UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  (Mark One)  [X] ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended December
31, 2008 or  [  ] TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For
the transition period from to  Commission file number  UTEC,
INC. (Exact name of registrant
as specified in its charter)  NEVADA 20-5936198 State
or other jurisdiction of
                                                                                     (I.R.S.
Employer incorporation
or organization
                                                                                   Identification
No.) 2420
SPRINGER DRIVE SUITE 110 NORMAN, OK 73069 (Address
of principal executive offices) (Zip Code)  Registrants telephone number,
including area code (405) 947-0765  Securities registered pursuant to
Section 12(b) of the Act:  Title of each
class   Securities registered pursuant to
section 12(g) of the Act:  (Title of class)  (Title of class)  Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. [form10kv2clean002.gif] Yes      [form10kv2clean004.gif]   No Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. [form10kv2clean006.gif] Yes      [form10kv2clean008.gif]   No  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 
[form10kv2clean010.gif] NO [form10kv2clean012.gif]       Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§
229.405 of this chapter) is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [form10kv2clean014.gif]  Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. Large
accelerated filer   [form10kv2clean016.gif] Accelerated
filer [form10kv2clean018.gif] Non-accelerated
filer  (Do not check if a smaller reporting company) [form10kv2clean020.gif]                                      
Smaller reporting company  [form10kv2clean022.gif]   Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the
Act).         [form10kv2clean024.gif] Yes      [form10kv2clean026.gif] No  State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the registrants
most recently completed second fiscal quarter.  Note.If a determination as to
whether a particular person or entity is an affiliate cannot be made without
involving unreasonable effort and expense, the aggregate market value of the
common stock held by non-affiliates may be calculated on the basis of
assumptions reasonable under the circumstances, provided that the assumptions
are set forth in this Form.  (APPLICABLE ONLY TO CORPORATE
REGISTRANTS)  Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.  DOCUMENTS INCORPORATED BY
REFERENCE  List hereunder the following documents if
incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) Any annual report to security
holders; (2) Any proxy or information statement; and (3) Any prospectus filed
pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1980).  FORWARD-LOOKING STATEMENTS Certain of the
statements made or incorporated by reference in this Form 10-K, including those
under Managements Discussion and Analysis of Financial Condition and Results
of Operations, and elsewhere in this report, may constitute forward-looking
statements within the meaning of, and subject to the protections of,
Section 27A of the Securities Act of 1933, as amended (the Securities
Act), and Section 21E of the Securities Exchange Act of 1934, as amended
(the Exchange Act). Forward-looking
statements include statements with respect to our beliefs, plans, objectives,
goals, targets, expectations, anticipations, assumptions, estimates, intentions
and future performance, and involve known and unknown risks, uncertainties and
other factors, many of which may be beyond our control, and which may cause the
actual results, performance or achievements of the Company, or the commercial
banking industry or economy generally, to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. All statements
other than statements of historical fact are statements that may be
forward-looking statements. You can identify these forward-looking statements
through our use of words such as may, will, anticipate, assume,
should, indicate, would, believe, contemplate, expect, estimate,
continue, plan, target, point to, project, predict, could,
intend, target, potential, and other similar words and expressions of the
future or otherwise regarding the outlook for the Companys future business and
financial performance. All written or
oral forward-looking statements that are made by or are attributable to us are
expressly qualified in their entirety by this cautionary notice. You should not
place undue reliance on any forward-looking statements, since those statements
speak only as of the date that they are made. We have no obligation and do not
undertake to publicly update, revise or correct any of the forward-looking
statements after the date of this report, or after the respective dates on which
such statements otherwise are made, whether as a result of new information,
future events or otherwise, except as may otherwise be required by law.       PART I  Item 1. Business.  General Information  Except for statements of historical fact, certain
information in this document contains forward-looking statements that involve
substantial risks and uncertainties.  You can identify these statements by
forward-looking words such as anticipate, believe, could, estimate,
expect, intend, may, should, will, would, or similar words.
 The statements that contain these or similar words should be read
carefully because these statements discuss our future expectations, contain
projections of our future results of operations, or of our financial position,
or state other forward-looking information.  UTEC, Inc. (The Company)
believes that it is important to communicate our future expectations to our
investors.  However, there may be events in the future that we are not able
to accurately predict or control.  Further, we urge you to be cautious of
the forward-looking statements that are contained in this Form 10-K because they
involve risks, uncertainties and other factors affecting our operations, market
growth, service, products and licenses.  These factors may cause our actual
results to and achievements, whether expressed or implied, to differ materially
from the expectations we describe in our forward-looking statements.  The
occurrence of any of these events could have a material adverse effect on our
business, results of operations and financial position.  The information provided in this section of the
application is widely available to the public and partially compiled by
organizations like the Institute of Makers of Explosives (IME) whose web site is
http://www.ime.org/.  The other industry source for such information is the
International Society of Explosives Engineers (ISEE) whose web site is
http://www.isee.org/.  As such, the information is widely available to the
public, and has been disseminated in reports, conferences, training classes,
regularly scheduled meetings and trade shows. In addition, other associated
trade organizations like the NSSGA, the National Stone, Sand and Gravel
Association, which on Feb. 12, 2001 was formed through the merger of the
National Stone Association and National Aggregates Association
(http://www.nssga.org/).  Individual states also have local stone and
aggregate associations, as well as surface mining associations and underground
mining groups. Information on all of these organizations is well documented in
the public domain, and widely available over the Internet or public
libraries.  Corporate History  The Company, a Nevada corporation, was originally
organized on November 8, 1993 as B-N-B Enterprises Inc. for the purpose of
engaging in any lawful activity.  In March of 1998 the company changed its
name to All-West Systems International Inc. In September of 2004 the Company
again changed its name to Lyon Capital Venture Group on August 31, 2006 and
there was a management change. Lyon Capital Venture Group acquired the assets of
UTEC Corporation in January 2007, and formally changed its name to UTEC Inc., a
Nevada Corporation, in March of 2007.  The Primary SIC  Industry
Classification of UTEC Inc. is 4955 - Hazardous Waste Management and the
companys business Stage is a Development Stage Company  From November 8, 1993, until it acquired UTEC
Corporation. in January 2007, the Company was a developmental stage company
without any operations.  The business of the wholly owned subsidiary of the
Company, UTEC Corporation, comprises the entire business of the Company. The
Company was in the development stage through December 31, 2006, and the year
ended December 31, 2007, is the first year during which the Company is
considered an operating company and is no longer in the development stage.  On January 10, 2007, the Company entered into an
agreement with Energetic Systems Inc., LLC to acquire 100% of the shares of UTEC
Corporation for a total consideration of 22,500,000 of the companys par value
$0.001 common shares and 20,000 of the companys par value $0.001 preferred
shares.  The Technical and Manufacturing Headquarters of the Company are
located at 8500 South East Jayhawk Drive, PO Box 320, Riverton Kansas, 66770.
 Its business office is located at Suite 110, 2420 Springer Drive, Norman,
Oklahoma, 73069.  The Company operates on the calendar fiscal year ending
December 31st.  Currently, the Company has 12 employees, all employed by
UTEC Corporation, now a wholly owned subsidiary of the Company.  Prior to the transaction with Lyon Capital Venture Corp.,
Messrs. Villamagna and Taylor were Executive Directors of UTEC Corporation, and
tasked with finding a means of increasing the sales, market presence and
critical mass of UTEC. These were not full time roles at the time (2006), and
Mr. Villamagna provided management services through Red Stone Management
Services, LLC, a limited liability company in which Mr. Villamagna is a managing
member.  From the period of 2002 to 2006, Energetic Systems, LLC
(a company jointly owned American Pacific Corporation (ticker: apfc)) was sole
owner of UTEC Corporation, LLC., the predecessor company to UTEC Corporation.
During the same period (2002-2006), Mr. Taylor served as CEO of Energetic
Systems Inc., LLC., a major shareholder in the Company. From January 2007, Mr.
Taylor served on the Companys board as a Director, and as Co-Chairman and
Corporate Secretary.       Business of Issuer  For more than 30 years, the predecessor companies to the
Companys subsidiary have been involved in the research and development of
commercial explosive products used by the construction, quarrying and mining
industries in North America and elsewhere in the world.  The legacy
business of the company actually had its start in the commercial explosives
business of Gulf Oil Limited, and one of the sites currently occupied by the
Company is a former coal mine which was mined by a subsidiary of Gulf Oil, and
served as Gulf Explosives bulk truck garage, etc.  The Company operates three marketing units, all under the
management of Dr. Fortunato Villamagna, Managing Director and CEO.  1. Energetic Materials, which includes the development
and testing of commercial explosives.  2. Specialty Chemicals and Raw Materials, which
distributes chemicals that are used in commercial explosives; and  3. Hazardous Chemicals and Biological Waste Destruction,
a marketing unit that utilizes a new patented technology for the destruction of
biological waste and other hazardous chemicals and military munitions.
 This marketing unit is commercializing the Cold Plasma Oxidizer Technology
for the total and complete destruction of solid and liquid hazardous chemicals
and biological waste.  The subsequent subsections will describe the products
and services the Company provides its customers, but the Company does not have
a list of commercial or consumer products. The primary offerings of the Company
are testing services, which include (i) performance assessment of energetic
materials, (ii) analysis of energetic materials, (iii) velocity of detonation
testing, (iv) detonation pressure testing, (v) underwater energy testing, (vi)
detonator and gap sensitivity testing, (vii) impact, friction and thermal
stability safety testing, (viii) testing required by the DOT and ATF, (ix)
international freight safety testing and (x) related activities.  Testing services are conducted for third party companies,
but as with any outsourced work, the activities, customers, products and results
are held under confidentiality agreements with each customer. The Company is not
at liberty to disclose the specifics of this information, as doing so could
jeopardize the relationships of the third party outsourcers with their own
customers, and irreparably jeopardize their customer relationships.  The principal end product from these activities are the
compositions of formulae that are developed, the embodiment of the products that
are developed, or the features of the products that are developed. The
developments belong to the company that funded the work or outsourced the work,
and the Companys revenue is derived from the services and expertise
provided.  From time to time the Company also licenses proprietary
technology, and receives license fees from licensees. These activities generally
relate to patents, intellectual property, or know-how the company owns, and the
licensing of the rights to the intellectual property know-how or expertise to
other companies.  In addition, while the Company does not manufacture
consumer or commercial products under its own brands and brand names, the
Company conducts custom manufacturing for other companies under confidential
private label contracts. Under these arrangements the Company provides contract
manufacturing services to produce products for other companies under their
labels.  The Specialty Chemicals & Raw Materials segment does
