
|-------------------------------------- |  | ---------------------------------------- | ---------- | -
|Company Name                           |  | Net unrealizedAppreciation(Depreciation) |           
|Advanced Refractive Technologies, Inc. |  | $                                        | (826,717   | )
|American Soil Technologies, Inc.       |  |                                          | (664,320   | )
|vidShadow, Inc.                        |  |                                          | (827,789   | )
|Klegg Electronics, Inc.                |  |                                          | (2,741,099 | )
|Industrial Biotechnology Corporation   |  |                                          | (1,242,660 | )
|Emission & Power Supply, Inc.          |  |                                          | (766,589   | )
|Mimedx, Inc.                           |  |                                          | 523,908    |  
|Material Technologies, Inc.            |  |                                          | 1,164,448  |  
|Manakoa Services Corporation           |  |                                          | (876,141   | )
|Cytodyn, Inc.                          |  |                                          | (658,316   | )
|All other investments                  |  |                                          | 122,779    |  
|                                       |  |                                          |            |  
|                                       |  | $                                        | (6,792,496 | )
|                                       |  |                                          |            |  

Liquidity and Capital Resources

At September 30, 2008, we had cash and cash equivalents of $5.6 million. We also had investments in U.S. Treasuries and certificates of deposit (CDs) of $3.2 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.

In prior years, we had
financed substantially all of our operations through the issuance of equity securities and, to a lesser extent, sales of investments, cash received in connection with the provision of technology acquisition alliance and other consulting services and
the use of funds from our investments in U.S. Treasuries and certificates of deposit. Our primary sources of liquidity and capital for the nine months ended September 30, 2008 were $10.0 million received in connection with consulting
operations, $2.0 million received from the repayment of our loan receivable from UTEK Real Estate Holdings, Inc., $1.9 million in proceeds generated from the sale of shares of our portfolio companies and $190,000 in proceeds from the exercise of
stock options.

A portion of our income from operations consists of the sale of technology rights and consulting income from technology acquisition
alliances in exchange for equity securities rather than cash. In the nine months ended September 30, 2008, 30% of our income from operations was paid in the form of equity securities. Of the $15.7 million in income from operations in the nine
months ended September 30, 2008, $11.0 million was received in the form of cash. During the nine months ended September 30, 2008, we used approximately $1.8 million to fund our technology transfer transactions and approximately $15.7
million for operating expenses. Looking forward to the rest of 2008, we expect that our cash generating operations and operating expenses will both increase as a result of our acquisitions. We expect our cash outflow for technology transfer
transactions will be scaled to available cash.

During 2008, we acquired $749,000 in cash in connection with our acquisitions. A substantial portion of
this cash was invested in certificates of deposit.

In May 2008, we obtained a $1,000,000 line of credit with the Bank of Tampa. The advances on the line
of credit accrue interest (payable monthly) at prime (5% as of September 30, 2008). 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. At
September 30, 2008, we had no long-term debt outstanding.

We currently intend to fund our capital expenditures and liquidity needs with existing cash
and cash equivalent balances, our investments in U.S. Treasuries and certificates of deposit, as well as with cash generated by operations and 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. In addition, the sale of our
investments is dependent on market price, which is unpredictable. We may need to scale the number of sales of technology rights to available cash resources in the near term. In addition, we may seek to raise additional funds through public or
private debt or equity financing for long-term liquidity. Additional funds may not be available on favorable terms to us, if at all.



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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 estimates 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. We consider the
following accounting policies and related estimates to be critical:

Valuation Methodology

Currently, we primarily receive cash in connection with our technology acquisition alliance agreements and illiquid securities in connection with our technology
transfers. Historically, we primarily received illiquid securities in connection with both our technology acquisition alliance agreements and technology transfers. The securities received are generally subject to restrictions on resale and generally
are thinly traded or have no established market.

We estimate 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 record
unrealized depreciation on investments when we believe that an investment has become impaired, including where realization of an equity security is doubtful. We 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.

We adopted SFAS 157 on a prospective basis in the first quarter of 2008. SFAS 157 requires us to assume that the portfolio
investment is to be sold in the principal market to market participants, or in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the
principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with SFAS 157, we have considered our principal market, or the market in which we exit our portfolio investments with the
greatest volume and level of activity.

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.

The fair value of our investments at September 30, 2008 and December 31, 2007 was determined by our Board of
Directors. At September 30, 2008 and December 31, 2007, we received valuation assistance from our independent valuation firm, Klaris, Thomson & Schroeder, Inc., on our entire portfolio of investments for which market quotations
were not available.

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 technology acquisition 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

We account for stock option grants in accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 123(R), Share-Based Payment. Under the modified prospective approach of SFAS 123(R), compensation cost recognized during the nine months ended September 30, 2008 and 2007 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).



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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 is
based upon our historical term of options exercised. Historical data was 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 historical dividend yield.

Recently Issued Accounting Pronouncements

In March 2008, the
Financial Accounting Standards Board issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 requires additional disclosures related to the use of derivative instruments, the accounting for
derivatives and the financial statement impact of derivatives. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The adoption of SFAS No. 161 will not have an impact on the Companys
consolidated financial statements.

In April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of
Intangible Assets.FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill
and Other Intangible Assets.FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008 and early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Companys
financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS
No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted
accounting principles in the United States. It is effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. The adoption of this statement is not expected to have a material effect on the Companys financial statements.



|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, 2007.



|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 disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and such that information required to be disclosed 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.

Internal 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 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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PART II. OTHER INFORMATION



|ITEM 1. | Legal Proceedings
|------- | -----------------

Although we may from time to time be involved
in litigation and claims arising out of our operations in the normal course of our business, as of September 30, 2008, 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 10-K for the year ended December 31, 2007.



|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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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: November 7, 2008 |  | /s/ Clifford M. Gross               
|                       |  | Clifford M. Gross, Ph.D.            
|                       |  | Chairman and Chief Executive Officer
|                       | 
|Date: November 7, 2008 |  | /s/ Carole R. Wright                
|                       |  | Carole R. Wright, CPA               
|                       |  | Chief Financial Officer             



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