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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)



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

For the quarterly period ended June 30, 2007



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

Commission File Number 001-15941



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UTEK CORPORATION

(Exact name of
registrant as specified in its charter)



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

2109 Palm Avenue

Tampa, FL 33605

(Address of principal executive offices)

(813) 754-4330

(Registrants
telephone number)

None

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



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

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

Large accelerated filer ̈Accelerated filer  x    Non-accelerated filer ̈

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

On August 3, 2007, there were 9,009,776 shares outstanding of registrants common stock, $0.01 par value.



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UTEK CORPORATION

FORM 10-Q TABLE OF CONTENTS



|                                                                                                               |  |     
|-------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                               |  | Page
|PART I. FINANCIAL INFORMATION                                                                                  |  |     
|Item 1. Financial Statements                                                                                   |  | 3   
|Consolidated Statements of Assets and Liabilities as of June 30, 2007 (unaudited) and December 31, 2006        |  | 3   
|Consolidated Statements of Operations  For the Three and Six Months Ended June 30, 2007 and 2006 (unaudited)  |  | 4   
|Consolidated Statements of Cash Flows  For the Six Months Ended June 30, 2007 and 2006 (unaudited)            |  | 5   
|Consolidated Statements of Changes in Net Assets  For the Six Months Ended June 30, 2007 and 2006 (unaudited) |  | 6   
|Financial Highlights For the Six Months Ended June 30, 2007 and 2006 (unaudited)                               |  | 7   
|Schedule of Investments as of June 30, 2007 (unaudited) and December 31, 2006                                  |  | 8   
|Notes to Consolidated Financial Statements (unaudited)                                                         |  | 18  
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                  |  | 26  
|Item 3. Quantitative and Qualitative Disclosures about Market Risks                                            |  | 36  
|Item 4. Controls and Procedures                                                                                |  | 37  
|                                                                                                               | 
|PART II. OTHER INFORMATION                                                                                     |  |     
|Item 1. Legal Proceedings                                                                                      |  | 37  
|Item 1A. Risk Factors                                                                                          |  | 37  
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                            |  | 37  
|Item 3. Defaults Upon Senior Securities                                                                        |  | 37  
|Item 4. Submission of Matters to a Vote of Security Holders                                                    |  | 37  
|Item 5. Other Information                                                                                      |  | 38  
|Item 6. Exhibits                                                                                               |  | 38  
|Signatures                                                                                                     |  | 39  
|Exhibits                                                                                                       |  |     



Page 2 of 39



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PART I. FINANCIAL INFORMATION

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

UTEK Corporation

Consolidated Statements of Assets and Liabilities



|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                                                                      |  | June 30, 2007 |             |   | December 31, 2006 |  
|                                                                                                                                                                                      |  | (Unaudited)   |             |   |                   |  
|ASSETS                                                                                                                                                                                |  |               |             |   |                   |   |             |  
|Investments:                                                                                                                                                                          |  |               |             |   |                   |   |             |  
|Non-affiliate investments (cost: 2007$35,945,750; 2006$41,786,374)                                                                                                                  |  | $             | 9,662,700   |   |                   | $ | 14,578,700  |  
|Affiliate investments (cost: 2007$41,191,979; 2006$22,354,448)                                                                                                                      |  |               | 14,607,300  |   |                   |   | 8,713,900   |  
|Control investments (cost: 2007$12,521,780; 2006$15,485,318)                                                                                                                        |  |               | 7,798,732   |   |                   |   | 10,001,772  |  
|U.S. Treasuries and certificates of deposit (cost: 2007  $2,090,172; 2006 $4,584,651)                                                                                               |  |               | 2,090,172   |   |                   |   | 4,584,651   |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|Total investments                                                                                                                                                                     |  |               | 34,158,904  |   |                   |   | 37,879,023  |  
|Cash and cash equivalents                                                                                                                                                             |  |               | 7,725,341   |   |                   |   | 9,685,111   |  
|Accounts receivable, net of allowance for bad debt (2007$29,000; 2006 $38,000)                                                                                                      |  |               | 517,534     |   |                   |   | 534,605     |  
|Prepaid expenses and other assets                                                                                                                                                     |  |               | 321,009     |   |                   |   | 375,007     |  
|Fixed assets, net                                                                                                                                                                     |  |               | 539,665     |   |                   |   | 595,001     |  
|Goodwill                                                                                                                                                                              |  |               | 3,001,286   |   |                   |   | 3,021,163   |  
|Intangible assets, net                                                                                                                                                                |  |               | 154,002     |   |                   |   | 190,100     |  
|Deferred tax asset                                                                                                                                                                    |  |               | 2,801,886   |   |                   |   | 760,800     |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|TOTAL ASSETS                                                                                                                                                                          |  |               | 49,219,627  |   |                   |   | 53,040,810  |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|LIABILITIES                                                                                                                                                                           |  |               |             |   |                   |   |             |  
|Accrued expenses                                                                                                                                                                      |  |               | 454,997     |   |                   |   | 595,764     |  
|Deferred revenue                                                                                                                                                                      |  |               | 979,108     |   |                   |   | 1,463,884   |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|TOTAL LIABILITIES                                                                                                                                                                     |  |               | 1,434,105   |   |                   |   | 2,059,648   |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|NET ASSETS                                                                                                                                                                            |  | $             | 47,785,522  |   |                   | $ | 50,981,162  |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|Commitments and Contingencies                                                                                                                                                         |  |               |             |   |                   |   |             |  
|Composition of net assets:                                                                                                                                                            |  |               |             |   |                   |   |             |  
|Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued and outstanding                                                                                             |  |               |            |   |                   |   |            |  
|Common stock, $.01 par value, 19,000,000 shares authorized; 9,009,776 shares issued and outstanding at June 30, 2007 and 8,936,009 shares
issued and outstanding at December 31, 2006 |  | $             | 90,099      |   |                   | $ | 89,361      |  
|Additional paid-in capital                                                                                                                                                            |  |               | 52,791,774  |   |                   |   | 51,993,822  |  
|Accumulated income:                                                                                                                                                                   |  |               |             |   |                   |   |             |  
|Accumulated net operating income                                                                                                                                                      |  |               | 33,890,588  |   |                   |   | 29,721,366  |  
|Net realized loss on investments, net of income taxes                                                                                                                                 |  |               | (3,203,498  | ) |                   |   | (2,065,218  | )
|Net unrealized depreciation of investments, net of deferred income taxes                                                                                                              |  |               | (35,919,370 | ) |                   |   | (28,897,125 | )
|Foreign currency translation adjustment                                                                                                                                               |  |               | 135,929     |   |                   |   | 138,956     |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|Net assets                                                                                                                                                                            |  | $             | 47,785,522  |   |                   | $ | 50,981,162  |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  
|Net asset value per share                                                                                                                                                             |  | $             | 5.30        |   |                   | $ | 5.71        |  
|                                                                                                                                                                                      |  |               |             |   |                   |   |             |  

See accompanying notes



Page 3 of 39



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UTEK Corporation

Consolidated Statements of Operations

(Unaudited)



|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ---------- | - | ------------------------ | - | ---------- | ---- |  | - | ---------- | - |  | - | ----------
|                                                                                                                                                                                                                                                                                                   |  | Three Months Ended June 30 |            |   | Six Months Ended June 30
|                                                                                                                                                                                                                                                                                                   |  | 2007                       |            |   | 2006                     |   |            | 2007 |  |   | 2006      
|Income from operations:                                                                                                                                                                                                                                                                            |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Sale of technology rights                                                                                                                                                                                                                                                                          |  | $                          | 5,213,410  |   |                          | $ | 21,624,267 |      |  | $ | 11,914,750 |   |  | $ | 31,839,197
|Consulting and other services                                                                                                                                                                                                                                                                      |  |                            | 1,022,048  |   |                          |   | 1,192,843  |      |  |   | 2,068,765  |   |  |   | 2,546,324 
|Investment income, net                                                                                                                                                                                                                                                                             |  |                            | 152,991    |   |                          |   | 242,197    |      |  |   | 352,705    |   |  |   | 480,792   
|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|                                                                                                                                                                                                                                                                                                   |  |                            | 6,388,449  |   |                          |   | 23,059,307 |      |  |   | 14,336,220 |   |  |   | 34,866,313
|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Expenses:                                                                                                                                                                                                                                                                                          |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Acquisition of technology rights                                                                                                                                                                                                                                                                   |  |                            | 1,030,000  |   |                          |   | 4,523,127  |      |  |   | 2,333,279  |   |  |   | 7,147,127 
|Salaries and wages                                                                                                                                                                                                                                                                                 |  |                            | 804,966    |   |                          |   | 956,830    |      |  |   | 1,774,307  |   |  |   | 1,703,302 
|Professional fees                                                                                                                                                                                                                                                                                  |  |                            | 292,161    |   |                          |   | 301,870    |      |  |   | 614,108    |   |  |   | 583,296   
|Sales and marketing                                                                                                                                                                                                                                                                                |  |                            | 458,299    |   |                          |   | 935,850    |      |  |   | 1,090,278  |   |  |   | 1,764,088 
|General and administrative                                                                                                                                                                                                                                                                         |  |                            | 607,744    |   |                          |   | 767,646    |      |  |   | 1,439,553  |   |  |   | 2,072,221 
|Goodwill impairment                                                                                                                                                                                                                                                                                |  |                            |           |   |                          |   |           |      |  |   | 33,030     |   |  |   | 234,940   
|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|                                                                                                                                                                                                                                                                                                   |  |                            | 3,193,170  |   |                          |   | 7,485,323  |      |  |   | 7,284,555  |   |  |   | 13,504,974
|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Income before income taxes                                                                                                                                                                                                                                                                         |  |                            | 3,195,279  |   |                          |   | 15,573,984 |      |  |   | 7,051,665  |   |  |   | 21,361,339
|Provision for income taxes                                                                                                                                                                                                                                                                         |  |                            | 1,259,448  |   |                          |   | 5,806,628  |      |  |   | 2,882,443  |   |  |   | 7,984,409 
|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Net income from operations                                                                                                                                                                                                                                                                         |  |                            | 1,935,831  |   |                          |   | 9,767,356  |      |  |   | 4,169,222  |   |  |   | 13,376,930
|                                                                                                                                                                                                                                                                                                   |  |                            |            |  
|Net realized and unrealized gains (losses):                                                                                                                                                                                                                                                        |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Net realized gain (loss) on investments, net of income tax expense (benefit) of ($24,524) and ($686,764) for the three and six months ended
June 30, 2007, respectively, and $1,103,928 and $1,334,756 for the three and six months ended June 30, 2006, respectively                              |  |                            | (40,648    | ) |                          |   | 1,829,711  |      |  |   | (1,138,280 | ) |  |   | 2,212,297 
|Change in unrealized appreciation (depreciation) of investments, net of deferred tax expense (benefit) of ($3,306,225) and ($4,236,765) for
the three and six months ended June 30, 2007, respectively, and ($324,261) and $619,938 for the three and six months ended June 30, 2006, respectively |  |                            | (5,479,917 | ) |                          |   | (537,448   | )    |  |   | (7,022,245 | ) |  |   | 1,027,518 
|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Net increase (decrease) in net assets from operations                                                                                                                                                                                                                                              |  | $                          | (3,584,734 | ) |                          | $ | 11,059,619 |      |  | $ | (3,991,303 | ) |  | $ | 16,616,745
|                                                                                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Net increase (decrease) in net assets from operations per share:                                                                                                                                                                                                                                   |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Basic                                                                                                                                                                                                                                                                                              |  | $                          | (0.40      | ) |                          | $ | 1.25       |      |  | $ | (0.45      | ) |  | $ | 1.92      
|Diluted                                                                                                                                                                                                                                                                                            |  | $                          | (0.40      | ) |                          | $ | 1.23       |      |  | $ | (0.45      | ) |  | $ | 1.90      
|Weighted average shares:                                                                                                                                                                                                                                                                           |  |                            |            |   |                          |   |            |      |  |   |            |   |  |   |           
|Basic                                                                                                                                                                                                                                                                                              |  |                            | 8,997,538  |   |                          |   | 8,871,871  |      |  |   | 8,968,152  |   |  |   | 8,663,083 
|Diluted                                                                                                                                                                                                                                                                                            |  |                            | 8,997,538  |   |                          |   | 8,997,310  |      |  |   | 8,968,152  |   |  |   | 8,759,178 
|Dividend declared per share:                                                                                                                                                                                                                                                                       |  |                            |           |   |                          |   |           |      |  |   |           |   |  | $ | .02       