manufacture a product called  SNAP, which is sold to other companies as an
additive to their products. Other products potentially sold in this segment
include aluminum powder, guar gum, or any other trading opportunity that may
present itself. These products are not manufactured by the Company, but
purchased for resale.  The Hazardous Chemicals & Biological Waste
Destruction segment is developmental and currently does not sell any units. In
fact, the business will not sell these units in the future but instead plans to
lease them. The product names and trade names will be disclosed once complete
systems are ready for sale. The Company anticipates these products entering the
market in 2009  The Company services domestic and international energetic
materials businesses, both in the commercial and munitions businesses. The
customer base has been discussed in other sections of this document, but the
Companys customers represent most of the commercial explosives producers, the
ATF, DOT, and other government agencies.  In the event that the Company needs to purchase raw
materials, the materials required are conventional commodity chemicals, which
can be purchased domestically or internationally. Given the generic nature of
the raw materials used, they can be obtained from thousands of suppliers.  The Company works in the energetic materials, hazardous
chemicals, and related industries, and as such the Company has always been a
strong supporter of government regulatory efforts, as these efforts can only
improve the health and safety of the Industry. In fact, some of the services the
company offers is to help customers carry out the required testing to qualify
for DOT transportation ratings and      approvals, storage approvals,
and process safety assessments. The industries in which the Company operates in
have always been very heavily regulated, and the company has developed
considerable expertise with regulatory approvals that it provides to
customers.  Energetic Materials Marketing Unit  This marketing unit is comprised of the companys legacy
business which includes the research, development and testing of commercial
explosives.  The technical and manufacturing headquarters are located in
Riverton, Kansas, on a two-acre site, which also has a laboratory.  In
addition, the company has a pilot plant facility with an Underwater Testing
capability and a full-scale production facility (PRUF  Plant  Propellant Reuse
Facility) located on a separate 640 acre site near Hallowell, Kansas.  It is the Companys belief that today, the Company is one
of a very few independent research and testing businesses in the word, located
in the most competitive and innovative marketplace for commercial explosives and
energetic materials, capable of performing large scale underwater energy tests.  The Companys customers include companies owned by Orica
Limited. and Dyno Nobel (both publicly listed Australian companies) and are the
top two global commercial explosives companies. Both have their own research and
development facilities, but choose the Company to provide additional services
because of our low cost structure, customer focus, rapid response and quality.
While Orica and Dyno represent the two largest explosives producers of
commercial explosives in North America, they represent only a sampling of the
companys customer base. The Company currently provides testing, contract
research and support services to most of the commercial explosives companies in
North America, as well as several international companies. For the twelve months
ended December 31, 2008, Dyno and Orica accounted for less than 30% of total
revenue. The top ten customers account for 85% of revenue.  As stated, the Companys services have been utilized by
most of the other major U.S. commercial explosives producers as well.
 Either directly or through subcontracts, the US Department of Defense,
Department of Transportation, the Bureau of Alcohol, Tobacco, Firearms and
Explosives, and other government agencies have also used the Companys services.
 Equally important, the Companys customers also include multinational
automotive air bag manufacturers, gas generating manufacturers, energetic device
manufacturers.  Companies that produce gas-generating devices (such as air
bag inflators) represent a rapidly growing segment for the Company. Also, the
Company has been a subcontractor on a number of demilitarization programs.  The domestic commercial explosives business consists of
Orica Limited and Dyno Nobel, plus over thirty (30) other producers. The Company
has conducted testing work for many of these producers, plus the raw material
suppliers to this industry. The total number of domestic explosives producers
can be obtained from lists published by the Institute of makers of Explosives
(IME) http://www.ime.org), and the International Society of Explosives Engineers
(ISEE) (http://www.isee.org/).  Specialty Chemicals & Raw Materials  The Specialty Chemicals & Raw Materials Marketing
Unit is focused on the commercial explosives industry and is synergistic with
the companys energetic materials business unit.  The objective of this
business unit is to be recognized as an international supplier of specialty
chemicals to manufacturers in the commercial explosive industry.  Based on
sales this year, this business unit expects to generate increased revenues.
 These sales were based solely on specialty chemicals and raw material
sales to overseas customers.  The Companys strengths lie in providing
quality and timely services to its customers for a broad range of chemicals.
 The Company will continue to penetrate the international market from Asia
to Latin America, by creating strategic alliances with customers and raw
material suppliers across the globe.  The Company is currently working on initiatives both
domestically and internationally, and intends to capitalize on a recent
technological invention (patent pending) on the next generation of emulsifiers
for use in commercial explosives. During the past year, the Company has entered
into supply agreements, typically simple purchase agreements (purchase orders),
in the ordinary course of business with companies in India for raw materials and
an ingredient for the synthesis of emulsifier.  Hazardous Chemicals & Biological Waste
Destruction  In March of 2007, the Company entered into an agreement
with Ceramatec Inc., of Salt Lake City, Utah, and licensed the worldwide
exclusive rights to manufacture and market a Waste Destruction System utilizing
the Cold Plasma Oxidizer Technology.  The license agreement with Ceramatec
gives the Company sole marketing and sales rights to this unique technology as
it relates to the hazardous waste destruction market segment. The Ceramatec
agreement is a simple licensing and supplies agreement, which stipulates that in
order to maintain exclusivity a minimum number of units must be ordered from
Ceramatec every year. The number for 2008 is two, and the number for 2009 is
four. As of December 31, 2008 all of the 2008 ordering requirements have been
met. If any of the conditions of the agreement are not met, the license reverts
to non-exclusive, but the Company retains all other rights.  The Hazardous Chemicals and Biological Waste Destruction
Marketing Unit provides commercial solutions for the processing of chemical and
biological wastes into carbon dioxide and water.  The Companys advanced
waste treatment technologies are suitable for      a variety of industrial,
hazardous, municipal, and clinical waste streams and offer an extremely cost
effective and novel way that allows customers to destroy their own hazardous
chemicals and biological waste in-house, on-demand. While the Company will
manufacture Waste Destruction equipment, the Company does not destroy wastes in
any of its facilities, as the customers of that equipment on their premises
carry out this activity. By using the Companys equipment as a part of the
overall process, most customers may not be classified as generators of hazardous
waste.  The testing of explosives is also a benign activity,
since the testing is designed to measure detonation properties. As such, the
explosive completely detonates and the composition reacts, releasing no more
residues than are found in any commercial blasting application for quarries
found in most cities, trenching applications done by utility companies, and
construction blasting for new residential and commercial land development and
preparation.  The Hazardous Chemicals and Biological Waste Destruction
Business Unit provides commercial solutions for the processing of chemical and
biological wastes into carbon dioxide and water.  The Companys advanced
waste treatment technologies are suitable for a variety of industrial,
hazardous, municipal, and clinical waste streams..  Incineration, the standard disposal method for solid
hospital wastes, gives off carbon dioxide and nitrogen containing gases that
pollute the atmosphere.  Utilizing the Companys waste destruction
technology provides a sophisticated waste management program that addresses the
need for waste destruction, while at the same time avoiding the production of
toxic by-products. Compact size, lightweight, excellent environmental
performance and ease of operation are among the many advantages this technology
offers.  The three initial potential market segments identified
with great potential are energetic materials, hazardous chemicals, and
biological wastes.  These three market segments are already dealing with
the disposal of their waste material using traditional methodologies.  Each
year, however, disposal becomes more difficult and costly.  The Companys methodology of destroying waste will
provide for a unique, cost and logistically effective method of solving this
growing problem.  Additionally, this technology can be considered as green
technology, when compared with traditional methods.  The added potential of extracting useable work or energy
when this technology is used in the exothermic mode (heat/energy is released)
is an added benefit in that the excess energy in the form of heat can be
utilized within other facility operations.  The overall waste disposal/destruction industry is and
has been a growth industry for many years.  New and more rigorous
regulations are coming into effect each and every year.  The new and novel
aspect of our particular method and system of hazardous waste destruction has a
number of specific advantages over traditional methods:  1.  Hazardous waste can be treated/dealt with
on-site  2.  Units are compact, requiring only a small
footprint  3.  Units can be scaled up or down depending upon
the volume of material to be destructed  4.  The cost per unit is relatively inexpensive as
compared to the material being consumed or the cost of conventional
removal/destruction  5.  There is currently no direct competition that
replicates this method of hazardous waste destruction.  6.  This method can be considered as green
technology  7.  Operational modes can include the extraction of
energy (exothermic mode) for use within other aspects of an industrial site.  The Hazardous Chemicals and Biological Waste Destruction
Marketing Unit provides commercial solutions for the processing of chemical and
biological wastes into carbon dioxide and water.  As such, costs of compliance with environmental laws,
ongoing testing, and reporting requirements will be borne by the customers who
lease the companys equipment. Environmental costs to the company are limited to
consulting activities the company needs to undertake to provide its customers
(who may not have sophisticated in-house environmental groups) with regulatory
guidelines required by the state and federal authorities, plus testing during
start-up and commissioning. To date total consulting and testing costs have been
less than $10,000 for the past 18 months, and are not expected to materially
impact revenues in the future.  The preferred method of sales and marketing the units
will be to lease the units themselves.  This is expected to be attractive
to many customers in that the initial monetary outlay is reduced.  Further,
this approach affords an ongoing close relationship between the end-use
customers to ensure efficient use of the system.       The lease price will be a fee for each pound of waste
material destroyed by the unit.  Manufacturing Highlights  Manufacturing the Companys Waste Disposal Units, which
incorporates the Cold Plasma Oxidizer technology (scheduled to begin in 2008)
will involve the supply of certain key parts by the Licensor, with final
fabrication and assembly by contract engineering fabricators according to the
Companys specifications.  The Companys engineers will provide actual
design, assembly specifications, manufacturing and customer installation
oversight.  The fabrication of the BETA waste destruction units is being
done in-house, with some off-the-shelf components being purchased from domestic
companies and some of the fabrication being outsourced to fabrication shops in
the Kansas area.  Item 1A. Risk Factors.  Not
Applicable  Item 1B. Unresolved Staff
Comments.  None  Item 2. Properties.  The Technical and Manufacturing
Headquarters are located in Riverton, Kansas, on a two-acre site with an office
building. An Underwater Testing Lab and PRUF Plant is located on a separate six
hundred and forty acre site near Hallowell, Kansas.  The Business Office is
located in Norman, Oklahoma.  Item 3. Legal Proceedings.  None  Item 4. Submission of Matters to a
Vote of Security Holders.  None  PART II   Item 5. Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities.  The Companys common stock trades on the Over-The-Counter
Bulletin Board (OTC:BB) under the symbol UTEI.  The following table shows
the high and low trading prices for the past two years.  2008

2007High
Low

High
LowQtr 1
0.45
0.3

0.45
0.45Qtr 2
0.35
0.32

0.86
0.3Qtr 3
0.25
0.2

0.61
0.28Qtr 4
0.06
0.06

0.8
0.39  We did not make any dividend payments during the fiscal
years ended December 31, 2008 or 2007 and have no plans to pay dividends in the
foreseeable future.  We did not repurchase any shares of our common stock
during the fiscal year ended December 31, 2008 or 2007.  Transfer Agent: Island Stock Transfer, 100 Second Avenue
South, Suite 705S Saint Petersburg, FL 33701  The Company did not make any
repurchases of its securities during the year ended December 31, 2008.        Item 6.
Selected Financial Data.  Not Applicable  Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations.  2007 was the first year of operation
for the Company, after it acquired the UTEC Corporation from Energetic Systems
Inc.  In 2007,the Company was organized into three marketing units,
Energetic Materials, Specialty Chemicals and Raw Materials and Hazardous
Chemicals and Biological Waste Destruction.  The Companys historical
legacy business was primarily constituted by the first two marketing units and
almost exclusively within the commercial explosives market.  Revenue
comparisons are included from these two activities.  The new marketing unit, Hazardous
Chemicals and Biological Waste Destruction was in a development stage during the
year, and had no commercial revenues.  Focus during the year was on
licensing and validation of the Cold Plasma Oxidizer technology, and on the
development of the Companys Waste Destruction System, identification of
potential markets, and preparation of its business plan.  Revenues  Revenues in 2007 were $1,365,805
compared to $2,237,601 for the year ended December 31, 2008.  The legacy
explosives testing and services business generated $893,000, or 65% of total
revenues for December 31, 2007, and $968,000, or 43%, of the total revenues for
the year ended December 31, 2008.  Major activities that contributed to
this revenue were primarily in the areas of contract research and product
development and independent product testing.  In addition, revenues
totaling $472,000 for the year ended December 31, 2007, and $1,270,000 for the
year ended December 31, 2008, came from the Specialty Chemicals Unit through the
manufacture and sale of inorganic chemical sensitizers to customers engaged in
commercial explosives production.  We project that 2009 revenue will
increase with new business in both areas, but most specifically in the Specialty
Chemicals area as new materials are made available to customers, and
developments in new technologies are pursued.  Expenses  The Companys legacy business has
historically been service based with temporary employees retained on an as
needed basis to support manufacturing activities.  Wages in 2007 were
consistent with this trend with the wage and burden expense as a percent of
total expenses at 55%, totaling $868,000.  Wages dedicated to SG&A
activities amounted to $247,000, with the balance of $519,000 dedicated to
research and development. For the year ending December 31, 2008, the wage and
burden expense as a percent of total expenses was  32%, totaling $793,000
with wages dedicated to SG&A amounting to $423,000, with the balance of
$370,000 dedicated to research, development and services.  The Companys legacy business is
engaged in the research, development, testing and analysis of commercial
explosives.  Some of the R&D activities have been in the development of
new or improved technologies or new product development to be used internally
within the company.  The cost associated with such activities varies from
year to year and totals less than $100,000 over the calendar years 2007 and
2008.  Some of the other R&D activities
during the last two years have been in the testing, analysis and QC (quality
control) areas and the costs associated with these activities was about $300,000
in 2007 and 2008.  These costs are passed to the Companys customers, as
per the agreements the Company has with the various customers.  The Company owns all of the research
and testing facilities and these facilities are operated by Company
personnel/employees.  The Companys customers or licensees or any other
third parties operate none of the facilities.  Travel related expenses, which mostly
constitute business support and development activities, totaled $87,000, and
involved several trips overseas to pursue international business opportunities.
 The travel related expense for the year ended December 31, 2008 was
approximately $136,000.  This rate is higher than in previous periods due
to the high cost of air travel and fuel.  Company officers have also taken
several international trips to secure new business and pursue financing
opportunities.  Accounting and management expenses
totaling $143,000 for the year ended December 31, 2007, consisted of audit fees,
and financial and accounting services provided by related third parties for the
cost of the home office functions.  For the year ending December 31, 2008
the total expense was $63,000, which includes a $16,000 accrual.  The Company did not purchase any
capital items in 2007, with the exception of acquiring the exclusive right to
develop and market Cold Plasma Technology for the Waste Destruction Business
Unit from Ceramatec, Inc. (See Notes to Financial Statement 9).      In 2008, the Company purchased
approximately $168,000 of capital assets comprised of a combination of new
laptops, electronic instruments and waste destruction units purchased from
Ceramatec, Inc.  In the year ending December 31, 2008,
a significant reversal of amortization expense was recorded to reflect the
cancellation of the restricted stock issued to Directors, Officers and employees
of the Company in 2007, totaling $107,000.  These restricted shares were
replaced with options on March 26, 2008, and amortization of $96,750 was
recorded for the year ended December 31, 2008.  Assets  The Company invoices its services and
products as they are provided or shipped to its customers.  The majority of
its sales are to customers who are large privately held or publicly traded
organizations, many of whom have been in business for a number of years.
 As a consequence, the Companys record in collecting its accounts
receivable is exemplary.  Although the nature of the Companys business is
expected to grow and change in the next several years, it is not expected that
targeted customers profiles will differ significantly.  The Company
therefore does not anticipate a change in credit risk.  The Company was self-funding for most
of the year ended December 31, 2007, drawing periodically on a credit facility
provided to it by one of its shareholders.  The Company has also had to
rely on internally advanced short term funding for the year ended December 31,
2008, in the amount of $181,000.  The Company expects to satisfy this
amount in full during the first quarter of 2009.  In addition to accounts receivable,
the Company maintains a small inventory of supplies and materials necessary to
support its legacy manufacturing and testing business.  This inventory
turns regularly.  Some components are hazardous materials, and they are
stored by the Company in federally and state-regulated storage facilities.
 To the extent that any of the items included in inventory became obsolete
during the year, the items were written off and disposed of.  Intangible assets consist mainly of
the Companys portfolio of intellectual property which is the basis for the
Companys research and development and testing activities. Patents currently
held by the Company are listed in the table below:  DESCRIPTION
Serial No.
Filing Date
Reg. No.
Grant Date
Status/CommentsUS PATENTExplosive Compositions
06/844,459
03/26/86
4,718,954
01/12/88
EXPIREDOWNER:  UTEC Corporation,
L.L.C.No more maintenance fees due.Responsible Attorney:
 Mary M. LeeFOREIGN PATENTCanadaContinuous Perimeter
Explosive
2,341,942
03/22/01
2,341,942
05/04/04
ISSUEDOWNER:  UTEC Corporation,
L.L.C.Corresponds to 4580-074 & 075Annuities Due March
22.Expires 03/22/21.Foreign Associate:  Ridout &
MaybeeResponsible Attorney (U.S.):  Mary M. LeeUS PATENTExplosive Primer
08/687,861
07/26/96
5,763,816
06/09/98
ISSUEDOWNER:  UTEC Corporation,
L.L.C.Second Maintenance Fee Due 12/09/09Expires
07/26/16Responsible Attorney:  Mary M. LeeUS PATENT Continuous Explosive Charge
Assembly and Method for Loading Same in an Elongated Cavity
09/638,131
08/11/00
6,564,686
05/20/03
ISSUEDOWNER:  UTEC Corporation,
L.L.C.1st Maintenance Fee Due 11/20/06Expires 08/11/20
(PTA=0)(Continuation filed - See file no. 4580-081)Responsible
Attorney:  Mary M. Lee       US PATENT (Divisional)Continuous Explosive
Charge Assembly and Method for Loading Same in an Elongated Cavity
10/286,322
10/31/02
6,722,251
04/20/04
ISSUEDOWNER:  UTEC Corporation,
L.L.C.Divisional of 4580-0751st Maintenance Fee Due
10/20/07Expires 08/11/20 (PTA=0)Responsible Attorney:  Mary
M. LeeUS PATENTAlternative Use of Military
Propellants as Novel Blasting Agents
08/383,526
02/03/95
5,608,184
03/04/97
ISSUEDOWNER:  UTEC Corporation,
L.L.C.#3 Maintenance Fee Due 09/04/07Expires 02/03/15Possible Infringement by TPL in
arbitration.(see file no. 4580-095).Responsible attorney:
Mary M. LeeUS PATENTBeneficial Use of
Energy-Containing Wastes
08/353,950
12/12/94
5,612,507
03/18/97
EXPIREDCO-OWNED:  United Technologies
Corp. & UTEC Corporation, L.L.C.Expired 03-19-01 for nonpayment of
first maintenance fee.2nd maintenance fee not paid.Responsible
attorney:  UTCReceived info from UTC attorney George Romanik
07/01/05 regarding nonpayment of fees.US PATENTBeneficial Use of
Energy-Containing Wastes
08/249,328
05/26/94
5,536,897
07/16/96
EXPIREDCO-OWNED:  United Technologies
Corp. & UTEC Corporation, L.L.C.Expired 7-17-00 for nonpayment of
first maintenance fee.2nd maintenance fee not paid.Responsible
attorney:  UTCReceived info from UTC attorney George Romanik
07/01/05 regarding nonpayment of fees.US PATENTDevelopment of New High Energy
Blasting Products Using Demilitarized Ammonium Picrate
09/401,627
09/22/99
6,214,140
04/10/01
ISSUEDOWNER:  UTEC Corporation,
L.L.C.#2 Maintenance Fee Due 10/10/07Expires 09/22/19
(PTA=0)Responsible Attorney: Mary M. LeeINTERNATIONAL PATENTAlternative Use of
Military Propellants as Novel Blasting Agents
PCT/US96/01284



CLOSEDCorresponds to 5,608,184.Chinese
national application filed and then abandoned.U.S. Trademark"UTEC"
78/348,387
01/06/04
3,077,482
04/04/06
REGISTEREDOWNER:  UTEC Corporation,
L.L.C.8&15 Due 04/04/12Responsible Attorney:  Mary M.
Lee       US PATENT (Divisional)Continuous Explosive
Charge Assembly and Method for Loading Same in an Elongated Cavity
10/793,294
03/04/04


PENDINGOWNER:  UTEC Corporation,
L.L.C.Division of 4580-075 & 081Appeal No. 2006-1396.Appeal briefing completed;
awaiting decision by the Board.Responsible Attorney:  Mary
M. Lee  US PATENTMethod of Manufacturing A Cap
Sensitive Aqueous Gel Suspension Explosive


3,962,001
06/08/76
REGISTEREDOWNER:  UTEC (Gulf Oil
Corporation) Detagel Patent - EXPIREDUS PATENTWater Resistant Extrudable Aqueous
Gel Blasting Agent and Simplified Method of Manufacture


4,213,809
07/22/80
REGISTEREDOWNER:  UTEC (Gulf Oil
Corporation) 600 Patent - EXPIREDUS PATENTProcess for Manufacturing Gas
Entrained Aqueous Gel Explosive


3,783,053
01/01/74
REGISTEREDOWNER:  UTEC (Gulf Oil
Corporation) IR Slurry Patent - EXPIREDUS PATENTMethod of Forming in Place a
Gelled Suspension Explosive


3,676,236
07/11/72
REGISTEREDOWNER:  UTEC (Gulf Oil
Corporation) IR Slurry Patent - EXPIREDUS PATENTThickened Aqueous Ammonium Nitrate
- Hexamethylenetetramine Explosive Containing Ammonium Perchlorate as
Sensitivity Stabilizer


3,409,486
11/05/68
REGISTEREDOWNER:  UTEC (Gulf Oil
Corporation) IR Slurry Patent - EXPIREDUS PATENTCanister for Aqueous Gel Explosive
Primer