See accompanying notes



Page 4 of 39



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UTEK Corporation

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                                                            |  |                          |             |   |      |   |             |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ----------- | - | ---- | - | ----------- | -
|                                                                                                                            |  | Six Months Ended June 30 |            
|                                                                                                                            |  | 2007                     |             |   | 2006 |  
|Operating Activities:                                                                                                       |  |                          |             |   |      |   |             |  
|Net increase (decrease) in net assets from operations                                                                       |  | $                        | (3,991,303  | ) |      | $ | 16,616,745  |  
|Adjustments to reconcile net increase (decrease) in net assets from operations to net cash flows from operating activities: |  |                          |             |   |      |   |             |  
|Change in net unrealized (appreciation) depreciation of investments                                                         |  |                          | 11,259,011  |   |      |   | (1,647,456  | )
|Depreciation and amortization                                                                                               |  |                          | 109,468     |   |      |   | 97,714      |  
|Goodwill impairment                                                                                                         |  |                          | 33,030      |   |      |   | 234,940     |  
|(Gain) loss on sale of investments                                                                                          |  |                          | 1,825,044   |   |      |   | (3,547,053  | )
|Loss on disposal of fixed assets                                                                                            |  |                          | 14,360      |   |      |   | 13,555      |  
|Bad debt expense                                                                                                            |  |                          | 110,011     |   |      |   | 75,797      |  
|Share-based compensation                                                                                                    |  |                          | 275,598     |   |      |   | 221,555     |  
|Deferred income taxes                                                                                                       |  |                          | (2,041,086  | ) |      |   | 9,939,104   |  
|Investment securities received in connection with the sale of technology rights                                             |  |                          | (11,714,750 | ) |      |   | (31,839,197 | )
|Consulting and other services rendered in exchange for investment securities                                                |  |                          | (757,269    | ) |      |   | (892,452    | )
|Changes in operating assets and liabilities:                                                                                |  |                          |             |   |      |   |             |  
|Accounts receivable                                                                                                         |  |                          | 41,940      |   |      |   | 46,482      |  
|Prepaid expenses and other assets                                                                                           |  |                          | 53,998      |   |      |   | 166,279     |  
|Deferred revenue                                                                                                            |  |                          | (124,769    | ) |      |   | 151,904     |  
|Accrued expenses                                                                                                            |  |                          | 25,113      |   |      |   | 313,188     |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Net cash flows from operating activities                                                                                    |  |                          | (4,881,604  | ) |      |   | (10,048,895 | )
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Investing Activities:                                                                                                       |  |                          |             |   |      |   |             |  
|Acquisition of 22ndStreet of Ybor City, Inc.                                                                                |  |                          |            |   |      |   | (1,000,000  | )
|Net sales (purchases) of short-term investments                                                                             |  |                          | 2,494,479   |   |      |   | (2,680,873  | )
|Proceeds received from sale of equity investments                                                                           |  |                          | 821,276     |   |      |   | 6,116,428   |  
|Investment in UTEK Real Estate Holdings, Inc.                                                                               |  |                          | (702,560    | ) |      |   | (870,249    | )
|Purchases of fixed assets                                                                                                   |  |                          | (32,394     | ) |      |   | (239,574    | )
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Net cash flows from investing activities                                                                                    |  |                          | 2,580,801   |   |      |   | 1,325,732   |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Financing Activities:                                                                                                       |  |                          |             |   |      |   |             |  
|Distributions to stockholders                                                                                               |  |                          | (179,032    | ) |      |   | (177,865    | )
|Net proceeds from issuance of common stock                                                                                  |  |                          |            |   |      |   | 8,955,182   |  
|Proceeds from exercise of stock options                                                                                     |  |                          | 523,091     |   |      |   | 276,104     |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Net cash flows from financing activities                                                                                    |  |                          | 344,059     |   |      |   | 9,053,421   |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Foreign currency translation adjustment                                                                                     |  |                          | (3,026      | ) |      |   | 107,957     |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Increase (decrease) in cash and cash equivalents                                                                            |  |                          | (1,959,770  | ) |      |   | 438,215     |  
|Cash and cash equivalents at beginning of year                                                                              |  |                          | 9,685,111   |   |      |   | 5,275,626   |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Cash and cash equivalents at end of period                                                                                  |  | $                        | 7,725,341   |   |      | $ | 5,713,841   |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Supplemental Disclosures of Non-Cash Investing Activities                                                                   |  |                          |             |   |      |   |             |  
|The Company issued 82,919 shares of common stock to purchase 22nd Street of Ybor City,
Inc.                                 |  |                          |            |   |      | $ | 1,000,000   |  
|                                                                                                                            |  |                          |             |   |      |   |             |  
|Investment securities received for unearned strategic alliance services                                                     |  | $                        | 280,463     |   |      | $ | 1,464,522   |  
|                                                                                                                            |  |                          |             |   |      |   |             |  

See accompanying notes



Page 5 of 39



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UTEK Corporation

Consolidated Statements of Changes in Net Assets

(Unaudited)



|                                                                                                                   |  |                          |            |   |      |   |            |  
|------------------------------------------------------------------------------------------------------------------ |  | ------------------------ | ---------- | - | ---- | - | ---------- | -
|                                                                                                                   |  | Six Months Ended June 30 |           
|                                                                                                                   |  | 2007                     |            |   | 2006 |  
|Changes in net assets from operations:                                                                             |  |                          |            |   |      |   |            |  
|Net income from operations                                                                                         |  | $                        | 4,169,222  |   |      | $ | 13,376,930 |  
|Net realized gain (loss) on sale of investments, net of related income taxes                                       |  |                          | (1,138,280 | ) |      |   | 2,212,297  |  
|Change in net unrealized appreciation (depreciation) of investments, net of related deferred taxes                 |  |                          | (7,022,245 | ) |      |   | 1,027,518  |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Net increase (decrease) in net assets from operations                                                              |  |                          | (3,991,303 | ) |      |   | 16,616,745 |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Distribution to stockholders:                                                                                      |  |                          |            |   |      |   |            |  
|From net income from operations (1)                                                                                |  |                          |           |   |      |   | (177,865   | )
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Capital stock transactions:                                                                                        |  |                          |            |   |      |   |            |  
|Proceeds from issuance of common stock, net of offering costs of $1,044,860 for the six months ended June 30, 2006 |  |                          |           |   |      |   | 8,955,182  |  
|Proceeds from the exercise of stock options                                                                        |  |                          | 523,091    |   |      |   | 276,104    |  
|Share-based compensation                                                                                           |  |                          | 275,598    |   |      |   | 221,555    |  
|Common stock issued in acquisition of 22ndStreet of Ybor City, Inc.                                                |  |                          |           |   |      |   | 1,000,000  |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Net increase in net assets from capital stock transactions                                                         |  |                          | 798,689    |   |      |   | 10,452,841 |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Foreign currency translation adjustment                                                                            |  |                          | (3,026     | ) |      |   | 107,957    |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Net increase (decrease) in net assets                                                                              |  |                          | (3,195,640 | ) |      |   | 26,999,678 |  
|Net assets at beginning of year                                                                                    |  |                          | 50,981,162 |   |      |   | 44,441,118 |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Net assets at end of period                                                                                        |  | $                        | 47,785,522 |   |      | $ | 71,440,796 |  
|                                                                                                                   |  |                          |            |   |      |   |            |  



---

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

See accompanying notes



Page 6 of 39



---

UTEK Corporation

Financial Highlights

(Unaudited)



|                                                                                                                   |  |                          |            |   |      |   |            |  
|------------------------------------------------------------------------------------------------------------------ |  | ------------------------ | ---------- | - | ---- | - | ---------- | -
|                                                                                                                   |  | Six Months Ended June 30 |           
|                                                                                                                   |  | 2007                     |            |   | 2006 |  
|PER SHARE INFORMATION                                                                                              |  |                          |            |   |      |   |            |  
|Net asset value, beginning of period                                                                               |  | $                        | 5.71       |   |      | $ | 5.58       |  
|Net income from operations (1)                                                                                     |  |                          | 0.46       |   |      |   | 1.53       |  
|Net change in realized gains (losses) and unrealized appreciation (depreciation) on investments, (after taxes) (2) |  |                          | (0.96      | ) |      |   | (0.26      | )
|Foreign currency translation adjustment (1)                                                                        |  |                          | (0.00      | ) |      |   | 0.01       |  
|Net increase from stock transactions (1)                                                                           |  |                          | 0.09       |   |      |   | 1.19       |  
|Distribution to shareholders from net income from operations (3)                                                   |  |                          |           |   |      |   | (0.02      | )
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Net asset value, end of period                                                                                     |  | $                        | 5.30       |   |      | $ | 8.03       |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Per share market value, end of period                                                                              |  | $                        | 14.30      |   |      | $ | 20.05      |  
|                                                                                                                   |  |                          |            |   |      |   |            |  
|Investment return, based on market price at end of period                                                          |  |                          | 26         | % |      |   | 45         | %
|                                                                                                                   |  |                          |            |   |      |   |            |  
|RATIOS/SUPPLEMENTAL DATA                                                                                           |  |                          |            |   |      |   |            |  
|Net assets, end of period                                                                                          |  | $                        | 47,785,522 |   |      | $ | 71,440,796 |  
|Ratio of expenses to average net assets                                                                            |  |                          | 15         | % |      |   | 23         | %
|Ratio of net income from operations to average net assets                                                          |  |                          | 8          | % |      |   | 23         | %
|Diluted weighted average number of shares outstanding during the period                                            |  |                          | 8,968,152  |   |      |   | 8,759,178  |  



---

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

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

|(3) | Distribution to shareholders as noted in the Consolidated Statement of Cash Flows for the six months ended June 30, 2007 was included in net income from operations for a prior
period; therefore, it is not reflected as a distribution to shareholders for purposes of this schedule.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes



Page 7 of 39



---

UTEK CORPORATION

Schedule of Investments June 30, 2007

(unaudited)



|          |   |  |                            |  |                                                   |  |                     |           |       |   |                          |  |      |  
|--------- | - |  | -------------------------- |  | ------------------------------------------------- |  | ------------------- | --------- | ----- | - | ------------------------ |  | ---- | -
|Shares    |   |  | Initial Dateof Acquisition |  |                                                   |  | Original Cost Basis |           | Value |   | Percentage of Net Assets | 
|          |   |  |                            | 
|          |   |  |                            |  |                                                  
|          |   |  |                            |  | Non-Affiliate Investments (1)                     |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  |                                                  
|          |   |  |                            |  | Advanced Refractive Technologies, Inc.            |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Ophthalmic technologies                           |  |                     |           |       |   |                          |  |      |  
|100,000   |   |  | 4/06                       |  | Series D Preferred Stock                          |  | $                   | 1,996,176 |       | $ | 1,120,000                |  | 2.3  | %
|97,000    |   |  | 3/06                       |  | Series C Preferred Stock                          |  |                     | 2,066,063 |       |   | 1,086,000                |  | 2.3  |  
|97,000    |   |  | 12/05                      |  | Series B Preferred Stock                          |  |                     | 1,032,675 |       |   | 565,000                  |  | 1.2  |  
|4,000,000 |   |  | 5/05                       |  | Common Stock                                      |  |                     | 76,368    |       |   | 11,200                   |  | <0.1 |  
|          |   |  |                            |  | World Energy Solutions, Inc.                      |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Energy saving technologies                        |  |                     |           |       |   |                          |  |      |  
|100,000   |   |  | 10/06                      |  | Series A Preferred Stock                          |  |                     | 2,632,500 |       |   | 2,633,000                |  | 5.5  |  
|201,672   |   |  | 9/05                       |  | Common Stock                                      |  |                     | 127,714   |       |   | 134,100                  |  | 0.3  |  
|          |   |  |                            |  | Advanced Medical Isotope Corporation (11)         |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Development of isotopes to treat diseases         |  |                     |           |       |   |                          |  |      |  
|95,000    |   |  | 9/06                       |  | Preferred Stock                                   |  |                     | 1,803,417 |       |   | 1,432,100                |  | 3.0  |  
|600,000   |   |  | 5/06                       |  | Common Stock                                      |  |                     | 63,000    |       |   | 289,800                  |  | 0.6  |  
|903,860   |   |  | 8/05                       |  | Broadcast International, Inc.                     |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Telecommunications                                |  |                     | 1,093,671 |       |   | 845,100                  |  | 1.8  |  
|2,560,000 |   |  | 8/04                       |  | TenthGate, Inc. (8)                               |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Healthcare related products and services          |  |                     | 40,000    |       |   | 663,000                  |  | 1.4  |  
|60,000    |   |  | 12/05                      |  | Metamorphix Global, Inc. (privately held) (12)    |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Design and manufacture of countertops             |  |                     | 120,000   |       |   | 120,000                  |  | 0.3  |  
|40,000    |   |  | 7/06                       |  | Bacterin International(privately held)            |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Bioactive coatings for medical devices            |  |                     | 120,000   |       |   | 120,000                  |  | 0.3  |  
|171,432   |   |  | 10/06                      |  | GammaCan International, Inc.                      |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Anti-cancer immunotherapy                         |  |                     | 83,016    |       |   | 71,300                   |  | 0.1  |  
|33,825    |   |  | 5/05                       |  | XLER8, Inc. (Vitacube Systems, Inc.)              |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Specialty nutraceuticals                          |  |                     | 16,427    |       |   | 61,100                   |  | 0.1  |  
|78,500    |   |  | 4/05                       |  | Rival Technologies, Inc.                          |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Diesel engine technologies                        |  |                     | 53,710    |       |   | 58,900                   |  | 0.1  |  
|120,000   |   |  | 1/07                       |  | NeoStem, Inc.                                     |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Stem cell banking services                        |  |                     | 61,440    |       |   | 54,100                   |  | 0.1  |  
|(7        | ) |  | 4/07                       |  | Synthetic Blood International, Inc.               |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Biotechnology products                            |  |                     | 120,000   |       |   | 45,000                   |  | 0.1  |  
|176,250   |   |  | 4/05                       |  | Maelor Plc(5)                                     |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Products for niche healthcare applications        |  |                     | 24,147    |       |   | 43,000                   |  | 0.1  |  
|180,000   |   |  | 5/06                       |  | U.S. Starcom, Inc.                                |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Communications services and products              |  |                     | 17,181    |       |   | 40,500                   |  | 0.1  |  
|109,091   |   |  | 7/06                       |  | Turbine Truck Engines, Inc.                       |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Heavy-duty highway truck engines                  |  |                     | 72,000    |       |   | 37,100                   |  | 0.1  |  
|825,852   |   |  | 7/06                       |  | MM2 Group, Inc.                                   |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Financial consulting for nutraceuticals           |  |                     | 32,685    |       |   | 33,000                   |  | 0.1  |  
|208,333   |   |  | 1/07                       |  | Ecosphere Technologies, Inc.                      |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Defense, homeland security and global ship repair |  |                     | 83,300    |       |   | 31,700                   |  | 0.1  |  
|185,000   |   |  | 4/04                       |  | Power3 Medical Products, Inc.                     |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Healthcare products                               |  |                     | 151,873   |       |   | 31,600                   |  | 0.1  |  
|697,860   |   |  | 8/06                       |  | Magnitude Information Systems, Inc.               |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Computer ergonomics                               |  |                     | 25,920    |       |   | 26,700                   |  | 0.1  |  
|258,064   |   |  | 5/06                       |  | IPORUSSIA, Inc.                                   |  |                     |           |       |   |                          |  |      |  
|          |   |  |                            |  | Business advisory services provider               |  |                     | 24,000    |       |   | 25,200                   |  | 0.1  |  
|9,748     |   |  | 4/04                       |  | Xethanol Corporation(12)                          |  |                     | 88,836    |       |   | 14,700                   |  | <0.1 |  
|          |   |  |                            |  | Bioethanol and derivative products                |  |                     |           |       |   |                          |  |      |  