4,126,239
11/01/78
REGISTEREDOWNER:  UTEC (Gulf Oil
Corporation) Detagel Booster Bottle Patent -
EXPIRED  In addition, these patents, any
licensed technology, and the know-how that resides within the Company represent
the Companys overall technology portfolio which goes beyond the patents
directly held by the Company.  Property, plant and equipment are
composed of the Companys physical facilities at Riverton and Hallowell, Kansas,
and related equipment and storage used in its business.  The Companys
facilities are located on lands leased from a subsidiary of Energetic Systems
Inc., LLC., pursuant to a prepaid lease.  Liabilities  The Companys liabilities primarily
consist of current amounts payable or accrued to trade creditors, and amounts
owing to related parties for management fees, expenses, and shared services.  Certain of the materials the Company
uses or handles are hazardous materials.  These materials are stored in
federally and state licensed storage facilities, under permits granted to the
Company.  As of December 31, 2008, the Company was not in violation of any
of its license and permits required to carry on its business.       Liquidity and Capital Resources  As of December 31, 2008, the company
had $100 cash on hand.  During 2007 and 2008, cash flows from the legacy
business, supplemented with short-term borrowings from related parties, was used
to support the waste destruction business development program.  Following a
general business review at the end of 2008, management has determined that the
legacy business cannot support both its ongoing operations as well as the
development of the waste destruction business on its operations alone.
 Continued cash advances from internal sources are necessary to support the
overall operations and the development of the waste destruction business.
Management has concluded a new funding mechanism must be put in place in order
to develop the waste destruction business.  Until such a mechanism is put
in place development of the waste destruction business has been reduced to a
minimum to preserve cash and reduce the need for short term cash advances.  Consequently, the board of directors,
in consultation with management and major shareholders, has undertaken an
extensive investigation of the options available to the company in order to fund
its waste destruction business through commercialization.  The Board
expects to develop a plan for this no later than the second quarter of 2009.  Item 7A. Quantitative and
Qualitative Disclosures About Market Risk.  Not applicable.  Item 8. Financial Statements and
Supplementary Data.  The Financial Statements are included
at the end of the signature page.  Item 9. Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure.  None.   Item 9A(T). Controls and
Procedures.  Under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer, we evaluated the effectiveness of our disclosure controls and
procedures in ensuring that the information required to be disclosed in our
filings under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commissions rules and forms, including ensuring that such information
is accumulated and communicated to UTEC management as appropriate to allow
timely decisions regarding required disclosure. Based on such evaluation, our
principal executive and financial officers have concluded that such disclosure
controls and procedures were effective, as of December 31, 2008 (the end of the
period covered by this Annual Report on Form 10-K).  Managements Annual Report on Internal Control Over
Financial Reporting  The management of the Company is responsible for
establishing and maintaining adequate internal control over financial reporting
and for the assessment of the effectiveness of internal control over financial
reporting.  Internal control over financial reporting is defined in Rule
13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as
a process designed by, or under the supervision of, the Companys principal
executive and principal financial officers and effected by the Companys board
of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.  The Companys internal control over financial
reporting is supported by written policies and procedures that:  (1)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the Companys assets; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles and that receipts and expenditures of the Company are
being made only in accordance with authorizations of the Companys management
and directors; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the
Companys assets that could have a material effect on the financial
statements.  The Companys internal control system was designed to
provide reasonable assurance to the Companys management and board of directors
regarding the preparation and fair presentation of published financial
statements.  All internal control systems, no matter how well designed,
have inherent limitations which may not prevent or detect misstatements.
 Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation.  Projections of any      evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.  Management conducted an evaluation of the effectiveness
of the Companys internal control over financial reporting as of December 31,
2008.  In making this assessment, management used the framework set forth
in the report entitled Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission, or (COSO).
 The COSO framework summarizes each of the components of a companys
internal control system, including (i) the control environment, (ii) risk
assessment, (iii) control activities, (iv) information and communication, and
(v) monitoring.  Based on this evaluation, management concluded that the
Companys internal control over financial reporting was not effective as of
December 31, 2008, due to a lack of segregation of duties.  Management believes that this material weakness did not
have an effect on our financial results due primarily to the transparency of,
ready access to and periodic review of the bank accounts and bank statements by
Management and Directors in addition to the audit prepared by the auditor.  This annual report does not include an attestation report
of our registered public accounting firm regarding internal control over
financial reporting.  Managements report was not subject to attestation by
our registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permits us to provide only managements
report in this annual report.  Changes in Internal Control over Financial
Reporting  There was no change in our internal controls over
financial reporting that occurred during the period covered by this report, that
has materially affected, or is reasonable likely to materially affect, our
internal controls over financial reporting.  Item 9B. Other Information.  None  PART III  Item 10. Directors, Executive Officers and Corporate
Governance.  The names, ages,
and respective positions of the directors, officers, and significant employees
of the Company are set forth below.  Name
Position Held with the Company
Age
Date First Elected or AppointedFortunato Villamagna
Chief Executive Officer and Managing Director
48
January 12, 2007 to presentDavid Taylor
Co-Chairman of the Board, Secretary and Director
64
January 12, 2007 to presentKenneth Liebscher
Co-Chairman of the Board and Director
65
July 1, 2006 to presentHoward Bouch
Director
62
January 12, 2007 to presentSuresh Subramanian
President & COO
40
January 12, 2007 to presentJames Curtis Stafford
Chief Financial Officer
48
January 12, 2007 to present  Fortunato Villamagna, CEO & Managing
Director.  Dr. Fortunato Villamagna, age 48, has over 25
years of domestic and international experience in the specialty and bulk
chemicals, capital equipment, bioenergy, aerospace and energetic materials
businesses. Dr. Villamagna holds a PhD in Chemistry and MBA in Global
Management, and has worked throughout North America, Europe, Australia and West
Africa.  From 2002 to 2006 Dr. Villamagna served as Vice President -
Business Development for American Pacific Corporation (AMPAC), a publicly listed
company with divisions and subsidiaries that manufacture active pharmaceutical
ingredients and registered intermediates, energetic products used primarily in
space flight, aerospace and defense systems, clean fire- extinguishing agents
and water treatment equipment. Dr. Villamagna joined UTEC Corporation in
2006.  Prior to 2002, Dr. Villamagna was the Vice President
Technology, Americas and Europe for Orica Inc., an Australian-owned, publicly
listed global company, and global leader in mining products and services. Prior
to that Dr. Villamagna was the Director of Bulk Delivered Products for Energetic
Solutions, Inc., a part of UK based ICI Explosive Inc.       David P. Taylor, Director, Co-Chairman & Corporate
Secretary.  David Taylor, age 64, has held a number of senior
executive positions in the commercial explosives industry for over thirty-seven
years.  During this time he has, through his privately held management
companies based in Dallas, Texas and Calgary, Alberta, been both an investor and
a provider of enterprise and project management services and strategic planning
and implementation to entities engaged in the development, manufacture, sale and
distribution of commercial explosives and construction equipment.  A businessman and graduate of the now Ryerson University
in Toronto in 1964, he was the US and Canadian President and CEO of Orica Inc.
(the North American subsidiaries of Australian-based Orica, a global explosives
company), from 1998 to 2001, the President of ICI USA Inc. (the US arm of ICI
plcs former worldwide explosives business) from 1995 to 1998, and of several
other privately-held explosives and equipment distribution companies from 1970
to 1995.  In addition, he has served on the boards of publicly traded
insurance and resource companies.  Since 2002, Mr. Taylor has served as CEO
of Energetic Systems Inc., LLC., a major shareholder in  the Company, and
from January, 2006 he has served on the Companys board as a Director, and as
Co-Chairman and Corporate Secretary. Kenneth B. Liebscher,
Director & Co-Chairman.  Ken Liebscher is a 65-year-old international
businessman with 36 years of securities and executive management experience. Mr.
Liebscher is a graduate of St. George's School, Vancouver, B.C. and also
attended the University of British Columbia. In 22 years with the world's
largest dental products manufacturer, Dentsply International Inc., Mr. Liebscher
held several positions culminating as the Manager of their West Coast Division,
headquartered in San Francisco California. Mr. Liebscher was recruited by a
major Europe based competitor, Ivoclar Liechtenstein to lead their entry into
the North American market and, within two years, became Executive Vice President
of Sales and Marketing and helped expand this company's sales to $300,000,000 US
before retiring.  Mr. Liebscher became a director of a publicly held
company called E.T.C. Industries Ltd. in 1992 and became President of its wholly
owned subsidiary, THE ELECTRIC CAR COMPANY and, in 1994, led a team that
developed the MI 6 prototype electric car from the ground up. Mr. Liebscher has
served on the Board of Directors of Belmont Resources Inc., listed on the TSX
Venture Exchange (BEA.V) from 1992 to the present.  Howard Bouch, Director  Howard Bouch, age 62, is a Private Practice
Chartered Accountant with over 36 years of Public and Private international
experience. Mr. Bouch originally qualified as a Chartered Accountant (English
and Wales Institute) in 1968. Mr. Bouch joined Deloitte & Co, Lusaka, Zambia
from 1970 - 1972. Mr. Bouch joined Anglo American Corp, Zambia working as Head
Office Chief Accountant for Nchanga Consolidated Copper Mines (world's 2nd
largest) from 1972 - 1976. In 1976 Mr. Bouch returned to the UK and joined
Babcock and Wilcox, Engineers, Nottinghamshire, England as Chief Accountant for
one of their subsidiaries. Mr. Bouch was Chief Accountant of a private building
firm in Cumbria, England from 1978 - 1984.  In 1984 Mr. Howard Bouch
established a Private Practice as a Chartered Accountant and continues to
provide professional services to Cumbrian firms to the present. Mr. Bouch is a
Director of Viavid Broadcasting Inc., a fully reporting, US Public Company,
trading on the Pink Sheets under the symbol VVDB-OTC BB.  Suresh Subramanian, President  Suresh Subramanian, age 40, has over fifteen years
of experience in consumer products (detergents, paper), healthcare, energetic
materials, and commercial explosives businesses worldwide.  Prior to
joining the company he served as President from 2003 to 2006 for UTEC
Corporation, LLC, a technology company in the energetic materials and commercial
explosives industry.  From 2000 to 2003, Mr. Subramanian was the Director -
Global Product Development for Orica USA Inc, an international commercial
explosives company.  From 1998 to 2000, Mr. Subramanian was the Senior
Group Leader - Product Evaluation & Claims for Schering-Plough HealthCare