Page 8 of 39



---

|           |  |       |  |                                                     |  |   |            |  |   |           |  |      |  
|---------- |  | ----- |  | --------------------------------------------------- |  | - | ---------- |  | - | --------- |  | ---- | -
|660,000    |  | 6/05  |  | BP International, Inc.                              |  |   |            |  |   |           |  |      |  
|           |  |       |  | Shade structures                                    |  |   | 78,852     |  |   | 12,700    |  | <0.1 |  
|269,230    |  | 8/06  |  | Protocall Technologies, Inc.                        |  |   |            |  |   |           |  |      |  
|           |  |       |  | On-demand software and entertainment                |  |   | 11,577     |  |   | 9,200     |  | <0.1 |  
|1,200,000  |  | 10/06 |  | Laserlock Technologies, Inc.                        |  |   |            |  |   |           |  |      |  
|           |  |       |  | Security solutions for the gaming industry          |  |   | 24,100     |  |   | 8,600     |  | <0.1 |  
|785,000    |  | 3/04  |  | Swiss Medica, Inc.                                  |  |   |            |  |   |           |  |      |  
|           |  |       |  | Health bioscience products                          |  |   | 128,348    |  |   | 6,400     |  | <0.1 |  
|808,529    |  | 4/04  |  | HydroFlo, Inc.                                      |  |   |            |  |   |           |  |      |  
|           |  |       |  | Treatment and purification of water                 |  |   | 125,861    |  |   | 6,200     |  | <0.1 |  
|2,011,765  |  | 5/06  |  | Rheologics, Inc.                                    |  |   |            |  |   |           |  |      |  
|           |  |       |  | Study of blood viscosity                            |  |   | 86,100     |  |   | 5,200     |  | <0.1 |  
|1,250,010  |  | 5/06  |  | In Veritas Medical Diagnostics, Inc.                |  |   |            |  |   |           |  |      |  
|           |  |       |  | Medical devices designs and testing                 |  |   | 74,400     |  |   | 4,400     |  | <0.1 |  
|384,000    |  | 7/06  |  | aeroTelesis, Inc.                                   |  |   |            |  |   |           |  |      |  
|           |  |       |  | Satellite and wireless bandwidth utilization        |  |   | 33,394     |  |   | 3,300     |  | <0.1 |  
|387,097    |  | 6/06  |  | Tradequest International, Inc.                      |  |   |            |  |   |           |  |      |  
|           |  |       |  | Provider of voice over internet protocol            |  |   | 76,092     |  |   | 3,100     |  | <0.1 |  
|666,668    |  | 9/05  |  | Quest Minerals & Mining Corporation                 |  |   |            |  |   |           |  |      |  
|           |  |       |  | Coal and mineral mining                             |  |   | 69,044     |  |   | 2,700     |  | <0.1 |  
|122,449    |  | 1/06  |  | 5G Wireless Communications, Inc.                    |  |   |            |  |   |           |  |      |  
|           |  |       |  | Broadband wireless                                  |  |   | 78,851     |  |   | 2,200     |  | <0.1 |  
|781,703    |  | 3/04  |  | Health Sciences Group, Inc. (8)                     |  |   |            |  |   |           |  |      |  
|           |  |       |  | Nutraceutical and pharmaceutical products           |  |   | 570,643    |  |   | 2,100     |  | <0.1 |  
|232,211    |  | 5/05  |  | Preservation Sciences, Inc.                         |  |   |            |  |   |           |  |      |  
|           |  |       |  | Metal and concrete coatings                         |  |   |           |  |   | 1,800     |  | <0.1 |  
|750,000    |  | 10/04 |  | U.S. Wireless Online, Inc.                          |  |   |            |  |   |           |  |      |  
|           |  |       |  | Wireless broadband networks                         |  |   | 66,000     |  |   | 700       |  | <0.1 |  
|85,714     |  | 9/05  |  | New Life Scientific, Inc.                           |  |   |            |  |   |           |  |      |  
|           |  |       |  | Pharmaceutical biotechnologies                      |  |   | 81,816     |  |   | 400       |  | <0.1 |  
|37,500     |  | 6/05  |  | Modern Technology Corporation                       |  |   |            |  |   |           |  |      |  
|           |  |       |  | Technology development and acquisition company      |  |   | 82,152     |  |   | 300       |  | <0.1 |  
|105,600    |  | 5/06  |  | HumWare Media Corporation                           |  |   |            |  |   |           |  |      |  
|           |  |       |  | Media advertising                                   |  |   | 14,236     |  |   | 200       |  | <0.1 |  
|560,000    |  | 1/07  |  | Mimedx, Inc. (privately held)                       |  |   |            |  |   |           |  |      |  
|           |  |       |  | Connective tissue technology                        |  |   |           |  |   |          |  | 0.0  |  
|           |  |       |  | UBA Technology, Inc.                                |  |   |            |  |   |           |  |      |  
|           |  |       |  | Software development                                |  |   |            |  |   |           |  |      |  
|2,482,521  |  | 2/06  |  | Common Stock                                        |  |   | 1,691,419  |  |   |          |  | 0.0  |  
|95,000     |  | 4/06  |  | Series A Convertible Preferred Stock                |  |   | 1,619,849  |  |   |          |  | 0.0  |  
|140,000    |  | 3/05  |  | AdAl Group, Inc. (5)                                |  |   |            |  |   |           |  |      |  
|           |  |       |  | Aluminum extruded products manufacturer             |  |   | 72,912     |  |   |          |  | 0.0  |  
|7,787,565  |  | 6/05  |  | Trio Industries Group, Inc.                         |  |   |            |  |   |           |  |      |  
|           |  |       |  | Protective powder coating                           |  |   | 12,330,401 |  |   |          |  | 0.0  |  
|           |  |       |  | KP Renewables Plc (Kwikpower International Plc) (5) |  |   |            |  |   |           |  |      |  
|           |  |       |  | Renewable energy                                    |  |   |            |  |   |           |  |      |  
|           |  | 5/06  |  | Convertible Debenture, due 5/10/07                  |  |   | 4,433,401  |  |   |          |  | 0.0  |  
|           |  | 9/05  |  | Convertible Debenture, due 9/30/06                  |  |   | 1,884,920  |  |   |          |  | 0.0  |  
|2,500      |  | 3/05  |  | Common Stock                                        |  |   | 94,500     |  |   |          |  | 0.0  |  
|261,234    |  | 7/04  |  | eLinear, Inc. (5)                                   |  |   |            |  |   |           |  |      |  
|           |  |       |  | Telecommunication security provider                 |  |   | 190,763    |  |   |          |  | 0.0  |  
|           |  |       |  |                                                     |  |   |            |  |   |           |  |      |  
|           |  |       |  | Total Investments in Non-Affiliates                 |  | $ | 35,945,750 |  | $ | 9,662,700 |  | 20.3 | %
|           |  |       |  |                                                     |  |   |            |  |   |           |  |      |  
|           |  |       |  |                                                     | 
|           |  |       |  | Affiliate Investments (2)                           |  |   |            |  |   |           |  |      |  
|           |  |       |  |                                                     | 
|           |  |       |  | Material Technologies, Inc. (9)                     |  |   |            |  |   |           |  |      |  
|           |  |       |  | Metal fatigue detection                             |  |   |            |  |   |           |  |      |  
|20,550,304 |  | 9/04  |  | Common Stock                                        |  | $ | 4,907,329  |  | $ | 4,726,600 |  | 9.9  |  
|47,500     |  | 1/07  |  | Series E Convertible Preferred Stock                |  |   | 694,640    |  |   | 555,800   |  | 1.1  |  



Page 9 of 39



---

|            |  |       |  |                                                         |  |   |            |  |   |            |  |      |  
|----------- |  | ----- |  | ------------------------------------------------------- |  | - | ---------- |  | - | ---------- |  | ---- | -
|            |  |       |  | Cyberlux Corporation (9)                                |  |   |            |  |   |            |  |      |  
|            |  |       |  | LED lighting solutions                                  |  |   |            |  |   |            |  |      |  
|148,000     |  | 11/06 |  | Series C Preferred Stock                                |  |   | 2,181,640  |  |   | 1,781,000  |  | 3.7  |  
|27,981,484  |  | 6/06  |  | Common Stock                                            |  |   | 537,920    |  |   | 121,700    |  | 0.3  |  
|            |  |       |  | Fuel FX International, Inc. (privately held)            |  |   |            |  |   |            |  |      |  
|            |  |       |  | Reductional environmental emissions                     |  |   |            |  |   |            |  |      |  
|100,000     |  | 1/06  |  | Series B Preferred Stock                                |  |   | 2,100,000  |  |   | 840,000    |  | 1.7  |  
|9,900,717   |  | 4/05  |  | Common Stock                                            |  |   | 1,980,142  |  |   | 752,500    |  | 1.6  |  
|            |  |       |  | Manakoa Services Company (11)                           |  |   |            |  |   |            |  |      |  
|            |  |       |  | Compliance analysis and monitoring                      |  |   |            |  |   |            |  |      |  
|95,000      |  | 1/07  |  | Series B Preferred Stock                                |  |   | 2,280,000  |  |   | 1,140,000  |  | 2.4  |  
|7,799,515   |  | 4/04  |  | Common Stock                                            |  |   | 2,122,641  |  |   | 160,600    |  | 0.3  |  
|            |  |       |  | CytoDyn, Inc.                                           |  |   |            |  |   |            |  |      |  
|            |  |       |  | Development stage biotechnology company                 |  |   |            |  |   |            |  |      |  
|2,040,000   |  | 4/06  |  | Common Stock                                            |  |   | 3,640,772  |  |   | 673,200    |  | 1.4  |  
|100,000     |  | 1/07  |  | Series A Preferred Stock                                |  |   | 845,000    |  |   | 585,000    |  | 1.2  |  
|3,620,307   |  | 5/06  |  | Avalon Oil and Gas, Inc.                                |  |   | 2,854,089  |  |   | 1,035,400  |  | 2.2  |  
|            |  |       |  | Oil and gas producers                                   |  |   |            |  |   |            |  |      |  
|6,909,690   |  | 9/05  |  | American Soil Technologies,Inc. (9)                     |  |   | 1,622,672  |  |   | 943,200    |  | 2.0  |  
|            |  |       |  | Fertilizer innovation                                   |  |   |            |  |   |            |  |      |  
|164,495,817 |  | 8/06  |  | Cargo Connection Logistics Holdings, Inc.               |  |   | 1,026,031  |  |   | 331,500    |  | 0.7  |  
|            |  |       |  | World trade logistics                                   |  |   |            |  |   |            |  |      |  
|7,165,000   |  | 5/06  |  | NetFabric Holdings, Inc.                                |  |   | 608,694    |  |   | 322,400    |  | 0.7  |  
|            |  |       |  | Information technology services                         |  |   |            |  |   |            |  |      |  
|461,222,608 |  | 9/05  |  | GS Energy Corporation (INSEQ Corp.)                     |  |   | 2,434,783  |  |   | 304,400    |  | 0.6  |  
|            |  |       |  | Waste minimization                                      |  |   |            |  |   |            |  |      |  
|33,730,000  |  | 4/05  |  | WebSky, Inc.                                            |  |   | 897,750    |  |   | 237,800    |  | 0.5  |  
|            |  |       |  | Broadband wireless                                      |  |   |            |  |   |            |  |      |  
|4,221,165   |  | 4/01  |  | Stealth MediaLabs, Inc.                                 |  |   | 1,708,000  |  |   | 63,300     |  | 0.1  |  
|            |  |       |  | Software products                                       |  |   |            |  |   |            |  |      |  
|21,933,451  |  | 8/05  |  | Industrial Biotechnology Corporation (10)               |  |   | 6,351,998  |  |   | 32,900     |  | 0.1  |  
|            |  |       |  | Manufactures and markets flavors and fragrances         |  |   |            |  |   |            |  |      |  
|4,444,876   |  | 5/06  |  | DME Interactive Holdings, Inc.                          |  |   | 769,820    |  |   |           |  | 0.0  |  
|            |  |       |  | Multi-media entertainment                               |  |   |            |  |   |            |  |      |  
|            |  |       |  | Liberty Diversified Holdings, Inc.                      |  |   |            |  |   |            |  |      |  
|            |  |       |  | Printing and packaging                                  |  |   |            |  |   |            |  |      |  
|16,037,500  |  | 7/06  |  | Common Stock                                            |  |   | 1,245,258  |  |   |           |  | 0.0  |  
|63,981      |  | 2/07  |  | Series B Preferred Stock                                |  |   | 382,800    |  |   |           |  | 0.0  |  
|            |  |       |  |                                                         |  |   |            |  |   |            |  |      |  
|            |  |       |  | Total Investments in Affiliates                         |  | $ | 41,191,979 |  | $ | 14,607,300 |  | 30.5 | %
|            |  |       |  |                                                         |  |   |            |  |   |            |  |      |  
|            |  |       |  |                                                         | 
|            |  |       |  | Control Investments (3)                                 |  |   |            |  |   |            |  |      |  
|            |  |       |  |                                                         | 
|1,000       |  | 11/99 |  | UTEK Real Estate Holdings, Inc. (privately held)        |  | $ | 4,131,574  |  | $ | 3,550,700  |  | 7.4  |  
|            |  |       |  | Real estate development                                 |  |   |            |  |   |            |  |      |  
|15,009,402  |  | 3/06  |  | Klegg Electronics, Inc.                                 |  |   | 6,506,174  |  |   | 2,364,000  |  | 4.9  |  
|            |  |       |  | Manufacturer/distributor for retail electronic products |  |   |            |  |   |            |  |      |  
|(6)         |  | 1/06  |  | UTEK Real Estate Holdings, Inc. (privately held)        |  |   | 1,884,032  |  |   | 1,884,032  |  | 4.0  |  
|            |  |       |  |                                                         |  |   |            |  |   |            |  |      |  
|            |  |       |  | (Demand note, interest rate @ 5%)                       |  |   |            |  |   |            |  |      |  
|            |  |       |  | Total Investments in Control Investments                |  | $ | 12,521,780 |  | $ | 7,798,732  |  | 16.3 | %
|            |  |       |  |                                                         |  |   |            |  |   |            |  |      |  



Page 10 of 39



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|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|--------- |  | ---- |  | ---------------------------------------------------------------- |  | - | ---------- |  | - | ---------- |  | ----- | -
|          |  |      |  | U.S. Treasuries and Certificates of Deposit (4)                  |  |   |            |  |   |            |  |       |  
|          |  |      |  |                                                                  | 
|Par Value |  |      |  | U.S. Treasuries:                                                 |  |   |            |  |   |            | 
|1,000,000 |  | 6/07 |  | United States Treasury, maturity 7/12/07, interest rate @ 4.421% |  | $ | 999,060    |  | $ | 999,060    |  | 2.1   | %
|1,000,000 |  | 6/07 |  | United States Treasury, maturity 7/26/07, interest rate @ 4.375% |  |   | 997,210    |  |   | 997,210    |  | 2.1   |  
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Total U.S. Treasuries                                            |  | $ | 1,996,270  |  | $ | 1,996,270  |  | 4.2   | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Certificates of Deposit:                                         |  |   |            |  |   |            |  |       |  
|100,000   |  | 5/07 |  | LaSalle Bank CD, maturity 8/30/07, interest rate @ 4.9%          |  | $ | 93,902     |  | $ | 93,902     |  | 0.2   | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Total Certificates of Deposit                                    |  | $ | 93,902     |  | $ | 93,902     |  | 0.2   | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Total Investments in U.S. Treasuries and CDs                     |  | $ | 2,090,172  |  | $ | 2,090,172  |  | 4.4   | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | TOTAL INVESTMENTS                                                |  | $ | 91,749,681 |  | $ | 34,158,904 |  | 71.5  | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Cash and other assets, less liabilities                          |  |   |            |  |   | 13,626,618 |  | 28.5  | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  
|          |  |      |  | Net assets at June 30, 2007                                      |  |   |            |  | $ | 47,785,522 |  | 100.0 | %
|          |  |      |  |                                                                  |  |   |            |  |   |            |  |       |  