Products.  From 1994 to 1998, Mr. Subramanian was the Group Leader -
Product Development for Georgia Pacific Corporation (formerly Fort James Corp),
a global paper company.  From 1991 to 1994, Mr. Subramanian was the Senior
Engineer - Process Development for The Procter & Gamble Company, a global
consumer products company.  James Curtis Stafford, Chief Financial Officer  J. Curt Stafford, age 49, is a Certified Public
Accountant with over 15 years of experience as an accounting officer in various
industries.  Prior to joining UTEC Corporation in January of 2003, he
served as Controller for the Shawnee Division of APAC, Inc., the largest asphalt
Construction Company in the U.S. and as Controller Grace Nursing Facilities, a
privately held network of over 20 nursing homes located throughout
Oklahoma.  A former Senior Accountant with Arthur Andersen, he obtained his
CPA designation in 1991 and enjoyed 5 years of public accounting experience
specializing in Corporate Taxation.       The Officers and Directors
have not been involved in legal proceedings that impair their ability to perform
their duties as Officers and Directors.  Code of Ethics Effective April 1, 2008, our
company's Board of Directors adopted a Code of Business Conduct and Ethics that
applies to, among other persons, our company's CEO, CFO and secretary (being our
principal executive officer, principal financial officer and principal
accounting officer), as well as persons performing similar functions. As
adopted, our Code of Business Conduct and Ethics sets forth written standards
that are designed to deter wrongdoing and to promote: 1.
Honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships;2.
Full, fair, accurate,
timely, and understandable disclosure in reports and documents that we
file with, or submit to, the Securities and Exchange Commission and in
other public communications made by us;3.
Compliance with applicable
governmental laws, rules and regulations;4.
The prompt internal
reporting of violations of the Code of Business Conduct and Ethics to an
appropriate person or persons identified in the Code of Business Conduct
and Ethics; and5.
Accountability for
adherence to the Code of Business Conduct and Ethics. Our Code of Business
Conduct and Ethics requires, among other things, that all of our company's
Senior Officers commit to timely, accurate and consistent disclosure of
information; that they maintain confidential information; and that they
act with honesty and integrity.  In addition, our Code of Business
Conduct and Ethics emphasizes that all employees, and particularly Senior
Officers, have a responsibility for maintaining financial integrity within our
company, consistent with generally accepted accounting principles, and federal
and state securities laws. Any Senior Officer who becomes aware of any incidents
involving financial or accounting manipulation or other irregularities, whether
by witnessing the incident or being told of it, must report it to our company.
Any failure to report such inappropriate or irregular conduct of others is to be
treated as a severe disciplinary matter. It is against our company policy to
retaliate against any individual who reports in good faith the violation or
potential violation of our company's Code of Business Conduct and Ethics by
another. Our Code of Business Conduct and Ethics was filed with
the Securities and Exchange Commission on May 15, 2008 as an Exhibit to our
Form10. We will provide a copy of the Code of Business Conduct and Ethics to any
person without charge, upon request. Requests can be sent to: UTEC, Inc, 2420
Springer Drive, Suite 110, Norman Oklahoma 73069  Item 11. Executive Compensation.  The following charts include
compensation and options received by all Officers and Directors of the
Company.  Officers  Name and principal
position
Year
Salary ($)
Bonus ($)
Stock Awards ($)
Option Awards
Option Value
(Black-Scholes)
Option Expiration Date
Non-Equity Incentive Plan
Compensation ($)
Nonqualified Deferred
Compensation Earnings ($)
All Other Compensation
($)
TotalSuresh Subramanian,
President
2008
2007
2006
$140,000
$140,000
$140,000
0
0
250,000 @ $0.25
$54,500
3/26/13
0
0
0
$194,500
$140,000
$140,000Curt Stafford, CFO
2008
2007
2006
$100,000
$85,000
$85,000
0
0
250,000 @ $0.25
$54,500
3/26/13
0
0
0
$154,500
$85,000
$85,000       Dr. Fortunato Villamagna,
CEO
2008
2007
2006
0
0
0
250,000 @ $0.25(2)
$54,500
3/26/13
0
$40,000(1)
$40,000(1)
0
0
0
0
$94,500
$40,000(1)
0 Directors  Dr. Fortunato Villamagna
2008
2007
2006
0
0
0
250,000   @
0.25(2)
$54,500
3/26/13
0
$40,000(1)
$40,000(1)
$0
0
0
0
$94,500
$40,000(1)
0David Taylor
2008
2007
0
0
0
250,000 @ $0.25
$54,500
3/26/13
0
0
0
$54,500Kenneth Liebscher
2008
2007
0
0
0
250,000
@ $0.25
$54,500
3/26/13
0
0
0
$54,500Howard Bouch
2008
2007
0
0
0
250,000 @ $0.25
$54,500
3/26/13
0
0
0
$54,500  (1) Dr. Fortunato Villamagnas management company,
Redstone Management Services LLC., is entitled to $40,000 per year pursuant to a
management contract, but has deferred receiving this amount until a later
date. (2) Dr. Fortunato Villamagnas Company Black Stone
Management Services LLC. is entitled to an option on 250,000 common shares at
$0.25. (3) Options were awarded March 26, 2008.  Restricted
stock awarded January 12, 2007 was cancelled March of 2008 and were replaced by
the Options.  OPTIONS  The Company has adopted a formal stock
option plan attached as an exhibit to this filing.  On January 12, 2007,
the company issued shares as a stock option and subsequently after consultation
with tax professionals canceled such shares and approved the issuance of a
non-qualified option to employees, Directors and Consultants. The following
chart lists those options granted to Directors, Officers and Affiliates.  Name
Number of securities underlying
unexercised options(#)exercisable
Option exercise price($)
Option expiration dateSuresh Subramanian,
President
250,000
$0.25
1/12/2012Curt Stafford,
CFO
250,000
$0.25
1/12/2012(1)Dr.
Fortunato Villamagna,, CEO/Director
250,000
$0.25
1/12/2012David Taylor,
Secretary/Director
250,000
$0.25
1/12/2012Ken Liebscher,
Director
250,000
$0.25
1/12/2012Howard Bouch,
Director
250,000
$0.25
1/12/2012 (1) Dr. Fortunato
Villamagnas management company, Black Stone Management Services LLC. is the
holder of the option.  There are no annuity, pension or
retirement benefits proposed to be paid to officers, directors, or employees of
the corporation in the event of retirement at normal retirement date pursuant to
any presently existing plan provided or contributed to by the corporation or any
of its subsidiaries.  Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.  The owners of 5% or more of the
Shares, as well as the officers and directors who own Shares as of December 31,
2008, are set forth in the following chart:        Title of
Class
Name of
Beneficial Owner
Amount and
Nature of Beneficial Owner
Percent of
ClassPreferred
Stock
Energetic
Systems Inc., LLC(1)
20,000
47.6%Preferred
Stock
Kenneth
Liebscher, Co-Chairman
10,000
23.8%Preferred
Stock
James Curtis
Stafford, CFO
Nil
(1)
0%Preferred
Stock
Suresh
Subramanian, President & COO
Nil
(1)
0%Preferred
Stock
Howard Bouch,
Director
Nil
(1)
0%Preferred
Stock
David Taylor,
Co-Chairman, Secretary
Nil
(1)
0%Preferred
Stock
Fortunato
Villamagna, CEO, Managing Director
Nil
(1)
0%Preferred
Stock
All Officers
and Directors as a group of Preferred Stock
30,000
71.40%Common
Stock
Energetic
Systems Inc., LLC(1)
22,500,000 (1)
41.85%Common
Stock
The Excalibur
Group A.G.
20,000,000 (2)
37.2%Common
Stock
Howard Bouch,
Director
Nil
0%Common
Stock
Fortunato
Villamagna, CEO and Managing Director
Nil
(1)
0%Common
Stock
David Taylor,
Co-Chairman of the Board, Secretary
Nil
(1)
0%Common
Stock
James Curtis
Stafford, CFO
NilCommon
Stock
Suresh
Subramanian, President, COO
Nil
0%Common
Stock
Kenneth
Liebscher, Co-Chairman of the Board
Nil
0%Common
Stock
All Officers
and Directors as a group of Common Stock
22,500,000
43.45% (1)Mr. Villamagna and Mr. Taylor are members of the Board and Executive
Officers of Energetic Systems Inc., LLC., and together hold controlling equity
interests and voting power in the holding companies that own Energetic Systems
Inc., LLC., whose place of business is 2420 Springer Dr., Ste 110, Norman, OK
73069. (2)The Excalibur
Group A.G. is owned by Lionel R. Welch, 51A Dean St., Belize City, Belize
C.A.  Item 13. Certain Relationships and Related
Transactions, and Director Independence. Other than as
set forth in this Item 7, there are no relationships, transactions, or proposed
transactions to which the registrant was or is to be a party, in which any of
the named persons set forth in Item 404 of Regulation SK had or is to have a
direct or indirect material interest. As indicated
under Description of Business, the Company, on January 10, 2007, entered into a
purchase agreement with Energetic Systems Inc., LLC. to purchase 100% of the
shares of UTEC Corporation (Energetic Purchase Agreement).  Fortunato
Villamagna, Director and CEO of the Company and David P. Taylor, Director,
Co-Chairman and Secretary of the Company, are members of the Board of Executive
Officers of Energetic Systems Inc., LLC., and together hold controlling equity
interests in the holding companies that own Energetic Systems Inc., LLC.
 Under the terms of the Energetic Purchase Agreement, Energetic Systems
Inc. LLC. was paid 22,500,000 Common Shares and 20,000 Preferred Shares of the
Company.  On January 11, 2007, the Company
entered into an agreement with Redstone Management Services, a company owned by
Dr. Fortunato Villamagna, for the services of Dr. Villamagna as CEO of the
Corporation.  Payments to Red Stone under this agreement are based on time
actually spent on the business of the Company by Dr. Villamagna, subject to a
minimum annual fee of $40,000.  During the twelve months ended December 31,
2007, the Company has incurred management fee expenses of $40,000 pursuant to
this agreement, all of which is included in Accounts Payable to Related Parties,
at December 31, 2007.  From time to time the Company enters into arrangements
for the provision of services from one or more of its Directors, or companies in
which its Directors have a financial interest.       On January 11, 2007, the
Company entered into an agreement with Red Stone Management Services, a company
owned by Dr. Fortunato Villamagna, for the services of Dr. Villamagna as CEO of
the Corporation.  Payments to Redstone under this agreement are based on
time actually spent on the business of the Company by Dr. Villamagna, subject to
a minimum annual fee of $40,000.  During the twelve months ended December
31, 2007, the Company has incurred management fee expense of $40,000 pursuant to
this agreement, all of which is included in Accounts Payable to Related Parties,
at December 31, 2007.  On January 1, 2007, UTEC Corporation (a wholly owned
subsidiary effective January 10, 2007) entered into a Ground Lease Agreement for
the properties that it occupies in Cherokee County, Kansas.  This lease is
with Energetic Properties, LLC., a subsidiary of Energetic Systems, Inc. LLC., a
significant shareholder in the company.  The initial term of the lease is
seven (7) years, with provision to extend for five additional one-year renewal
periods.  The annual rent is prepaid through December 31, 2009; thereafter
UTEC Corporation is obligated to pay an annual rent of $85,800 per year subject
to adjustment for changes in the Consumer Price Index.  The discounted
value of the lease is $75,000 with an annual amortization of $10,700 with the
net book value at December 31, 2007, being $64,300.  The Agreement includes
all other terms and conditions which are normal and usual for leases of this
type.  Advances from Energetic Systems Inc., LLC  Energetic Systems, Inc., LLC. (ESI) which owns
approximately 42% of the restricted common shares of the Company, and owns 100%
of the predecessor company, UTEC Corporation, LLC. which contributed its assets
to form UTEC Corporation, is the processor of a credit facility of up to
$200,000 from UTEC.  There are no amounts owing on that facility at the end
of December 31, 2007. During the twelve months ended December 31, 2007, the
maximum amount advanced under the line of credit was $181,998.  Interest
expense paid on the line of credit was $5,790 during the twelve months ended
December 31, 2007.   Advances from ESI are secured by the accounts
receivable of the Company, and bear interest at commercial rates.  The company has chosen to adopt NASD's definition of
independent director.   Under such definition, Howard Bouch qualifies
as an independent director.  Item 14.
Principal Accounting Fees and Services. Cole
& Reed served as our independent registered public accounting firm for the
audit of our consolidated financial statements for fiscal 2008. The following
table presents the aggregate fees for professional audit and other services
rendered by the audit process to the Company and its subsidiaries for fiscal
2008 and fiscal 2007:  2008

2007Audit Fees
$45,650

$78,400Audit Related Fees
-

-Tax Fees
5,000

6,610All Other Fees
17,250

1,250Total
$69,908

$88,267  Services rendered by Cole & Reed in connection with
fees presented above were as follows:   Audit fees consist of fees for professional services
provided in connection with the audit of our consolidated financial statements,
the review of our quarterly consolidated financial statements and the audit of
the effectiveness of our internal control over financial reporting.   Tax fees for fiscal 2008 and for fiscal 2007 consist of
fees for professional services provided in connection with tax compliance, tax
advice, tax planning and tax preparation of expatriate returns.   All Other Fees. For fiscal 2008, all Other Fees related
to professional services provided in conjunction with reviewing the Form 10, the
selling of a subsidiary of the Company or issues related to consolidation and
restructuring.  POLICY ON AUDIT COMMITTEE Among its other duties, the
Audit Committee is solely responsible for the appointment, compensation and
oversight of the audit and permissible non-audit services provided by our
independent registered public accounting firm. Pursuant to the Audit Committees
charter, the Chairman of the Audit Committee has been delegated responsibility
to review and pre-approve audit and permissible non-audit services to be
provided by our independent registered public accounting firm. The Chairman of
the Audit Committee then reports such pre-approvals to the full Audit Committee
at its next regularly scheduled meeting. In accordance with this pre-approval      policy,
management communicates, on an ongoing basis, specific projects and categories
of service for which the advance approval of the Audit Committee is requested.
The Audit Committee Chairman reviews these requests and advises management
whether the engagement of the independent registered public accounting firm is
approved. On a periodic basis, management subsequently reports to the Audit
Committee regarding the actual spending for particular projects and in
connection with categories of services. Management is responsible for the
financial reporting process, including the system of internal controls, and for
the preparation of consolidated financial statements in accordance with
accounting principles generally accepted in the United States. The Companys
independent registered public accounting firm is responsible for auditing those
financial statements. The members of the Audit Committee are not professionally
engaged in the practice of accounting or auditing and their functions are not
intended to duplicate or to certify the activities of management and the
independent registered public accounting firm. Rather, the members of the Audit
Committee rely, without independent verification, on the information provided to
them and on the representations made by management and the independent
registered public accounting firm. Notwithstanding anything to
the contrary set forth in any of the Companys previous or future filings under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, that might incorporate filings made by the Company, including this
proxy statement, in whole or in part, the following Audit Committee Report shall
not be deemed to be soliciting material or to be incorporated by reference
into any prior or future filings made by the Company.  We have reviewed and discussed
with management the Companys audited consolidated financial statements as of
and for the year ended December 31, 2008.Based on the reviews and
discussions with the audit group, we have recommended to the Board that the
audited consolidated financial statements referred to above be included in the
Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2008. Audit Chairman  Ken Liebscher  PART IV  Item 15. Exhibits, Financial Statement
Schedules.  Exhibits: Exhibit No.
Document
Location3.1
Articles
of Incorporation
Previously
filed*3.2
Articles
of Amendment  Allwest
Previously
filed*3.3
Articles
of Amendment  Lyons Capital
Previously
filed*3.4
Articles
of Amendment  UTEC
Previously
filed*3.5
Articles
of Amendment  Share Increase
Attached3.6
Bylaws
Previously
filed* (As Exhibit 3.5)10.1
Stock
Option Plan
Previously
filed*14.1
Code
of Business Conduct and Ethics
Previously
filed*31.1
Rule
13a-41(a)/15d-14(a) Certificates
Included32.1
Section
1350 Certifications
Included *Previously filed on May 14, 2008 as exhibits to Form
10-12G.       SIGNATURES Pursuant to the
requirements of Section 13 or 15(d) 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.  UTEC, INC.   /s/ Fortunato
Villamagna /s/ James Curt
Stafford Fortunato Villamagna, Director
& CEO James Curt Stafford, CFO  Date April 14, 2009   Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.  /s/ Fortunato Villamagna

April 14, 2009

/s/ David Taylor

April 14, 2009Fortunato Villamagna, CEO, Director

Date

David Taylor, Secretary, Co-Chairman

Date/s/ Kenneth Liebscher

April 14, 2009

/s/ David Taylor

April 14, 2009Kenneth Liebscher, Co-Chairman

Date

Howard Bouch, Director

Date           UTEC, INC.  Comparative Financial Statements and accompanying Notes  As of December 31, 2008 and 2007      Table
of Contents  Financial
Statements  Consolidated
Balance Sheets F-1 Consolidated
Statements of Operations F-2 Consolidated
Statements of Stockholders' Equity F-3 Consolidated
Statements of Cash Flows F-4  Notes
to Consolidated Financial Statements  Organization
and Summary of Significant Accounting Policies 1 Acquisitions 4 Property,
Plant and Equipment 5 Operating
Leases 6 Related
Party Transactions 6 Intangible
Assets 7 Earnings
(Loss) Per Share 8 Income
Taxes 8 Contractual
Obligations 9 Employee
Stock Plan 10 New
Accounting Pronouncements 14


Report of Independent Registered Public Accounting Firm  Board of Directors and Stockholders UTeC, Inc. Norman, Oklahoma  We have audited the accompanying consolidated balance sheets of
UTeC, Inc. (the Company) as of December 31, 2008 and 2007, and the related
consolidated statements of operations, stockholders equity, and cash flows for
the years then ended.  These financial statements are the responsibility of
the Companys management.  Our responsibility is to express an opinion on
these financial statements based on our audits.  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.  In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of UTeC,
Inc. as of December 31, 2008 and 2007, and the results of its operations and its
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.  We were not engaged to examine management's assessment of the
effectiveness of UTeC Inc.'s internal control over financial reporting as of
December 31, 2008, included in the accompanying Managements Annual Report on
Internal Control over Financial Reporting and, accordingly, we do not express an
opinion thereon.  /s/ Cole & Reed, P.C.  Oklahoma City, Oklahoma March 31, 2009





UTEC
Inc.Consolidated Balance
SheetsAs of December 31, 2008 and
2007December 31
    2008

December 31
    2007ASSETSCurrent
AssetsCash
and cash equivalents
$
          100

$      89,377Accounts
receivables
187,278

52,415Inventory
107,916

59,440Prepaid
expenses
28,146

6,115Deferred
Tax Asset (Note 8)
-

14,300Total
Current Assets
323,440

221,647Prepaid
Ground Lease (Note 4)
53,300

64,300Intangible
Assets, net (Note 6)
1,057,109

1,127,250Property,
plant & equipment, net (Note 3)
823,169

694,455Deferred
Tax Asset (Note 8)
170,800

105,600Total
assets
$ 2,427,818

$ 2,213,252LIABILITIESCurrent
liabilitiesAccounts
payable and accrued liabilities
$   427,198

$   247,308Amounts
payable to related parties
323,297

115,062Total
Current Liabilities
750,495

362,370STOCKHOLDERS'
EQUITYAuthorized:74,000,000
common shares, par value of $0.001 per shareIssued
and outstanding:51,968,159
at December 31, 2008
51,96853,756,159
at December 31, 2007


53,7561,000,000
preferred shares, par value of $0.001 per shareIssued
and outstanding:42,013
at December 31, 2008
4242,013
at December 31, 2007


42Additional
paid in capital
2,149,515

2,116,376Retained
earnings (deficit)
(524,202)

(319,292)Total Stockholders' Equity
1,677,323

1,850,882Total
liabilities and stockholders' equity
$ 2,427,818

$ 2,213,252The
accompanying notes are an integral part of these financial
statements.  F-1





UTEC
Inc.Comparative Consolidated
Statements of OperationsYear ending
December 312008

2007RevenueRevenue
$ 2,237,601

$
 1,365,805Operating ExpensesCost of Sales
563,781

197,920General and administrative
expense
882,167

427,546Selling expense
271,219

157,330Research and development
expense
776,244

988,250Total operating expenses
2,493,411

1,573,127Income (loss) before income
taxes
(255,810)

(405,242)Provision for income taxes
(benefit)
(50,900)

(119,900)Net loss
$
 (204,910)

$
 (285,341)Earnings (loss) per share -
basic and diluted
$
    (0.004)

$
    (0.005)Weighted average number of
common sharesoutstanding as of December
31
52,396,373

52,839,093The
accompanying notes are an integral part of these financial
statements.               F-2





UTEC Inc.Comparative
Consolidated Statements of Stockholders' Equityfor
the year Ended December 312007Common shares
Preferred Shares
Par value
Additional Paid-in Capital
Retained Earnings (Deficit)Balance January 1
25,917,159
22,013
$25,939
$
$(33,951)Common
shares issued for purchase of ESI at $0.001
22,500,000

22,500
1,879,439Common
shares issued for finders fee at $0.001
2,525,000

2,525Preferred
shares issued for purchase of ESI at $0.001

20,000
20Common
shares issued pursuant to employee stock grants
1,914,000

1,914
105,487Common
shares issued for contractual and consulting services
900,000

900
93,200Capital
contribution by shareholder for consulting services



38,250Net
Loss for the year ended December 31

-
-
(285,341)Balance,
December 31
53,756,159
42,013
$53,798
$2,116,376
$(319,292)2008Common shares
Preferred Shares
Par value
Additional Paid-in Capital
Retained Earnings (Deficit)Balance January 1
53,756,159
42,013
$53,798
$2,116,376
$(319,292)Cancel
shares issued pursuant to employee stock grants
(1,898,000)

(1,898)
(105,469)Sale
of outstanding non-restricted stock
110,000

110
41,858Options
issued pursuant to employee option plan



96,750Net
Loss for the year ended December 31




(204,910)Balance,
December 31
51,968,159
42,013
$52,010
$2,149,515
$(524,202)The
accompanying notes are an integral part of these financial
statements.           F-3





UTEC Inc.Consolidated Statements of
Cash Flowsfor the year ended December
312008

2007Cash flows from operating
activities:Net loss

$
   (204,910)

$
     (285,341)Adjustments to reconcile loss
to net cashprovided by (used by) operating
activities:Depreciation

44,067

42,730Amortization
of intangibles

81,141

80,050Employee
stock grants

-

107,401Cancellation
of employee stock grants
(107,401)Issuance of
employee options

96,750Stock issued
for services and contract rights
-

60,750Deferred tax
benefit

(50,900)

(119,900)Accounts
receivables

(134,863)

(9,927)Inventories

(48,476)

(59,440)Prepaid
Expenses

(22,031)

(6,115)Accounts
payable and accrued liabilities
207,127

244,069Total cash flows from operating
activities
(139,496)

54,277Cash flows from investing
activitiesAsset
construction in progress

(148,162)Purchased
assets

(24,619)Cash in UTEC
Corporation when contributed to UTEC Inc.
-

15,000Total cash flow from investing
activities
(172,781)