Notes to Schedule of Investments:



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



| |  |  | The above investments, with the exception of the U.S. Treasuries and certificates of deposits, are non-income producing. Equity investments that have not paid
dividends within the last twelve months are considered non-income producing.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | As of June 30, 2007, all of the securities that we own are subject to legal restrictions on resale. As a result, our ability to sell or otherwise transfer the
securities we hold in our portfolio is limited.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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



| | (4) | The Company invests excess cash in a number of U.S. Treasury Bills 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 a loan receivable with subsidiaries of UTEK Real Estate Holdings, Inc.
| | --- | ---------------------------------------------------------------------------------------------



Page 11 of 39



---

| | (7) | Investment consists of warrants to purchase 1,500,000 shares of Synthetic Blood International, Inc. common stock.
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (8) | During the period ended June 30, 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 June 30, 2007, the Company reclassified this investment from Non-affiliated investments to Affiliate investments based on the criteria in notes
(1) and (2).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | During the period ended June 30, 2007, the Company reclassified this investment from Control investments to Affiliate investments based on the criteria in notes (2) and
(3).
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (11) | Advanced Medical Isotope Corporation and Manakoa Services Company are parties related through common management.
| | ---- | ----------------------------------------------------------------------------------------------------------------



| | (12) | Xethanol Corporation and Metamorphix Global, Inc. are parties related though common management.
| | ---- | -----------------------------------------------------------------------------------------------

See accompanying notes



Page 12 of 39



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UTEK CORPORATION

Schedule of Investments

December 31, 2006



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



Page 13 of 39



---

|          |  |       |  |                                                     |  |            |  |        |  |    
|--------- |  | ----- |  | --------------------------------------------------- |  | ---------- |  | ------ |  | ---
|1,411,765 |  | 7/06  |  | MM2 Group, Inc.                                     |  | 56,004     |  | 33,900 |  | 0.1
|          |  |       |  | Financial consulting for nutraceuticals             |  |            |  |        |  |    
|2,011,765 |  | 5/06  |  | Rheologics, Inc.(8)                                 |  | 86,100     |  | 28,200 |  | 0.1
|          |  |       |  | Study of blood viscosity                            |  |            |  |        |  |    
|1,635,000 |  | 3/04  |  | Swiss Medica, Inc.                                  |  | 304,988    |  | 28,000 |  | 0.1
|          |  |       |  | Health bioscience products                          |  |            |  |        |  |    
|1,200,000 |  | 10/06 |  | Laserlock Technologies, Inc.                        |  | 24,100     |  | 20,100 |  | <.1
|          |  |       |  | Security solutions for the gaming industry          |  |            |  |        |  |    
|269,230   |  | 8/06  |  | Protocall Technologies, Inc.                        |  | 11,577     |  | 19,500 |  | <.1
|          |  |       |  | On-demand software and entertainment                |  |            |  |        |  |    
|33,825    |  | 5/05  |  | XLER8, Inc. (Vitacube Systems, Inc).                |  | 16,427     |  | 18,900 |  | <.1
|          |  |       |  | Specialty nutraceuticals                            |  |            |  |        |  |    
|387,097   |  | 6/06  |  | Tradequest International, Inc.                      |  | 76,092     |  | 18,600 |  | <.1
|          |  |       |  | Provider of voice over internet protocol            |  |            |  |        |  |    
|697,860   |  | 8/06  |  | Magnitude Information Systems, Inc.                 |  | 25,920     |  | 17,800 |  | <.1
|          |  |       |  | Computer ergonomics                                 |  |            |  |        |  |    
|232,211   |  | 5/05  |  | Preservation Sciences, Inc.                         |  |           |  | 17,800 |  | <.1
|          |  |       |  | Metal and concrete coatings                         |  |            |  |        |  |    
|122,449   |  | 1/06  |  | 5G Wireless Communications, Inc.                    |  | 78,851     |  | 14,300 |  | <.1
|          |  |       |  | Broadband wireless                                  |  |            |  |        |  |    
|221,033   |  | 4/04  |  | Power3 Medical Products, Inc.                       |  | 201,599    |  | 13,900 |  | <.1
|          |  |       |  | Healthcare products                                 |  |            |  |        |  |    
|180,000   |  | 5/06  |  | U.S. Starcom, Inc.                                  |  | 17,181     |  | 13,800 |  | <.1
|          |  |       |  | Communications services and products                |  |            |  |        |  |    
|750,000   |  | 10/04 |  | U.S. Wireless Online, Inc.                          |  | 66,000     |  | 9,100  |  | <.1
|          |  |       |  | Wireless broadband networks                         |  |            |  |        |  |    
|258,064   |  | 5/06  |  | IPORUSSIA, Inc.                                     |  | 24,000     |  | 8,800  |  | <.1
|          |  |       |  | Business advisory services provider                 |  |            |  |        |  |    
|115,069   |  | 7/06  |  | Inverted Paradigms Corporation                      |  | 32,510     |  | 6,400  |  | <.1
|          |  |       |  | Safety and security software                        |  |            |  |        |  |    
|105,600   |  | 5/06  |  | HumWare Media Corporation                           |  | 14,236     |  | 5,900  |  | <.1
|          |  |       |  | Media advertising                                   |  |            |  |        |  |    
|384,000   |  | 7/06  |  | aeroTelesis, Inc.                                   |  | 33,394     |  | 4,300  |  | <.1
|          |  |       |  | Satellite and wireless bandwidth utilization        |  |            |  |        |  |    
|774,951   |  | 6/06  |  | Universal Detection Technology                      |  | 30,378     |  | 3,600  |  | <.1
|          |  |       |  | Detection devices for bacterial spores              |  |            |  |        |  |    
|660,000   |  | 6/05  |  | BP International, Inc.                              |  | 78,852     |  | 3,300  |  | <.1
|          |  |       |  | Shade structures                                    |  |            |  |        |  |    
|2,335,977 |  | 7/06  |  | PracticeXpert, Inc.                                 |  | 27,172     |  | 3,300  |  | <.1
|          |  |       |  | Operational efficiencies for medical practitioners  |  |            |  |        |  |    
|808,529   |  | 4/04  |  | HydroFlo, Inc. (6)                                  |  | 125,861    |  | 3,000  |  | <.1
|          |  |       |  | Business development company                        |  |            |  |        |  |    
|85,714    |  | 9/05  |  | New Life Scientific, Inc.                           |  | 81,816     |  | 2,900  |  | <.1
|          |  |       |  | Pharmaceutical biotechnologies                      |  |            |  |        |  |    
|666,668   |  | 9/05  |  | Quest Minerals & Mining Corporation                 |  | 69,044     |  | 1,800  |  | <.1
|          |  |       |  | Coal and mineral mining                             |  |            |  |        |  |    
|50,925    |  | 7/06  |  | Global General Technologies, Inc.                   |  | 13,228     |  | 1,700  |  | <.1
|          |  |       |  | Homeland security systems                           |  |            |  |        |  |    
|37,500    |  | 6/05  |  | Modern Technology Corporation                       |  | 82,152     |  | 1,400  |  | <.1
|          |  |       |  | Technology development and acquisition company      |  |            |  |        |  |    
|140,000   |  | 3/05  |  | AdAl Group, Inc. (5)                                |  | 72,912     |  |       |  | 0.0
|          |  |       |  | Aluminum extruded products manufacturer             |  |            |  |        |  |    
|7,787,565 |  | 6/05  |  | Trio Industries Group, Inc. (8)                     |  | 12,330,401 |  |       |  | 0.0
|          |  |       |  | Protective powder coating                           |  |            |  |        |  |    
|          |  |       |  | KP Renewables Plc (Kwikpower International Plc) (5) |  |            |  |        |  |    
|          |  |       |  | Renewable energy                                    |  |            |  |        |  |    
|          |  | 5/06  |  | Convertible Debenture, due 5/10/07                  |  | 4,433,401  |  |       |  | 0.0
|          |  | 9/05  |  | Convertible Debenture, due 9/30/06                  |  | 1,884,920  |  |       |  | 0.0
|50,000    |  | 3/05  |  | Common Stock                                        |  | 94,500     |  |       |  | 0.0



Page 14 of 39



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



Page 15 of 39



---

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

Notes to Schedule of Investments:



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



| |  |  | The above investments, with the exception of the U.S. Treasuries and certificates of deposits, are non-income producing. Equity investments that have not paid
dividends within the last twelve months are considered non-income producing.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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



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



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



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



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



| | (6) | Closed-end management investment company that has elected to be regulated as a business development company under the Investment Act of 1940. During the year ended December 31,
2006, the Company made a gift of 5.1 million shares of HydroFlo, Inc. common stock to certain not-for-profit institutions and abandoned its right, title and interest in and to 400,000 shares of HydroFlo, Inc.s common stock.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Investment consists of a loan receivable with subsidiaries of UTEK Real Estate Holdings, Inc.
| | --- | ---------------------------------------------------------------------------------------------



Page 16 of 39



---

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



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



| | (10) | During the period ended December 31, 2006, the Company reclassified this investment from Affiliate investments to Control investments based on the criteria in notes
(2) and (3).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (11) | Advanced Medical Isotope Corporation and Manakoa Services Company are parties related through common management.
| | ---- | ----------------------------------------------------------------------------------------------------------------



| | (12) | Xethanol Corporation and Metamorphix Global, Inc. are parties related though common management.
| | ---- | -----------------------------------------------------------------------------------------------

See accompanying notes



Page 17 of 39



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UTEK Corporation

Notes to Consolidated Financial Statements

Three and Six Months Ended June 30, 2007 and 2006

(unaudited)

1. Nature of Business and Significant Accounting Policies

Interim Financial Information

The financial information for UTEK
Corporation (the "Company", we, us or UTEK) as of June 30, 2007 and 2006 and for the three and six month periods then ended is unaudited, but includes all adjustments (consisting only of normal recurring
accruals), which, in the opinion of management are necessary in order to make the consolidated financial statements not misleading at such dates and for those periods. These consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial information and, therefore, do not include all information and footnotes required by accounting principles generally accepted in the United States of
America for complete consolidated financial statements. These consolidated financial statements should be read in conjunction with the consolidated audited financial statements and related notes included in the Companys Form 10-K for the year
ended December 31, 2006. Operating results for the three and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the entire year.

The Company

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

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

The Company is a
non-diversified, closed-end management investment company that has elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (1940 Act). The Companys investment objective is
to increase its net assets by effectuating technology transfers with companies pursuant to which it receives the securities or cash from such companies as compensation for the sale of new technology rights.

Strategic Alliance Agreements (Technology Acquisition Alliances)

The strategic alliance agreements are designed to help companies enhance their new product pipeline through the acquisition of proprietary technologies primarily from universities, medical centers and federal research
laboratories. 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 the strategic alliance agreements with
our client companies.

Technology Transfers

To effectuate a technology transfer, the Company will typically create a newly formed company to acquire technology
rights from a university, medical center or federal research laboratory. The Company then seeks to sell this newly formed company to the client company for securities or cash. This unique technology transfer process is called U2B®. It is the Companys plan that the shares received 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 U2B®investment process is that such transactions do not
result in a current taxable event for the Company for income tax purposes. The Company has not acquired, and does not currently intend to acquire, technology rights from a university, medical center and federal research laboratory in connection with
our U2B®process without the prior agreement of the client company to subsequently acquire some or all of such new technology
rights.



Page 18 of 39



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Principles of Consolidation

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

All intercompany transactions and balances are eliminated in consolidation.

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

Reclassifications

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

Goodwill Impairment

As a result of the Companys annual
impairment analysis, the Company determined there was an impairment of the goodwill related to the Pharma Transfer acquisition in the first quarter of 2007. The Company recorded a partial impairment of the goodwill for the United States segment in
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 six months ended June 30, 2007.

During the first quarter of 2006, the Company decided to make significant changes in strategy for UTEKip, Ltd., primarily switching the focus of operations in
Israel from software to technology transfer, the Companys core business. These changes were other-than-temporary; therefore, management determined there was an impairment of the original purchase goodwill. The Company recorded a total
impairment of the goodwill for the Israel segment in the first quarter of 2006. This resulted in a write-down of approximately $235,000, $147,000 after tax, which is an operating expense in the consolidated statements of operations for the six
months ended June 30, 2006.

Earnings per Share (EPS)

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

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



|                                                    |  |                    |  |                  |  |            |  |          
|--------------------------------------------------- |  | ------------------ |  | ---------------- |  | ---------- |  | ---------
|                                                    |  | Three Months Ended |  | Six Months Ended
|                                                    |  | 2007               |  | 2006             |  | 2007       |  | 2006     
|Weighted average outstanding shares of common stock |  | 8,997,538          |  | 8,871,871        |  | 8,968,152  |  | 8,663,083
|Dilutive effect of stock options                    |  |                   |  | 125,439          |  |           |  | 96,095   
|                                                    |  |                    |  |                  |  |            |  |          
|Common stock and common stock equivalents           |  | 8,997,538          |  | 8,997,310        |  | 8,968,152  |  | 8,759,178
|                                                    |  |                    |  |                  |  |            |  |          
|Shares excluded from calculation of diluted EPS (1) |  | (2)552,025         |  | 30,000           |  | (2)552,025 |  | 122,500  
|                                                    |  |                    |  |                  |  |            |  |          

---

|(1) | These shares attributable to outstanding stock options were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | These shares excluded from the calculation would have been anti-dilutive because there was a net decrease in net assets from operations during the period.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



Page 19 of 39



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Financial Instruments and Concentrations of Credit Risk

The Companys financial instruments consist of investments, 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.

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. Such investments were in excess of FDIC insurance limits. The Company has not experienced any losses on such
accounts.

Use of Estimates

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

Recently Issued Accounting Pronouncements

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

In February 2007, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115. SFAS No. 159 permits an
entity to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. The Company is currently
evaluating SFAS No. 159; however, because the Companys investments are stated at fair value, the Company does not anticipate that any adoption of SFAS No. 159 will have a significant impact, if any, on its results of operations or
financial position.

In June 2007, the AICPA issued Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting
Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. SOP 07-1 clarifies which entities are within the scope of the AICPA Audit and Accounting Guide Investment
Companies (the "Guide") and is effective for fiscal years beginning on or after December 15, 2007. Companies that are regulated by the Investment Company Act of 1940 are automatically within the scope of the Guide. As such, the adoption of SOP
07-1 will not affect the Company because it already adheres to the provisions of the Guide.

Upon adoption of SOP 07-1, a company must also adopt the
provisions of FASB Staff Position (FSP) No. FIN 46R-7 Application of FASB Interpretation No. 46R to Investment Companies. FSP No. FIN 46R-7 permanently exempts investment companies from applying the provisions of
Interpretation 46R to investments carried at fair value.

2. Share-Based Compensation

The Company had two stock-based equity compensation plans at June 30, 2007. See Note 9 of our consolidated financial statements included in the Companys Form 10-K for the year ended December 31, 2006.

Options under both plans are granted at the fair market value of the stock on the date of grant, except in the case of a more than 10% shareholder, for
which grants are exercisable at 110% of fair market value of the stock on the date of grant. Options generally become fully vested three to four years from the date of grant and expire five years from the date of grant. During the three and six
months ended June 30, 2007, respectively, we granted 48,000 and 182,000 options to purchase shares of common stock. During the three and six months ended June 30, 2006, respectively, we granted 32,000 and 64,000 options to purchase shares
of common stock. At June 30, 2007, the Company had 549,703 shares available for future stock option grants under existing plans.



Page 20 of 39



---

The Company accounts 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 six months ended June 30, 2007 and 2006 includes compensation cost for all
share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and compensation cost for all share based payments granted
subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R).

The Company recorded
approximately $171,000 and $141,000 for the three months ended June 31, 2007 and 2006, respectively, and $278,000 and $222,000 for the six months ended June 31, 2007 and 2006, respectively, in compensation expense related to share-based
payments pursuant to SFAS 123(R) included in salaries and wages in the consolidated statement 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 share-based compensation expense for the three and six months ended June 30, 2007 and 2006
were calculated as follows:



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



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



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



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

The following table summarizes the assumptions (based on a
weighted-average) used to estimate the fair value of stock options granted during the six months ended June 30, 2007 and 2006.



|                         |  |      |            |   |      |   |            |  
|------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | -
|                         |  | 2007 |            |   | 2006 |  
|Expected dividend yield  |  |      | 0.25       | % |      |   | 0.07       | %
|Expected volatility      |  |      | 37.51      | % |      |   | 53.99      | %
|Risk-free interest rate  |  |      | 4.49       | % |      |   | 4.75       | %
|Expected life of options |  |      | 3.78 years |   |      |   | 3.67 years |  
|Grant date fair value    |  | $    | 4.58       |   |      | $ | 7.09       |  

Net cash proceeds from the exercise of stock options were approximately $523,000 and $276,000 for the six months
ended June 30, 2007 and 2006, respectively. At June 30, 2007, there was approximately $1,691,000 of unrecognized compensation cost related to share-based payments which is expected to be recognized over a weighted average period of 3.1
years.

The following table represents stock option activity as of and for the six months ended June 30, 2007:



|                                        |  |                 |   |  |                              |       |                                          |            |                         |   |        
|--------------------------------------- |  | --------------- | - |  | ---------------------------- | ----- | ---------------------------------------- | ---------- | ----------------------- | - | -------
|                                        |  | Numberof Shares |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractual Life |            | AggregateIntrinsicValue
|Options Outstanding - January 1, 2007   |  | 582,050         |   |  | $                            | 13.18 |                                          | 2.89 years |                         | $ | 778,000
|                                        |  |                 |   | 
|Granted                                 |  | 182,000         |   |  |                              | 13.48 |                                          |            |                         |   |        
|Exercised                               |  | (73,767         | ) |  |                              | 7.18  |                                          |            |                         | $ | 483,000
|Forfeited/expired/cancelled             |  | (138,258        | ) |  |                              | 13.27 |                                          |            |                         |   |        
|                                        |  |                 |   |  |                              |       |                                          |            |                         |   |        
|                                        |  |                 |   | 
|Options Outstanding  June 30, 2007     |  | 552,025         |   |  | $                            | 14.06 |                                          | 3.45 years |                         | $ | 742,000
|                                        |  |                 |   |  |                              |       |                                          |            |                         |   |        
|Outstanding Exercisable  June 30, 2007 |  | 210,451         |   |  | $                            | 12.51 |                                          | 2.10 years |                         | $ | 501,000
|                                        |  |                 |   |  |                              |       |                                          |            |                         |   |        

The total grant date fair value of options vested during the six months ended June 30, 2007 and 2006 was
$117,000 and $268,000, 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



Page 21 of 39



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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.

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

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

Without a readily available market value, the value of our portfolio of securities may differ significantly from the values that would be placed on the portfolio if
there existed a ready market for such securities, and the differences could be material. Substantially all of the Companys investments owned at June 30, 2007 and December 31, 2006 (71.5% and 74.3% of net assets, respectively), are
stated at fair value as determined by the Board of Directors, in the absence of readily available fair values. The Company uses the first-in, first-out (FIFO) method of accounting for sales of its investments.

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

Strategic Alliances (Technology
Acquisition Alliances):

At June 30, 2007, the Company had fifty active strategic alliance clients. During the six months ended June 30, 2007,
the Company entered into forty-one strategic alliance agreements, of which, three were renewals. The income recognized from all strategic alliance agreements for the three and six months ended June 30, 2007 was approximately $471,000 and
$1,000,000, respectively. In January 2007, the Company reduced the price of its strategic alliance agreements and changed the payment terms to primarily cash. This was done to enhance client diversification and reduce the cost of handling small
equity stakes. Of the forty-one most recent alliances, three agreements called for payment in stock and the remaining agreements called for monthly fees to be paid in cash. Five alliance agreements were terminated during the six months ended
June 30, 2007.

At June 30, 2006, the Company had thirty-six active strategic alliance clients. During the six months ended June 30, 2006,
the Company entered into twenty-four strategic alliance agreements, of which three were renewals. The income recognized from all strategic alliance agreements for the three and six months ended June 30, 2006 was approximately $736,000 and
$1,467,000, respectively.

Technology Transfers:

All
of our technology transfers are generally completed as set forth in our strategic alliance service agreements with our clients.

During the six months
ended June 30, 2007, the Company completed the following eleven technology transfers:



|            |  |                                                    |  |                                               |  |                                           |  |                   |           
|----------- |  | -------------------------------------------------- |  | --------------------------------------------- |  | ----------------------------------------- |  | ----------------- | ----------
|Date        |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                          |  | Consideration Unregistered
Sharesor Cash |  | Price perShare(1)
|January 4   |  | Manakoa Services Corporation                       |  | Infinite Identification Technologies, Inc.    |  | 95,000 preferred (2)                      |  | $                 | 24.00     
|January 11  |  | Cyberlux Corporation                               |  | Hybrid Lighting Technologies, Inc.            |  | 50,000 preferred (3) 26,500,000 common    |  |                   | 11.53 0.02
|January 30  |  | CytoDyn, Inc.                                      |  | Advanced Genetic Technologies, Inc.           |  | 100,000 preferred (4)                     |  |                   | 8.45      
|January 31  |  | Material Technologies, Inc.                        |  | Stress Analysis Technologies, Inc.            |  | 47,500 preferred (5)                      |  |                   | 14.62     
|February 12 |  | Liberty Diversified Holdings, Inc.                 |  | Sero Tonin Solutions, Inc.                    |  | 63,981 preferred (6)                      |  |                   | 6.00      
|March 12    |  | Metamorphix Global, Inc.                           |  | Flex Crete Technologies, Inc.                 |  | $200,000 cash                             |  |                   |          
|March 12    |  | Klegg Electronics, Inc.                            |  | Tempo Control Technologies, Inc.              |  | 10,901,250 common                         |  |                   | .04       
|March 28    |  | Avalon Oil & Gas, Inc.                             |  | Leak Location Technologies, Inc.              |  | 34,875,000 common                         |  |                   | .02       
|April 30    |  | Material Technologies, Inc.                        |  | Damage Assessment Technologies, Inc.          |  | 7,125,000 common                          |  |                   | .215      
|May 30      |  | Klegg Electronics, Inc.                            |  | Klegg Network Storage Technologies, Inc.      |  | 8,550,000 common                          |  |                   | .255      
|June 28     |  | Material Technologies, Inc.                        |  | Non-Destructive Assessment Technologies, Inc. |  | 6,412,500 common                          |  |                   | .24       



Page 22 of 39



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---

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

During the six months ended June 30, 2006, the Company completed the following sixteen technology transfers:



|           |  |                                                    |  |                                                  |  |                                   |  |                   |       
|---------- |  | -------------------------------------------------- |  | ------------------------------------------------ |  | --------------------------------- |  | ----------------- | ------
|Date       |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                             |  | Consideration UnregisteredShares |  | Price perShare(1)
|January 20 |  | Fuel FX International, Inc.                        |  | Emissions Detection Technologies, Inc.           |  | 100,000(2)                        |  | $                 | 21.000
|January 27 |  | Broadcast International, Inc.                      |  | Video Processing Technologies, Inc.              |  | 944,360                           |  |                   | 1.210 
|January 30 |  | WebSky, Inc.                                       |  | Strategic Wireless Solutions, Inc.               |  | 33,250,000                        |  |                   | 0.027 
|March 6    |  | Trio Industries Group                              |  | Ultra Fine Coating Systems, Inc.                 |  | 1,805,000                         |  |                   | 1.350 
|March 15   |  | American Soil Technologies, Inc.                   |  | Advanced Fertilizer Technologies, Inc.           |  | 4,275,000                         |  |                   | 0.367 
|March 16   |  | Advanced Refractive Technologies, Inc.             |  | Ocular Therapeutics, Inc.                        |  | 97,000(3)                         |  |                   | 45.254
|April 3    |  | Trio Industries Group, Inc.                        |  | Natural Adhesive Technologies, Inc.              |  | 1,566,089                         |  |                   | 2.090 
|April 4    |  | Advanced Refractive Technologies, Inc.             |  | Advanced Glaucoma Technologies, Inc.             |  | 100,000(4)                        |  |                   | 19.960
|April 5    |  | UBA Technology, Inc.                               |  | Intellitouch Technologies, Inc.                  |  | 48,614,797(5)                     |  |                   |       
|May 1      |  | Industrial Biotechnology Corporation               |  | Bio-Repellant Technologies, Inc.                 |  | 3,865,979                         |  |                   | 0.720 
|May 12     |  | Kwikpower International Plc                        |  | Hydrocarbon Synthesis Technologies, Inc.         |  | (6)                               |  |                   |       
|May 12     |  | Kwikpower International Plc                        |  | Advanced BioEnergy Technologies, Inc.            |  | (7)                               |  |                   |       
|June 1     |  | Trio Industries Group, Inc.                        |  | Advanced Powder Coating Technologies, Inc.       |  | 1,470,987                         |  |                   | 1.770 
|June 12    |  | Kwikpower International Plc                        |  | Advanced Biofuel Technologies, Inc.              |  | (8)                               |  |                   |       
|June 13    |  | Xethanol Corporation                               |  | Advanced Biomass Gasification Technologies, Inc. |  | 136,838                           |  |                   | 6.400 
|June 20    |  | Klegg Electronics, Inc.                            |  | Smart Speaker Technologies, Inc.                 |  | 24,148,765                        |  |                   | 0.104 

---

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

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

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

|(4) | Preferred B shares convertible into common shares based on a value of $2.8 million.
|--- | -----------------------------------------------------------------------------------

|(5) | The Company also received 95,000 Preferred A shares convertible into common shares based on a value of $2.5 million
|--- | -------------------------------------------------------------------------------------------------------------------

|(6) | Consideration consisted of a £1.2 million convertible debenture. The Company has recognized the value of the investment based upon the fair value of the 2.4 million
common shares underlying the convertible debenture.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Consideration consisted of a £1.3 million convertible debenture. The Company has recognized the value of the investment based upon the fair value of the 2.5 million
common shares underlying the convertible debenture.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Consideration consisted of a £1.2 million convertible debenture. The Company has recognized the value of the investment based upon the fair value of the 2.3 million
common shares underlying the convertible debenture.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

4. Commitments and Contingencies

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

5. Segment Reporting

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



Page 23 of 39



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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     
|Total assets June 30, 2007        |  | $                                        | 667,650 |   |        | $ | 56,603   |               |  | $ | 48,495,374 |     |  | $ | 49,219,627
|Total assets December 31, 2006    |  |                                          | 719,238 |   |        |   | 71,771   |               |  |   | 52,249,801 |     |  |   | 53,040,810
|                                  |  |                                         
|                                  |  | For the six months ended June 30, 2007   |         |   | Total 
|                                  |  | UnitedKingdom                            |         |   | Israel |   |          | United States |  |  
|Income from operations            |  | $                                        | 112,251 |   |        | $ | 88,843   |               |  | $ | 14,135,126 |     |  | $ | 14,336,220
|Income (loss) before income taxes |  |                                          | (74,364 | ) |        |   | (54,118  | )             |  |   | 7,180,147  | (1) |  |   | 7,051,665 
|Depreciation and amortization     |  |                                          | 821     |   |        |   | 3,105    |               |  |   | 105,542    |     |  |   | 109,468   
|                                  |  |                                         
|                                  |  | For the six months ended June 30, 2006   |         |   | Total 
|                                  |  | UnitedKingdom                            |         |   | Israel |   |          | United States |  |  
|Income from operations            |  | $                                        | 363,598 |   |        | $ | 80,796   |               |  | $ | 34,421,919 |     |  | $ | 34,866,313
|Income (loss) before income taxes |  |                                          | 9,129   |   |        |   | (397,906 | )(2)          |  |   | 21,750,116 |     |  |   | 21,361,339
|Depreciation and amortization     |  |                                          | 1,650   |   |        |   | 10,730   |               |  |   | 85,334     |     |  |   | 97,714    
|                                  |  |                                         
|                                  |  | For the three months ended June 30, 2007 |         |   | Total 
|                                  |  | UnitedKingdom                            |         |   | Israel |   |          | United States |  |  
|Income from operations            |  | $                                        | 22,603  |   |        | $ | 48,674   |               |  | $ | 6,317,172  |     |  | $ | 6,388,449 
|Income (loss) before income taxes |  |                                          | (21,693 | ) |        |   | (13,657  | )             |  |   | 3,230,629  |     |  |   | 3,195,279 
|Depreciation and amortization     |  |                                          | 415     |   |        |   | 1,520    |               |  |   | 52,391     |     |  |   | 54,326    
|                                  |  |                                         
|                                  |  | For the three months ended June 30, 2006 |         |   | Total 
|                                  |  | United Kingdom                           |         |   | Israel |   |          | United States |  |  
|Income from operations            |  | $                                        | 106,252 |   |        | $ | 43,901   |               |  | $ | 22,909,154 |     |  | $ | 23,059,307
|Income (loss) before income taxes |  |                                          | (98,203 | ) |        |   | (55,276  | )             |  |   | 15,727,463 |     |  |   | 15,573,984
|Depreciation and amortization     |  |                                          | 924     |   |        |   | 5,813    |               |  |   | 34,999     |     |  |   | 41,736    

---

|(1) | During the six months ended June 30, 2007, the Company recorded goodwill impairment for Pharma Transfer of $33,030, which is included in the current period loss.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | During the six months ended June 30, 2006, the Company recorded goodwill impairment for UTEKip,Ltd. of $234,940, which is included in the current period loss.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

6. Related Party Transactions

During
the six months ended June 30, 2007, we loaned funds for operations and real estate improvements of approximately $703,000 to certain subsidiaries of UTEK Real Estate Holdings, Inc., one of UTEKs portfolio companies. In addition, we paid
rent of approximately $119,000 to Ybor City Group, Inc., a subsidiary of UTEK Real Estate Holdings, Inc., during the six months ended June 30, 2007.