15,000Cash flows from financing
activitiesProceeds from line-of-credit
from related party
181,000

181,998Repayment on line-of-credit to
related party
-

(181,998)Proceeds of issuance of common
stock
42,000

-Total cash flows from financing
activities
223,000

-Increase (decrease) in cash and
equivalents
(89,277)

69,277Cash and cash equivalents,
beginning of period
$
      89,377

$
        20,100Cash and cash equivalents, end
of period
$
           100

$
        89,377Supplemental DisclosureIncome taxes paid

$
                 -

$
                  -Interest paid

$
         5,914

$
             558Supplemental Schedule of
Noncash Investing and Financing Activities:Assets acquired and liabilities
assumed in the acquisition:Accounts
receivable

$
                -

$
        42,488Property and
equipment

$
                -

$
      737,185Intangible
assets

$
                -

$
   1,200,000Accounts
payable and accrued liabilities
$
                -

$
      (90,189)Capital contribution by
shareholder for consulting services
$
                -

$
        38,250Common stock issued in exchange
for patent rights
$
                -

$
        71,600The accompanying notes are an
integral part of these financial statements.  F-4





UTEC, INC. Notes to Consolidated Financial Statements December 31, 2008 and 2007  1. Organization
and Summary of Significant Accounting Policies  a) Business activity  UTEC INC., formerly Lyon Capital Venture Corp., is a Nevada
corporation organized on November 8, 1993 as a For Profit corporation for the
purpose of engaging in any lawful activity.  The Company was in the
development stage through December 31, 2006, and the year ended December 31,
2007 is the first year during which the Company is considered an operating
company and is no longer in the development stage.  On January 10, 2007 the
Company purchased 100% of the shares of UTEC Corporation, Inc for a total
consideration of 22,500,000 of the companys par value $0.001 common shares and
20,000 of the companys par value $0.001 preferred shares.  The Company
also issued 2,525,000 common shares in finders fees.  The Companys business is to offer state of the art testing and analysis to clients
worldwide.  The Company is a leader in commercial explosives technology
including development, analysis, testing and manufacturing.  In 2007 the
company began to develop new technology in the area of commercial hazardous
waste destruction.  The development of this technology continued through
2008 and is an integral part UTECs growth plans for the future.  The
Company expects to continue development and commercialize the product in
2009.  The Company operates a chemical research and development
laboratory near Riverton, Kansas, which specializes in commercial explosives
development and analysis. The Company also operates a destructive test facility
near Hallowell, Kansas, which specializes in determining the detonating
characteristics of commercial explosives.  b) Principles of Consolidation  The financial statements of the Company include the accounts of
the Company and its wholly owned subsidiary, UTEC Corporation.  All
intercompany accounts and transactions have been eliminated in
consolidation.   c) Cash and Cash Equivalents  For the purpose of the statements of cash flows, the Company
considers all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.  The Company had a cash deficit of
$10,004 at December 31, 2008 and $89,377cash or cash equivalents at December 31, 2007.  d) Trade Accounts Receivable and Credit Policy  Trade accounts receivable consist of amounts billed to customers
for purchases of services and energetic materials. The Company extends credit to
customers in accordance with normal industry standards and terms, which are
typically net 30 to 45 days.  Credit risk arises as customers default on
trade accounts receivable owed to the Company. The Company considers accounts
receivable to be





fully collectible; accordingly, no allowance for doubtful accounts
is recorded. If amounts are subsequently determined to be uncollectible, they
will be charged to operations when that determination is made.  e) Revenue Recognition  The Company recognizes revenue when materials are shipped or
services are provided, and the customer takes ownership and assumes risk of
loss, collection of the relevant receivable is probable, and the sales price is
fixed or determinable.  The Company records customer shipping and handling
charges as revenues with the associated costs recorded to cost of sales.  f) Inventories  Inventories consist of purchased materials held for resale and are
carried at the lower of cost (first-in, first-out method) or market.  g) Property, Plant and Equipment  Property, plant and equipment are carried at fair value for assets
contributed in connection with the acquisition, and at cost for assets acquired
subsequent to the acquisition date, less accumulated depreciation from the date
of acquisition through the balance sheet date. The Company periodically assesses
the recoverability of property, plant and equipment and evaluates such assets
for impairment whenever events or changes in circumstances indicate that the net
carrying amount of an asset may not be recoverable. Asset impairment is
determined to exist if estimated future cash flows, undiscounted and without
interest charges, are less than the net carrying amount. Depreciation expense is
computed on a straight-line basis over the estimate useful lives of the assets
as follows:  Building and leasehold improvements 10-25 years Machinery and equipment 10-15 years Furniture and fixtures & transportation equipment 3-7 years  Major additions and improvements are capitalized in the month
following the month in which the assets or improvement are deemed to be placed
in service. Maintenance and repairs are expensed as incurred. Upon disposition,
the net book value is eliminated from the accounts, with the resultant gain or
loss reflected in operations.  h) Research and Development Costs  Research and development costs for the development of new products
and update of existing products are expensed as incurred.  i) Income Taxes  The Company recognizes the tax effects of transactions in the year
in which such transactions enter into the determination of net income,
regardless of when reported for tax purposes.  Deferred taxes are provided
in the financial statements under Financial Accounting Standards Board Statement
No. 109 to give effect to the resulting temporary differences which may arise
from differences in the bases of fixed assets, depreciation methods, allowances,
share-based compensation, and start-up costs based on the income taxes expected
to be payable in future years.





In assessing the realizability of the net deferred tax assets,
management considers whether it is more likely than not that some or all of the
deferred tax assets will not be realized.  The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences are expected to become
deductible.  In making this assessment the company may, using all available
evidence, arrive at the conclusion that some or all of the benefit will not be
realized.  In this case an allowance equal to the estimate of the
unrealized amount is recorded.  See Note 8 for this discussion.  j)
Concentrations  The Company maintains balances in bank accounts that, at times,
exceed federally insured limits. Management believes the risk of loss associated
with this concentration is minimal.  For the twelve months ended December 31, 2008, two customers
accounted for approximately 44% and 17% of the Companys net sales,
respectively.  For
the twelve months ended December 31, 2007, two customers accounted for
approximately 34%
and 28% of the Companys net sales, respectively.  At December 31, 2008 and 2007, one customer accounted for
approximately 26% and 80% respectively of the Companys accounts receivable.  k)
Estimates  Preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and reported amounts of revenues and
expenses during the reporting period.  Actual amounts may differ from those
reported.  Certain significant estimates include the fair value of the
Companys intangible assets and the related amortization period.  These
estimates are discussed in further detail at Note 6.  l)
Going Concern Assumption  The Companys group of activities consists solely of UTEC
Corporation.  Within UTEC Corporation there exists both a legacy business
and a developing waste destruction business. All of the revenue in 2007 and 2008
is attributable to the legacy business, which consists of testing services,
materials sales and manufacturing.  During 2007 and 2008, cash flows from
the legacy business, supplemented with short-term borrowings from related
parties, was used to support the waste destruction business development program.
 Following a general business review at the end of 2008, management has
determined that the legacy business cannot support both its ongoing operations
as well as the development of the waste destruction business on its operations
alone.  Continued cash advances from internal sources are necessary to
support the overall operations and the development of the waste destruction
business. Management has concluded a new funding mechanism must be put in place
in order to develop the waste destruction business.  Until such a mechanism
is put in place development of the waste destruction business has been reduced
to a minimum to preserve cash and reduce the need for short term cash
advances. Consequently, the board of directors, in consultation with
management and major shareholders, has undertaken an extensive investigation of
the options available to the company in order to fund its





waste destruction business through commercialization.  The
Board expects to develop a plan for this no later than the second quarter of
2009.  m) Intangible Assets Acquired  Intangible assets are accounted for in accordance with Statement
of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets.  Intangible assets acquired consist of a customer list and patent
rights.  These intangible assets are amortized over their useful lives and
tested for impairment if certain circumstances indicate and impairment may
exist.  As of December 2008 the remaining amortization period is fifteen
years for the customer list and patent rights.  Intangible assets that are amortized are tested for impairment at
the asset level associated with the lowest level of cash flows.  An
impairment exists if the carrying value of the asset is i) not recoverable (the
carrying value of the asset is greater than the sum of the undiscounted cash
flows) and ii) is greater than its fair value.  As of December 31, 2008 the Company has determined that no
impairment of the intangibles is indicated.  n) Advertising Costs  Advertising costs are expensed as incurred and for the
twelve-month period ending December 31, 2008 and 2007 totaled approximately
$63,711 and $66,636 respectively.  These costs consist primarily of trade
show, web site and publication expenses.  2. Acquisitions  a) Acquisitions  On
January 10, 2007 the company UTEC, Inc. (formerly Lyon Capital Venture Corp),
acquired UTEC Corporation, a global chemical and materials services company.
 The Company is a leader in commercial explosives technology including
development, analysis, testing and manufacturing.    b) Purchase
Price and Value Assigned  The
consideration for the UTEC Corporation acquisition consisted of 22,500,000
shares of restricted stock and 20,000 preferred shares.  The preferred
shares were assigned a nominal value of $0.001 per share.  The common
shares were valued at $0.08375 per share arrived at by dividing the net assets
acquired (see Note 2 (c)) by the number of restricted stock issued in the
exchange.  c) Allocation
of Purchase Price  The
UTEC Corporation acquisition is accounted for as a purchase business
combination.  Assets acquired and liabilities assumed are recorded in the
accompanying consolidated balance sheet at their estimate fair values as of
January 10, 2007.  A final allocation of purchase price to the assets
acquired and liabilities assumed at the date of acquisition is presented in the
table below.  Current
assets
$     57,488Property,
plant and equipment
737,185





Identifiable
intangible and other assets
1,200,000Total
assets acquired
1,994,673Current
liabilities
90,189Net
assets acquired
$1,904,484Cash
acquired
15,000Purchase
price, net of cash acquired
$1,889,484  3. Property,
Plant and Equipment  Property, plant and equipment consist of the following at December
31:  2008

2007Buildings and leasehold improvements
$ 501,500

$ 501,500Machinery and equipment
219,645

195,026Transportation equipment
24,538

24,538Furniture and fixtures
16,121

16,121Constructed asset in progress
148,162

0909,966

737,185Less accumulated depreciation
86,797

42,730$ 823,169

$ 694,455  Depreciation expense was approximately $44,100 and $42,700 for
year ended December 31, 2008 and 2007, respectively.  4. Operating
Leases  The Company assumed a non-cancelable operating lease for a vehicle
originally dated August 23, 2005. The lease requires monthly payments of $562
and expires August 23, 2008.  The lease was renewed in February of 2009 for
thirty-six (36) months with lease payments due monthly of $329.  Future
rental payments are as follows:  2009 $3,618 2010  $3,946 2011 $3,946 2012 $329 2013 None  The total rent expense for the years ending December 31, 2008 and
2007 was approximately $4,496 and $6,771 respectively.  Future ground lease payments (see Note 5), subject to adjustment
for inflation, are as follows:  2009 None 2010 $85,800 2011 $85,800 2012 $85,800