7. Line of Credit

In February 2007, we obtained a $4,000,000 uncommitted bank line of credit with the Bank of Tampa. The advances on the
line of credit accrue interest (payable monthly) at prime (presently 8.25%). The principal and any unpaid interest are due upon demand. This line is collateralized with commercial real estate owned by UTEK Real Estate Holdings, Inc. As of
June 30, 2007, we had no outstanding principal or interest in connection with this line.



Page 24 of 39



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8. Subsequent Events

On June 15, 2007, the Companys stockholders approved an amendment to the Companys certificate of incorporation to increase the number of authorized shares of common stock to 25 million shares. The amendment was made to
the certificate of incorporation subsequent to the end of the second quarter.



Page 25 of 39



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

Special Note Regarding Forward-Looking Statements

The following discussion should be read in conjunction with our
consolidated financial statements and the notes thereto included elsewhere in this Form 10-Q. This Form 10-Q contains forward-looking statements regarding the plans and objectives of management for future operations. These forward-looking statements
may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any
forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words may, will, should,
expect, anticipate, estimate, believe, intend or project or the negative of these words or other variations on these words or comparable terminology. These forward-looking
statements are based on assumptions that may be incorrect, and we cannot assure you that the projections included in these forward-looking statements will come to pass. Our actual results could differ materially from those expressed or implied by
the forward-looking statements as a result of various factors.

Overview of Recent Developments

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

Executive Summary

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

Our total
assets were $49.2 million and our net assets were $47.8 million at June 30, 2007, compared to $53.0 million and $51.0 million at December 31, 2006, respectively. Net asset value per share was $5.30 at June 30, 2007 and $5.71 at
December 31, 2006. At the end of the second quarter of 2007, we had no long-term debt outstanding and $7.7 million in cash and cash equivalents.

Income from operations for the six months ended June 30, 2007 totaled approximately $14.3 million, as compared to $34.9 million for the same period of 2006. Net income from operations for the six months ended June 30, 2007 totaled
approximately $4.2 million as compared to $13.4 million for the same period of 2006. Net realized (losses) on investments, net of deferred tax effect, totaled approximately ($1.1) million for the six months ended June 30, 2007 as compared to
net realized gains of $2.2 million in 2006. In this regard, we received gross proceeds of $821,000 for the six months ended June 30, 2007 and $6.1 million for the same period of 2006 in connection with the sale of the securities we received in
connection with our strategic alliance agreements and technology transfer transactions. Net change in unrealized appreciation (depreciation) of investments, net of deferred tax benefit, was ($7.0) million for the six months ended June 30, 2007
as compared to $1.0 million for the same period of 2006.

On December 1, 2006, our Board of Directors approved a special dividend of $0.02 per share
that was paid on January 31, 2007 to shareholders of record on January 12, 2007. Our Board of Directors will have sole discretion in determining whether to declare and pay cash dividends in the future. The declaration of cash dividends
will depend on our profitability, financial condition, cash requirements, future prospects and other factors deemed relevant by our Board of Directors. Our ability to pay cash dividends in the future could be limited or prohibited by regulatory
requirements and the terms of financing agreements that we may enter into or by the terms of any preferred stock that we may authorize and issue.

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



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



Page 26 of 39



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



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

Technology Transfers and Strategic Alliances

In the six months ended June 30, 2007, we increased the number of our active strategic alliance agreements and decreased the number of completed technology transfers:



| |  |  | During the six months ended 2007, we signed 41 new strategic alliance agreements, as compared to 24 new strategic alliances in the same period of 2006.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the six months ended 2007, we completed 11 technology transfers valued at approximately $11.9 million as compared to 16 technology transfers valued at
approximately $31.8 million in the same period of 2006.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Portfolio Activity

The following is a list of significant changes in our portfolio during the six months ended June 30, 2007:



| |  |  | The sale of some or all of our shares in Shumate Industries, Inc., Broadcast International, Inc., Xethanol Corporation, Manakoa Services Corporation and various
other portfolio companies for approximately $821,000, which resulted in realized losses of $1.1 million (net of income tax);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The completion of 11 technology transfers valued at approximately $11.9 million (one technology transfer was completed for $200,000 in cash); and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A net unrealized loss of $7.0 million (net of income tax) in the fair value of our investments.
| | - |  | -----------------------------------------------------------------------------------------------

Our most significant portfolio investments at June 30, 2007 were in Material Technologies, Inc., UTEK Real Estate Holdings, Inc., Klegg Electronics, Inc., Advanced
Refractive Technologies, Inc., World Energy Solutions, Inc., Cyberlux Corporation and Advanced Medical Isotope Corporation. These seven investments totaled $20.4 million in fair value and represented 60% of our investments and 43% of net assets at
June 30, 2007.

The net unrealized depreciation for the three months ended June 30, 2007 was primarily due to the write down of the following six
investments in our portfolio: DME Interactive Holdings, Inc., Klegg Electronics, Inc., Industrial Biotechnology Corp., Material Technologies, Inc., Advanced Refractive Technologies, Inc. and Avalon Oil & Gas, Inc.

The net unrealized depreciation for the six months ended June 30, 2007 was primarily due to the write down of the following five investments in our portfolio:
Industrial Biotechnology Corp., DME Interactive Holdings, Inc., Fuel FX International, Inc., Manakoa Services Corporation and Klegg Electronics, Inc.

Large fluctuations in the fair value of our investments are not unexpected, given that substantially all of our investments are in development stage and start-up private companies and thinly traded public companies, and may occur in the
future. The current portfolio is comprised of more than 60 holdings. Many of these positions are with small capitalization companies which, over time, may have high failure rates due to a variety of factors. For clients that fail, UTEK may lose the
entire amount of its capital spent acquiring and transferring the technology to them. The value of our investments can fluctuate due to factors that are specific to each investment (e.g., inability to obtain additional capital, inability to execute
business model, termination of technology licenses, etc.) or as a result of general marketplace factors.

Results of Operations

Income from Operations (Revenue)



|                                   |  |                            |       |                  |   |        |                          |     |                  |  |      |        |  |   |        |  |     |   
|---------------------------------- |  | -------------------------- | ----- | ---------------- | - | ------ | ------------------------ | --- | ---------------- |  | ---- | ------ |  | - | ------ |  | --- | --
|                                   |  | Three months endedJune 30, |       | PercentageChange |   |        | Six months endedJune 30, |     | PercentageChange | 
|(in thousands, except percentages) |  | 2007                       |       | 2006             |   |        |                          |     | 2007             |  | 2006 |        |  |  
|Sale of Technology Rights          |  | $                          | 5,213 |                  | $ | 21,624 |                          | (76 | )%               |  | $    | 11,915 |  | $ | 31,839 |  | (63 | )%
|Consulting and Other Services      |  |                            | 1,022 |                  |   | 1,193  |                          | (14 | )%               |  |      | 2,069  |  |   | 2,546  |  | (19 | )%
|Other Income, net                  |  |                            | 153   |                  |   | 242    |                          | (37 | )%               |  |      | 352    |  |   | 481    |  | (27 | )%
|                                   |  |                            |       |                  |   |        |                          |     |                  |  |      |        |  |   |        |  |     |   
|Income from Operations             |  | $                          | 6,388 |                  | $ | 23,059 |                          | (72 | )%               |  | $    | 14,336 |  | $ | 34,866 |  | (59 | )%
|                                   |  |                            |       |                  |   |        |                          |     |                  |  |      |        |  |   |        |  |     |   



Page 27 of 39



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We completed three technology transfers during the three months ended June 30, 2007 as compared to ten during the
three months ended June 30, 2006. The technology transfers had an average value of $1.7 million and $2.2 million for the three months ended June 30, 2007 and 2006, respectively. The lower average value of the technology transfer is a
function of a decrease in the cost to acquire the technology rights partially offset by an increase in the average technology transfer multiple. The technology transfer multiple is the revenue markup on the acquisition of technology rights costs.
The average technology transfer multiple for the quarter ended June 30, 2007 was 5.1 as compared to 4.8 for the three months ended June 30, 2006. All income from the sale of technology rights for the three months ended June 30, 2007
and June 30, 2006 was received in the form of equity securities.

We completed eleven technology transfers during the six months ended June 30,
2007 as compared to sixteen during the six months ended June 30, 2006. The technology transfers had an average value of $1.1 million and $2.0 million for the six months ended June 30, 2007 and 2006, respectively. The lower average value of
the technology transfer is a function of a decrease in the cost to acquire the technology rights partially offset by an increase in the average technology transfer multiple. The average technology transfer multiple for the six months ended
June 30, 2007 was 5.1 as compared to 4.5 for the six months ended June 30, 2006. With the exception of $200,000 received in the first quarter of 2007, all income from the sale of technology rights for the six months ended June 30,
2007 and June 30, 2006 was received in the form of equity securities.

Income from strategic alliance agreements was approximately $470,000 and
$736,000 for the three months ended June 30, 2007 and 2006, respectively. Income from strategic alliance agreements was approximately $1.0 million and $1.5 million for the six months ended June 30, 2007 and 2006, respectively. The decrease
in income from strategic alliances in 2007 resulted primarily from a change in our pricing of the strategic alliance agreements. In January 2007, the Company reduced the price of its strategic alliance agreements and changed the payment terms to
primarily cash. This was done to enhance client diversification and reduce the cost of handling small equity stakes. Of the forty-one most recent alliances, three agreements called for payment in stock and the remaining agreements called for monthly
fees to be paid in cash.

Other consulting income for the three months ended June 30, 2007 included income of $243,000 from our Intellectual Capital
Consulting division, as compared to $85,000 for the three months ended June 30, 2006. Our UTEK Information Services division comprised the balance of consulting fee and other services income for 2007. During the 3 months ended June 30,
2006, the Intellectual Capital Consulting division was transitioning their office from Massachusetts to the Florida location, therefore the sales for the quarter dropped significantly. Of the total consulting and other services income received
during the three months ended June 30, 2007, 28% was paid in the form of equity securities in companies and the balance was paid in cash. Of such income received during the three months ended June 30, 2006, 46% was paid in the form of
equity securities and the balance was paid in cash.

Other consulting income for the six months ended June 30, 2007 included income of $333,000 from
our Intellectual Capital Consulting division, as compared to $358,000 for the six months ended June 30, 2006. Our UTEK Information Services division comprised the balance of consulting fee and other services income for 2007. Of the total
consulting and other services income received during the six months ended June 30, 2007, 36% was paid in the form of equity securities in companies and the balance was paid in cash. Of such income received during the six months ended
June 30, 2006, 37% was paid in the form of equity securities and the balance was paid in cash.

The increase in the number of our strategic alliances
is primarily a result of an increase in the overall demand for our services as well as the new pricing of our agreements. We believe that we are growing our customer base as a result of increased sales and marketing efforts and better recognition in
the business community regarding the value and availability of our services. Our new strategic alliances have increased the diversity of our customer makeup. Our current customer base has a larger average market capitalization than in previous
years. One result of having customers with a larger market capitalization is an increase in the time needed to complete technology transfers. Although we have increased the number of strategic alliance customers, the number of technology transfers
completed for the six months ended June 30, 2007 has decreased due to this factor. Future technology transfer transactions may be scaled to the amount of cash available to fund such transfers.

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



Page 28 of 39



---

Expenses

Acquisition of Technology Rights



|                                          |  |                             |       |   |                   |   |       |                           |  |     |                   |  |   |       |   |  |   |       |   |  |     |     
|----------------------------------------- |  | --------------------------- | ----- | - | ----------------- | - | ----- | ------------------------- |  | --- | ----------------- |  | - | ----- | - |  | - | ----- | - |  | --- | ----
|                                          |  | Three months ended June 30, |       |   | Percentage Change |   |       | Six months ended June 30, |  |     | Percentage Change | 
|(In thousands, except percentages)        |  | 2007                        |       |   | 2006              |   |       |                           |  |     | 2007              |  |   | 2006  |   |  |   |      
|Acquisition of technology rights          |  | $                           | 1,030 |   |                   | $ | 4,523 |                           |  | (77 | )%                |  | $ | 2,333 |   |  | $ | 7,147 |   |  | (67 | )%  
|As a percent of sale of technology rights |  |                             | 20    | % |                   |   | 21    | %                         |  | (1  | )ppt              |  |   | 20    | % |  |   | 22    | % |  | (2  | )ppt

Acquisition of technology rights costs consist of the direct costs associated with our technology transfers, which
include cash to further accelerate commercialization efforts, license fees to acquire new technologies, consulting fees with the inventor of the technologies, and sponsored research fees with the university or research facility transferring the
technologies. The overall decrease in acquisition of technology rights from 2007 to 2006 was due to the reduced number of technology transfers completed and reduced costs per transaction in the three and six months ended June 30, 2007 as
compared to the same periods in 2006. The average cost per technology transfer decreased approximately $109,000 or 24% during the three months ended June 30, 2007 as compared to the three months ended June 30, 2006. The average cost per
technology transfer decreased approximately $235,000 or 53% during the six months ended June 30, 2007 as compared to the six months ended June 30, 2006.

The following table provides certain information relating to the acquisition of technology rights expenses we incurred in connection with our technology transfers during the three and six months ended June 30, 2007:



|            |  |                                                    |  |                                               |  |                         |          
|----------- |  | -------------------------------------------------- |  | --------------------------------------------- |  | ----------------------- | ---------
|Date        |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                          |  | DollarAmount ofExpenses
|June 28     |  | Material Technologies, Inc.                        |  | Non-Destructive Assessment Technologies, Inc. |  | $                       | 280,000  
|May 30      |  | Klegg Electronics, Inc.                            |  | Klegg Network Storage Technologies, Inc.      |  |                         | 450,000  
|April 30    |  | Material Technologies, Inc.                        |  | Damage Assessment Technologies, Inc.          |  |                         | 300,000  
|            |  |                                                    |  |                                               |  |                         |          
|            |  |                                                    |  | Total for three months ended June 30, 2007    |  |                         | 1,030,000
|            |  |                                                    |  |                                               |  |                         |          
|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 six months ended June 30, 2007      |  | $                       | 2,333,279
|            |  |                                                    |  |                                               |  |                         |          

The following table provides certain information relating to the acquisition of technology rights expenses we
incurred in connection with our technology transfers during the three and six months ended June 30, 2006:



|           |  |                                                    |  |                                                  |  |                         |          
|---------- |  | -------------------------------------------------- |  | ------------------------------------------------ |  | ----------------------- | ---------
|Date       |  | Name of Company Acquiring the Newly Formed Company |  | Newly Formed Company                             |  | DollarAmount ofExpenses
|June 20    |  | Klegg Electronics, Inc.                            |  | Smart Speaker Technologies, Inc.                 |  | $                       | 528,628  
|June 13    |  | Xethanol Corporation                               |  | Advanced Biomass Gasification Technologies, Inc. |  |                         | 450,000  
|June12     |  | Kwikpower International Plc                        |  | Advanced Biofuel Technologies, Inc.              |  |                         | 375,000  
|June 1     |  | Trio Industries Group, Inc.                        |  | Advanced Powder Coating Technologies, Inc.       |  |                         | 550,000  
|May 12     |  | Kwikpower International Plc                        |  | Advanced BioEnergy Technologies, Inc.            |  |                         | 380,000  
|May 12     |  | Kwikpower International Plc                        |  | Hydrocarbon Synthesis Technologies, Inc.         |  |                         | 407,500  
|May 1      |  | Industrial Biotechnology Corporation               |  | Bio-Repellant Technologies, Inc.                 |  |                         | 375,000  
|April 5    |  | UBA Technology, Inc.                               |  | Intellitouch Technologies, Inc.                  |  |                         | 502,000  
|April 4    |  | Advanced Refractive Technologies, Inc.             |  | Advanced Glaucoma Technologies, Inc.             |  |                         | 399,999  
|April 3    |  | Trio Industries Group, Inc.                        |  | Natural Adhesive Technologies, Inc.              |  |                         | 555,000  
|           |  |                                                    |  |                                                  |  |                         |          
|           |  |                                                    |  | Total for three months ended June 30, 2006       |  |                         | 4,523,127
|           |  |                                                    |  |                                                  |  |                         |          
|March 16   |  | Advanced Refractive Technologies, Inc.             |  | Ocular Therapeutics, Inc.                        |  |                         | 400,000  
|March 15   |  | American Soil Technologies, Inc.                   |  | Advanced Fertilizer Technologies, Inc.           |  |                         | 500,000  
|March 6    |  | Trio Industries Group, Inc.                        |  | Ultra Fine Coating Systems, Inc.                 |  |                         | 534,000  
|January 30 |  | WebSky, Inc.                                       |  | Strategic Wireless Solutions, Inc.               |  |                         | 265,000  
|January 27 |  | Broadcast International, Inc.                      |  | Video Processing Technologies, Inc.              |  |                         | 625,000  
|January 20 |  | Fuel FX International, Inc.                        |  | Emissions Detection Technologies, Inc.           |  |                         | 300,000  
|           |  |                                                    |  |                                                  |  |                         |          
|           |  |                                                    |  | Total for six months ended June 30, 2006         |  | $                       | 7,147,127
|           |  |                                                    |  |                                                  |  |                         |          



Page 29 of 39



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Salaries and Wages



|                                   |  |                             |     |   |                  |   |     |                           |  |      |                  |  |   |       |   |  |   |       |   |  |      |  
|---------------------------------- |  | --------------------------- | --- | - | ---------------- | - | --- | ------------------------- |  | ---- | ---------------- |  | - | ----- | - |  | - | ----- | - |  | ---- | -
|                                   |  | Three months ended June 30, |     |   | PercentageChange |   |     | Six months ended June 30, |  |      | PercentageChange | 
|(In thousands, except percentages) |  | 2007                        |     |   | 2006             |   |     |                           |  |      | 2007             |  |   | 2006  |   |  |   |      
|Salaries and wages                 |  | $                           | 805 |   |                  | $ | 957 |                           |  | (16  | )%               |  | $ | 1,774 |   |  | $ | 1,703 |   |  | 4    | %
|As a percent of revenue            |  |                             | 13  | % |                  |   | 4   | %                         |  | 9ppt |                  |  |   | 12    | % |  |   | 5     | % |  | 7ppt |  

Salaries and wages include non-sales employee and officer salaries and related benefits including bonuses.
Salaries and wages decreased $152,000 during the three months ended June 30, 2007, due primarily to the fact that there were officers bonuses paid in second quarter of 2006 that were not paid in 2007. There were also modest administrative
and online services staff reductions during this period.

Salaries and wages increased $71,000 during the six months ended June 30, 2007 due primarily
to the increase in stock compensation expense of $54,000.

Professional Fees



|                                   |  |                             |     |   |                  |   |     |                           |  |      |                  |  |   |      |   |  |   |     |   |  |      |  
|---------------------------------- |  | --------------------------- | --- | - | ---------------- | - | --- | ------------------------- |  | ---- | ---------------- |  | - | ---- | - |  | - | --- | - |  | ---- | -
|                                   |  | Three months ended June 30, |     |   | PercentageChange |   |     | Six months ended June 30, |  |      | PercentageChange | 
|(In thousands, except percentages) |  | 2007                        |     |   | 2006             |   |     |                           |  |      | 2007             |  |   | 2006 |   |  |   |    
|Professional fees                  |  | $                           | 292 |   |                  | $ | 302 |                           |  | (3   | )%               |  | $ | 614  |   |  | $ | 583 |   |  | 5    | %
|As a percent of revenue            |  |                             | 5   | % |                  |   | 1   | %                         |  | 4ppt |                  |  |   | 4    | % |  |   | 2   | % |  | 2ppt |  

Professional fees include accounting fees, legal fees and valuation expenses for our investments. The increase in
professional fees for the six months ended June 30, 2007 relates to a modest increase in legal fees related to various projects during the six months ended June 30, 2007.

Sales and Marketing



|                                   |  |                             |     |   |                  |   |     |                           |  |      |                  |  |   |       |   |  |   |       |   |  |      |   
|---------------------------------- |  | --------------------------- | --- | - | ---------------- | - | --- | ------------------------- |  | ---- | ---------------- |  | - | ----- | - |  | - | ----- | - |  | ---- | --
|                                   |  | Three months ended June 30, |     |   | PercentageChange |   |     | Six months ended June 30, |  |      | PercentageChange | 
|(In thousands, except percentages) |  | 2007                        |     |   | 2006             |   |     |                           |  |      | 2007             |  |   | 2006  |   |  |   |      
|Sales and marketing                |  | $                           | 458 |   |                  | $ | 936 |                           |  | (51  | )%               |  | $ | 1,090 |   |  | $ | 1,764 |   |  | (38  | )%
|As a percent of revenue            |  |                             | 7   | % |                  |   | 4   | %                         |  | 3ppt |                  |  |   | 8     | % |  |   | 5     | % |  | 3ppt |   

Sales and marketing expenses include advertising, marketing, salaries, wages and commissions paid to sales
personnel, commissions paid to outside service providers, travel and other selling expenses. Commissions decreased $101,000 and $154,000 for the three and six months ended June 30, 2007, respectively, as a result of using less outside service
providers for the purpose of selling strategic alliance agreements. Salaries, wages and commissions paid to sales related employees decreased $264,000 and $604,000 for the three and six months ended June 30, 2007, respectively, due to lower
commissions related to lower technology transfer income.



Page 30 of 39



---

We have implemented certain changes in our sales and marketing division in an effort to increase sales leads, and
eventually sales, without incurring substantial additional costs.

General and Administrative



|                                   |  |                             |     |   |                  |   |     |                           |  |      |                  |  |   |       |   |  |   |       |   |  |      |   
|---------------------------------- |  | --------------------------- | --- | - | ---------------- | - | --- | ------------------------- |  | ---- | ---------------- |  | - | ----- | - |  | - | ----- | - |  | ---- | --
|                                   |  | Three months ended June 30, |     |   | PercentageChange |   |     | Six months ended June 30, |  |      | PercentageChange | 
|(In thousands, except percentages) |  | 2007                        |     |   | 2006             |   |     |                           |  |      | 2007             |  |   | 2006  |   |  |   |      
|General and administrative         |  | $                           | 608 |   |                  | $ | 768 |                           |  | (21  | )%               |  | $ | 1,440 |   |  | $ | 2,072 |   |  | (31  | )%
|As a percent of revenue            |  |                             | 10  | % |                  |   | 3   | %                         |  | 7ppt |                  |  |   | 10    | % |  |   | 6     | % |  | 4ppt |   

The decrease in general and administrative costs for the three months ended June 30, 2007 is primarily
attributable to a decrease in employee related costs due to the reduction in commissions and salaries and certain outside services that were not utilized in 2007.

The decrease in general and administrative costs for the six months ended June 30, 2007 is primarily attributable to a decrease in contributions expense of $663,000. During the three months ended March 31, 2006, the Company made a
gift of 5.1 million shares of Hydroflo, Inc. common stock to certain not-for-profit institutions. The stock was fair valued at $663,000 at the time of the gift. In addition, we have been implementing cost cutting polices throughout the Company.

Goodwill Impairment

During the six months
ended June 30, 2007, we recorded a partial impairment of the goodwill related to the Pharma Transfer acquisition of $33,000 as a result of our annual impairment analysis. During the six months ended June 30, 2006, we recorded a total
impairment of the goodwill for UTEKip, Ltd. of $235,000 as a result of changing the focus of the Israel operations from software to technology transfer.

Net Realized Gains (Losses) on Investments



|                                   |  |                             |     |                  |      |   |                           |  |                  |      |  |   |        |   |  |   |       |  |      |   
|---------------------------------- |  | --------------------------- | --- | ---------------- | ---- | - | ------------------------- |  | ---------------- | ---- |  | - | ------ | - |  | - | ----- |  | ---- | --
|                                   |  | Three months ended June 30, |     | PercentageChange |      |   | Six months ended June 30, |  | PercentageChange |     
|(In thousands, except percentages) |  | 2007                        |     |                  | 2006 |   |                           |  |                  | 2007 |  |   | 2006   |   |  |  
|Realized gains/ (losses)           |  | $                           | (41 | )                |      | $ | 1,830                     |  | (102             | )%   |  | $ | (1,138 | ) |  | $ | 2,212 |  | (151 | )%

Net realized gains (losses) on investments, net of income tax effect, amounted to ($40,648) for the three months
ended June 30, 2007 and were related to sales as follows:



|                                 |  |                  |  |                      |         |  
|-------------------------------- |  | ---------------- |  | -------------------- | ------- | -
|Company Name                     |  | Number of Shares |  | Realized Gain (Loss) |        
|American Soil Technologies, Inc. |  | 84,284           |  | $                    | 110     |  
|Shumate Industries, Inc.         |  | 16,085           |  |                      | 10,337  |  
|Swiss Medica, Inc.               |  | 100,000          |  |                      | (11,252 | )
|Broadcast International, Inc.    |  | 70,500           |  |                      | (20,557 | )
|Rival Technologies, Inc.         |  | 41,500           |  |                      | 7,398   |  
|Power3 Medical Products, Inc.    |  | 36,033           |  |                      | (26,684 | )
|                                 |  |                  |  |                      |         |  
|Total                            |  |                  |  | $                    | (40,648 | )
|                                 |  |                  |  |                      |         |  



Page 31 of 39



---

Net realized gains (losses) on investments, net of income tax effect, amounted to $1,829,711 for the three months ended
June 30, 2006 and were related to sales as follows:



|                                              |  |                  |  |                      |           |  
|--------------------------------------------- |  | ---------------- |  | -------------------- | --------- | -
|Company Name                                  |  | Number of Shares |  | Realized Gain (Loss) |          
|Sequiam Corp.                                 |  | 85,000           |  | $                    | 2,069     |  
|INYX, Inc.                                    |  | 29,999           |  |                      | 29,733    |  
|Circle Group Holdings, Inc.                   |  | 458,900          |  |                      | 196,039   |  
|Israel Technology Acquisition Corp.           |  | 50,000           |  |                      | 6,732     |  
|Israel Technology Acquisition Corp. -warrants |  | 100,000          |  |                      | 2,739     |  
|Fortress America Acquisition Corp.            |  | 40,000           |  |                      | 18,971    |  
|Xethanol Corp.                                |  | 273,410          |  |                      | 1,583,771 |  
|eFoodSafety.com, Inc.                         |  | 61,224           |  |                      | (3,380    | )
|HydroFlo, Inc. (1)                            |  | 400,000          |  |                      | (6,963    | )
|                                              |  |                  |  |                      |           |  
|Total                                         |  |                  |  | $                    | 1,829,711 |  
|                                              |  |                  |  |                      |           |  

Net realized gains (losses) on investments, net of income tax effect, amounted to ($1,138,280) for the six months
ended June 30, 2007 and were related to sales as follows:



|                                       |  |                  |  |                      |           |  
|-------------------------------------- |  | ---------------- |  | -------------------- | --------- | -
|Company Name                           |  | Number of Shares |  | Realized Gain (Loss) |          
|Advanced Refractive Technologies, Inc. |  | 1,533,333        |  | $                    | (46,064   | )
|American Soil Technologies, Inc.       |  | 87,555           |  |                      | 114       |  
|Shumate Industries, Inc.               |  | 171,432          |  |                      | 127,234   |  
|Health Sciences Group, Inc.            |  | 2,242,000        |  |                      | (619,815  | )
|Swiss Medica, Inc.                     |  | 950,000          |  |                      | (104,828  | )
|Xethanol Corporation                   |  | 136,838          |  |                      | (378,935  | )
|Broadcast International, Inc.          |  | 80,500           |  |                      | (24,624   | )
|Rival Technologies, Inc.               |  | 41,500           |  |                      | 7,398     |  
|Power3 Medical Products, Inc.          |  | 36,033           |  |                      | (26,684   | )
|Manakoa Services Corporation           |  | 578,958          |  |                      | (72,076   | )
|                                       |  |                  |  |                      |           |  
|Total                                  |  |                  |  | ($                   | 1,138,280 | )
|                                       |  |                  |  |                      |           |  

Net realized gains (losses) on investments, net of income tax effect, amounted to $2,212,297 for the six months
ended June 30, 2006 and were related to sales as follows:



|                                              |  |                  |  |                      |           |  
|--------------------------------------------- |  | ---------------- |  | -------------------- | --------- | -
|Company Name                                  |  | Number of Shares |  | Realized Gain (Loss) |          
|Sequiam Corp.                                 |  | 645,000          |  | $                    | 3,015     |  
|INYX, Inc.                                    |  | 29,999           |  |                      | 29,733    |  
|Swiss Medica, Inc.                            |  | 300,000          |  |                      | (3,661    | )
|Circle Group Holdings, Inc.                   |  | 973,508          |  |                      | 395,271   |  
|Israel Technology Acquisition Corp.           |  | 50,000           |  |                      | 6,732     |  
|Israel Technology Acquisition Corp. -warrants |  | 100,000          |  |                      | 2,739     |  
|Fortress America Acquisition Corp.            |  | 40,000           |  |                      | 18,971    |  
|Xethanol Corp.                                |  | 424,172          |  |                      | 1,822,725 |  
|eFoodSafety.com, Inc.                         |  | 61,224           |  |                      | (3,380    | )
|HydroFlo, Inc. (1)                            |  | 5,538,162        |  |                      | (38,162   | )
|Genethera, Inc.                               |  | 14,796           |  |                      | (21,583   | )
|Magic Media Networks, Inc.                    |  | 30,000           |  |                      | (103      | )
|                                              |  |                  |  |                      |           |  
|Total                                         |  |                  |  | $                    | 2,212,297 |  
|                                              |  |                  |  |                      |           |  

---

|(1) | The Company elected to abandon its right title and interest in and to 400,000 shares common stock of HydroFlo, Inc.
|--- | -------------------------------------------------------------------------------------------------------------------



Page 32 of 39



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Changes in Unrealized Appreciation or Depreciation on Investments

We determine the value of each investment in our portfolio on a quarterly basis, and changes in value result in unrealized appreciation or depreciation being recognized.
At June 30, 2007, approximately 59% of our net assets represented investments recorded at fair value. Value, as defined in Section 2(a)(41) of the Investment Company Act of 1940, is (i) the market price for those securities for which
a market quotation is readily available and (ii) for all other securities and assets, fair value is as determined in good faith by the Board of Directors. Although many of the securities we hold in our portfolio are quoted on the OTC Bulletin
Board or listed on the American Stock Exchange, our Board of Directors is required to determine the fair value of such securities if the validity of the market quotations appears to be questionable, or if the number of quotations is such as to
indicate that there is a thin market in the security. The fair value of these securities is frequently less than the market quotations for such securities. Because there is typically no readily available market value for the investments in our
portfolio, we value substantially all of our investments at fair value as determined in good faith by the Board of Directors. In making its determination, our Board of Directors may consider valuation appraisals provided by independent valuation
service providers. Because of the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments determined in good faith by the Board of Directors may differ
significantly from the values that would have been used had a ready market existed for the investments, and the differences could be material.



|                                        |  |                             |        |   |                  |   |      |                           |  |                  |      |  |   |        |   |  |   |       |  |      |   
|--------------------------------------- |  | --------------------------- | ------ | - | ---------------- | - | ---- | ------------------------- |  | ---------------- | ---- |  | - | ------ | - |  | - | ----- |  | ---- | --
|                                        |  | Three months ended June 30, |        |   | PercentageChange |   |      | Six months ended June 30, |  | PercentageChange |     
|(In thousands, except percentages)      |  | 2007                        |        |   | 2006             |   |      |                           |  |                  | 2007 |  |   | 2006   |   |  |  
|Unrealized appreciation/ (depreciation) |  | $                           | (5,480 | ) |                  | $ | (537 | )                         |  | (920             | )%   |  | $ | (7,022 | ) |  | $ | 1,028 |  | (783 | )%

Net change in unrealized depreciation on investments, net of income tax effect, amounted to ($5,479,917) for the
three months ended June 30, 2007 and was related to our investments as follows:



|                                       |  |                                         |            |  
|-------------------------------------- |  | --------------------------------------- | ---------- | -
|Company Name                           |  | NetUnrealizedAppreciation(Depreciation) |           
|DME Interactive Holdings, Inc.         |  | $                                       | (777,629   | )
|Klegg Electronics, Inc.                |  |                                         | (1,276,932 | )
|Manakoa Services Company               |  |                                         | (608,884   | )
|Advanced Refractive Technologies, Inc. |  |                                         | (430,664   | )
|Avalon Oil & Gas, Inc.                 |  |                                         | (420,810   | )
|Industrial Biotechnology Corporation   |  |                                         | (424,054   | )
|American Soil Technologies, Inc.       |  |                                         | (379,159   | )
|Cyberlux Corporation                   |  |                                         | (251,663   | )
|All other investments                  |  |                                         | (910,122   | )
|                                       |  |                                         |            |  
|                                       |  | $                                       | (5,479,917 | )
|                                       |  |                                         |            |  

Net unrealized appreciation on investments, net of income tax effect, amounted to ($537,448) for the three months
ended June 30, 2006 and was related to our investments as follows:



|                                     |  |                                         |            |  
|------------------------------------ |  | --------------------------------------- | ---------- | -
|Company Name                         |  | NetUnrealizedAppreciation(Depreciation) |           
|Fuel FX International, Inc.          |  | $                                       | 1,852,523  |  
|Industrial Biotechnology Corporation |  |                                         | 1,168,232  |  
|KP Renewables Plc                    |  |                                         | (1,137,618 | )
|Trio Industries, Inc.                |  |                                         | (2,181,529 | )
|UBA Technology, Inc.                 |  |                                         | (1,216,026 | )
|UTEK Real Estate Holdings, Inc.      |  |                                         | 821,437    |  
|All other investments                |  |                                         | 155,533    |  
|                                     |  |                                         |            |  
|                                     |  | $                                       | (537,448   | )
|                                     |  |                                         |            |  



Page 33 of 39



---

Net change in unrealized depreciation on investments, net of income tax effect, amounted to ($7,022,245) for the six
months ended June 30, 2007 and was related to our investments as follows:



|                                     |  |                                         |            |  
|------------------------------------ |  | --------------------------------------- | ---------- | -
|Company Name                         |  | NetUnrealizedAppreciation(Depreciation) |           
|Avalon Oil & Gas, Inc.               |  | $                                       | (434,064   | )
|Cyberlux Corporation                 |  |                                         | (483,992   | )
|DME Interactive Holdings, Inc.       |  |                                         | (838,627   | )
|Klegg Electronics, Inc.              |  |                                         | (2,202,784 | )
|Industrial Biotechnology Corporation |  |                                         | (1,224,323 | )
|Fuel FX International, Inc.          |  |                                         | (766,589   | )
|UBA Technology, Inc.                 |  |                                         | (446,070   | )
|Manakoa Services Corporation         |  |                                         | (754,769   | )
|Health Sciences Group, Inc.          |  |                                         | 585,168    |  
|All other investments                |  |                                         | (456,195   | )
|                                     |  |                                         |            |  
|                                     |  | $                                       | (7,022,245 | )
|                                     |  |                                         |            |  

Net unrealized appreciation on investments, net of income tax effect, amounted to $1,027,518 for the six months
ended June 30, 2006 and was related to our investments as follows:



|                                |  |                                          |            |  
|------------------------------- |  | ---------------------------------------- | ---------- | -
|Company Name                    |  | Net UnrealizedAppreciation(Depreciation) |           
|Fuel FX International, Inc.     |  | $                                        | 1,852,523  |  
|KP Renewables Plc               |  |                                          | (1,226,426 | )
|Trio Industries, Inc.           |  |                                          | (657,464   | )
|UBA Technology, Inc.            |  |                                          | (1,223,761 | )
|UTEK Real Estate Holdings, Inc. |  |                                          | 872,386    |  
|Xethanol Corporation            |  |                                          | 1,989,710  |  
|All other investments           |  |                                          | (579,450   | )
|                                |  |                                          |            |  
|                                |  | $                                        | 1,027,518  |  
|                                |  |                                          |            |  

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

Liquidity and Capital Resources

As of June 30, 2007, we had cash and cash equivalents of $7.7 million. We also had investments in U.S.
Treasuries of $2.1 million. We typically invest our excess cash in U.S. Treasuries and certificates of deposit, which normally have three month to one year maturities. These investments do not qualify as cash equivalents.

We have financed substantially all of our operations since inception through the issuance of equity securities and, to a lesser extent, sales of investments, cash
received in connection with the provision of strategic alliance and other consulting services and the use of funds from our investments in U.S. Treasuries and certificates of deposit. Our primary source of liquidity and capital for the six months
ended June 30, 2007 was $2.5 million in net proceeds from the sale of U.S. Treasuries and $821,000 in proceeds generated from the sale of shares of our portfolio companies.

To date, our income from operations consists primarily of the sale of technology rights and consulting income from strategic alliances in exchange for securities rather than cash. In the six months ended June 30,
2007, 87% of our income from operations ($12.5 million) was paid in the form of equity securities. During the six months ended June 30, 2007, we used approximately $2.3 million to fund our technology transfer transactions and approximately $5.0
million for operating expenses. During the remainder of 2007, we expect our cash outlay for technology transfers will be scaled to available cash and that the cost of our operations should be similar to those incurred in 2006.



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During the six months ended June 30, 2007, we loaned UTEK Real Estate Holdings, Inc., one of our portfolio
companies, an additional $703,000 for real estate improvements and operations. We expect additional renovations to a separate building to begin this summer and be completed by the fall of 2007 with the additional cash outlay to be approximately
$200,000.

On December 1, 2006, our Board of Directors approved a special dividend of $0.02 per share that was paid on January 31, 2007 to
shareholders of record on January 12, 2007. Our Board of Directors will have sole discretion in determining whether to declare and pay cash dividends in the future. The declaration of cash dividends will depend on our profitability, financial
condition, cash requirements, future prospects and other factors deemed relevant by our Board of Directors. Our ability to pay cash dividends in the future could be limited or prohibited by regulatory requirements and the terms of financing
agreements that we may enter into or by the terms of any preferred stock that we may authorize and issue.

In February 2007, we obtained a $4,000,000
uncommitted bank line of credit with the Bank of Tampa. The advances on the line of credit accrue interest (payable monthly) at prime (presently 8.25%). The principal and any unpaid interest are due upon demand. This line is collateralized with
commercial real estate owned by UTEK Real Estate Holdings, Inc. As of June 30, 2007, we had no outstanding debt.

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

Critical Accounting Estimates

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

Valuation Methodology

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

Our equity interests in portfolio companies for which there is no liquid public market are valued using industry valuation benchmarks, and then the value is assigned a discount reflecting the illiquid nature of the
investment as well as our minority, non-control position. When an external event such as a purchase transaction, public offering, or subsequent equity sale occurs, the pricing indicated by the external event is used to corroborate our valuation. The
determined values are generally discounted to account for restrictions on resale and minority ownership positions. The value of our equity interests in public companies for which market quotations are readily available is based on the public market
price on the balance sheet date. Securities that carry certain restrictions on resale are typically valued at a discount from the public market value of the security.

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



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The fair value of our investments at June 30, 2007 and December 31, 2006 was determined by our board of
directors. We received valuation assistance from our independent valuation firm, Klaris, Thomson & Schroeder, Inc., on our entire investment portfolio at June 30, 2007 and December 31, 2006.

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

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

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

Share-Based Compensation

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

As a result of adopting SFAS 123(R), our net income from operations before taxes, net increase in net assets, basic earnings per
share and diluted earnings per share were approximately $278,000, $267,000, $0.03 and $0.03 lower, respectively, for the six months ended June 30, 2007 and $222,000, $138,000, $0.02 and $0.02 lower, respectively, for the six months ended
June 30, 2006.

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

Recently Issued Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an Amendment of FASB Statement No. 115. SFAS No. 159 permits an entity to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective as of the beginning
of an entitys first fiscal year that begins after November 15, 2007. We are currently evaluating SFAS No. 159; however, because the Companys investments are stated at fair value, the Company does not anticipate that any
adoption of SFAS No. 159 will have a significant impact, if any, on its results of operations or financial position.

In June 2007, the AICPA issued
Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. SOP 07-1
clarifies which entities are within the scope of the AICPA Audit and Accounting Guide Investment Companies (the "Guide") and is effective for fiscal years beginning on or after December 15, 2007. Companies that are regulated by the Investment
Company Act of 1940 are automatically within the scope of the Guide. As such, the adoption of SOP 07-1 will not affect the Company because it already adheres to the provisions of the Guide.

Upon adoption of SOP 07-1, a company must also adopt the provisions of FASB Staff Position (FSP) No. FIN 46R-7 Application of FASB Interpretation
No. 46R to Investment Companies. FSP No. FIN 46R-7 permanently exempts investment companies from applying the provisions of Interpretation 46R to investments carried at fair value.



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

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



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

Disclosure Controls and Procedures

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

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.

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 June 30, 2007, we were not a party to any material pending legal proceedings.



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

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

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

Not Applicable



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

Not Applicable



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

On
June 15, 2007, we held our Annual Meeting of Stockholders. The following matters were submitted to the stockholders for consideration:



| | 1. | To elect nine (9) of our directors of the Company who will serve for one (1) year, or until their successors are elected and qualified;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------



| | 2. | To ratify the selection of Pender Newkirk & Company LLP to serve as our registered independent public accounting firm for the Company for the year ending December 31,
2007; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | To approve an amendment to the Companys certificate of incorporation to increase the number of authorized shares of common stock.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------

The results of the shares voted with regard to each of these matters are as follows:

1. Election of Directors



|                               |  |           |  |         
|------------------------------ |  | --------- |  | --------
|Director                       |  | For       |  | Withheld
|Clifford M. Gross, Ph.D.       |  | 8,014,577 |  | 21,351  
|Sam Reiber, J.D.               |  | 8,018,118 |  | 17,810  
|Kwabena Gyimah-Brempong, Ph.D. |  | 8,003,493 |  | 32,435  
|Holly Callen Hamilton          |  | 8,016,918 |  | 19,010  
|Keith Witter, J.D.             |  | 8,017,518 |  | 18,410  
|Stuart Brooks, M.D.            |  | 7,796,053 |  | 239,875 
|John J. Micek, J.D.            |  | 9,017,090 |  | 18,838  
|Francis Maude                  |  | 7,795,493 |  | 240,435 
|Arthur Chapnik                 |  | 8,017,118 |  | 18,810  



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2. Ratification of the selection of Pender Newkirk & Company LLP



|          |  |          |  |        
|--------- |  | -------- |  | -------
|For       |  | Withheld |  | Abstain
|7,991,098 |  | 34,384   |  | 10,446 

3. Approval to amend the Companys certificate of incorporation to increase the number of
authorized shares of common stock.



|          |  |          |  |        
|--------- |  | -------- |  | -------
|For       |  | Withheld |  | Abstain
|7,656,228 |  | 289,881  |  | 89,819 



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

Not Applicable



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

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



|     |  |   |  |                                                                                                                                          
|---- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------
|     |  |  
|3.1  |  |  |  | Certificate of Amendment dated July 12, 2007 (increasing authorization of number of shares of common stock from 19 million to 29 million)
|     |  |  
|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: August 3rd, 2007 |  | /s/ Clifford M. Gross               
|                       |  | Clifford M. Gross, Ph.D.            
|                       |  | Chairman and Chief Executive Officer
|                       | 
|Date: August 3rd, 2007 |  | /s/ Carole R. Wright                
|                       |  | Carole R. Wright, CPA               
|                       |  | Chief Financial Officer             



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