2013 $85,800  5. Related
Party Transactions  a) Shared Services  The accounting office of the Company and its subsidiary UTEC
Corporation reside in Norman, Oklahoma and also serve as the accounting office
and headquarters for Energetic Systems, Inc. LLC. (ESI).  For the
three-month period ended December 31, 2008 and 2007, ESI charged the Company
$10,230 and $13,179 respectively for such services.  For the twelve months
ended December 31, 2008 and 2007 ESI charged the Company $48,366 and $65,020
respectively, all of which is payable within thirty days of the invoice date.  b) Other related party transactions  From time to time the Company enters into arrangements for the
provision of services from one or more of its Directors, or companies in which
its Directors have a financial interest.  On January 11, 2007, the Company entered into an agreement with
Red Stone Management Services, a company owned by Dr. Fortunato Villamagna, for
the services of Dr. Villamagna as CEO of the Corporation.  Payments to Red
Stone under this agreement are based on time actually spent on the business of
the Company by Dr. Villamagna, subject to a minimum annual fee of $40,000.
 During the twelve months ended December 31, 2008 and 2007, the Company has
incurred management fee expense of $40,000 pursuant to this agreement, all of
which is included in Accounts Payable to Related Parties, at December 31, 2008
and 2007 respectively.  The agreement was revised as of September 30, 2008
to take effect January 1, 2009 and the wages paid to Mr. Villamagna were changed
to $200,000 per year with a bonus of no greater than 50% of wages payable
contingent upon the performance of the company and Board acceptance.  On January 1, 2007 UTEC Corporation (a wholly owned subsidiary
effective January 10, 2007) entered into a Ground Lease Agreement for the
properties that it occupies in Cherokee County, Kansas.  This lease is with
Energetic Properties, LLC., a subsidiary of Energetic Systems, Inc. LLC., a
significant shareholder in the company.  The initial term of the lease is
seven (7) years, with provision to extend for five additional one-year renewal
periods.  The annual rent is prepaid through December 31, 2009; thereafter
UTEC Corporation is obligated to pay an annual rent of $85,800 per year subject
to adjustment for changes in the Consumer Price Index.  The discounted
value of the lease is $75,000 with an annual amortization of $10,700 with the
net book value at December 31, 2008 and 2007 being $53,300 and $64,300.
 The Agreement includes all other terms and conditions which are normal and
usual for leases of this type.  c) Advances from Energetic Systems Inc., LLC  Energetic Systems, Inc., LLC. (ESI) which owns approximately 42%
of the restricted common shares of UTEC, INC. and owns 100% of the predecessor
company, UTEC Corporation, LLC that contributed its assets to form UTEC
Corporation, is the processor of a credit facility of up to $200,000 from UTEC.
 The amounts owing on that facility at the end of December 31, 2008 and
2007 are $181,000 and $0 respectively.  Interest expense accrued on the
line of credit was $12,932 and $558 during the years ended December 31, 2008 and
2007, respectively.





6. Intangible
Assets  Intangible assets consist of the following at December 31, 2008
and December 31, 2007:  2008

2007Patent rights
$ 71,600

$       71,600Customer relationships
1,125,000

1,125,000Accumulated amortization
(139,491)

(69,350)$
1,057,109

$  1,127,250  The Patent rights are based upon the contractual agreement
between the Company and Ceramatec, as described in Note 9.  The Company is
amortizing these Patent rights over 17 years.  Customer relationships represent the net present value of the
discounted cash flows of customer relationships contributed by the Company in
connection with the acquisition.  Although the Company does not typically
have long-term contracts with these customers, most of them have been customers
of the Company for many years.  The Company is amortizing the net present
value of the estimated future cash flows of these customers over seventeen (17)
years, which is based on the consistency, length and the unique nature of the
customer relationships and the service that the Company provides.  Amortization expense for the next five years related to intangible
assets is expected to be as follows:  2009 $70,400 2010 70,400 2011 70,400 2012 70,400 2013 70,400  7. Earnings
(Loss) Per Share  Basic earnings (loss) per share (EPS) excludes dilution and is
calculated by dividing net income (loss) available to common stockholders by the
weighted-average number of shares of common stock outstanding during the period.
 Diluted EPS is computed in a manner similar to that of basic EPS except
that the weighted-average number of common shares is increased to include the
number of incremental common shares (computed using the Treasury Stock method)
that would have been outstanding if all potentially dilutive common shares (such
as stock options) were issued during the period.  Diluted EPS is the same
as basic EPS if the effect of the incremental shares is anti-dilutive.  For the twelve months ended December 31, 2008 and 2007, basic and
diluted earnings (loss) per share were the same, as all potentially dilutive
shares were anti-dilutive.  8. Income Taxes  The provision for income taxes consists of the following for the
year ended December 31:  2008

2007Current
$
           0

$
           0





Deferred (benefit)
(170,800)

(119,900)Total
$(170,800)

$(119.900)   The Deferred tax asset consists of the following at December
31:  2008

2007Accrued liabilities not currently deductible
$  (16,600)

$   (16,600)Deferred stock compensation
(36,800)

(40,800)Deductible prepaid insurance
6,200

2,300Net operating loss carryforwards
(134,000)

(64,800)Valuation Allowance
10,400

0Net Deferred Tax Asset
$ (170,800)

$ (119,900)  The Company has provided a valuation allowance for the portion of
the deferred tax benefit that it does not expect to realize.  The Company is not currently subject to any specific audit by any
federal, state or local taxing authority.  There are no unrecognized tax
benefits or tax positions previously taken which could give rise to uncertainty,
and therefore there are no calculations or classifications of interest,
penalties, or effects on income taxes related to such uncertainties.  At December 31, 2008, the Company has net operating loss
carryforwards totaling approximately $353,000, which primarily begins to expire
in 2022.  Actual income taxes differ from expected income tax, computed by
applying the U.S. Federal corporate income tax rate of 34% to earnings (loss)
from operations before income taxes for the year ended December 31 as
follows:  2008

2007Computed expected income taxes
$(87,000)

(34.0)%

$(137,800)

(34.0)%Nondeductible expenses
32,100

12.6

42,000

10.4Other, principally state taxes
(6,400)

(2.5)

(11,200)

(2.8)Valuation Allowance
10,400

(4.1)

0Provision (reversal) for valuation allowance
0

(0.0)

(12,900)

(3.2)$(50,900)

(19.9)%

$(119,900)

29.6%  9. Contractual
Obligations  a) Ceramatec, Inc.  Effective February 1, 2007 the company entered into a License and
Supply Agreement with Ceramatec, Inc. of Salt Lake City, Utah (License) for a
world wide exclusive royalty-free license to practice Cermatecs Gild Arc Plasma
Oxidizer technology for the destruction of solid and liquid hazardous chemicals
and biologicals.  The agreement continues to the full end of the term or
terms for which patent rights held by Ceramatec and related to the technology
have not expired.





In connection with the agreement, the Company granted 850,000
shares of its Common Stock to Ceramatec.  Subject to any Securities and
Exchange Commission regulations, Ceramatec may sell its stock starting two years
from the Effective Date of the agreement. The Ceramatec agreement provided for
(i) a license to the technology, (ii) support with the technology and (iii) a
supply agreement with Ceramatec in exchange for the shares provided.  The shares to Ceramatec were provided for item (i), the license.
The support and supply agreement (i & ii) were included in the supply
agreement and payments made to Ceramatec to purchase the equipment and units
specified in the agreement.  The restricted stock given in exchange for the exclusive licensing
agreement with Ceramatec was valued at $0.0842 per share.  This value was
adopted from the calculation of the value of the restricted shares given in
exchange for the acquired company, UTEC Corporation.  See note 2 (b) of the
Financial Statements.  The agreement with Ceramatec is dated February 1,
2007 within three weeks of the day UTEC Corporation was acquired.  Although
the market price at the close of business on February 1, 2007 was $0.52 per
share a true trading market for the stock had not been established during that
brief period and Management believed a more accurate fair value was represented
by the value established in the acquisition of UTEC Corporation.  The
Company has accounted for its share-based payments in accordance with SFAS
123(R), Share Based Payments, and EITF Issue 96-18, Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services.  If Ceramatec is not able to sell its stock granted under this
agreement for at least $700,000 within the first two years after it is allowed
to sell its stock under this agreement, then any license granted under this
agreement shall become non-exclusive.  Ceramatec agreed to pay finders fees
of 85,000 shares to a third party in connection with this agreement.  The Company is amortizing the asset over seventeen (17) years,
which is the estimated remaining life of the patents to which the Company has
exclusivity rights.  See Note 6.  During the term of the License, the company is obligated to
purchase plasma oxidizer units from Ceramatec in order to maintain exclusivity
under the license agreement. The companys minimum obligations under this
purchase arrangement are $100,000 in 2008, $200,000 in 2009 and $600,000 for
each remaining year of the agreement. If the minimum purchase requirement is not
met for any year, the license grant of this agreement shall automatically
convert from exclusive to nonexclusive for the remainder of the term of the
agreement.  The License includes a provision that entitles the Company to any
improvements to the technology, whether patentable or not, without further cost
to the Company.  b) Princeton Research  Effective September 17, 2007 the company entered into an agreement
with Princeton Research for corporate services.  In exchange for these
services the company issued 50,000 common shares to Princeton.  The shares
were valued at $0.45 per share equal to the market value of the stock on the
agreement signing date.  The services were rendered in 2007 and the
amortization of $22,500 was fully expensed before by year-end.





c) BioEnergy Applied Technologies, LLC  On April 4, 2008, the Company entered into a joint technical
development and marketing agreement (Marketing Agreement) with BioEnergy
Technologies, LLC (BAT), a corporation jointly owned by two directors of the
company.  Pursuant to the term of the Marketing Agreement, the Company and
BAT have agreed to undertake a joint technical development and marketing program
to develop and sell certain patented technology held by BAT and to pursue
certain business opportunities.  The parties will share equally in the net
profits before taxes in connection with the license or sale of the patented
technology pursuant to the Marketing Agreement.  As additional consideration, for each year in which the grant of
the Subject Matter under the Marketing Agreement is exclusive to the Company,
the Company will issue 200,000 options to purchase 200,000 shares of its common
stock to BAT or its nominee.  Options will be issued at the end of each
year of exclusivity, beginning April 1, 2009.  The options granted
hereunder will be for a period of ten (10) total years, exercisable at a price
of $0.28 per share.  10. Employee
Stock Plan  2007
Employee Stock Plan  Effective
January 12, 2007, the Companys Board of Directors approved a Consultant and
Employee Stock Option and Award Plan and reserved 2,000,000 shares of the
Companys common stock pursuant to this plan.  In connection with the
adoption of the plan, the Company also awarded 1,914,000 shares of restricted
stock to certain key employees and consultants.  The stock grants to the
key employees have an eighteen-month vesting period from the date of the grant,
and become fully vested on July 12, 2008.  Upon
vesting the stock will become the property of the employee free of restriction
and can be sold, gifted or otherwise transferred.  The right to the stock
never lapses nor is it dependent on the exercise of the stock.  The stock
carries a strike price value of $0.25 per share.  The stock would not be
sold unless its market value exceeds the strike price.  Since the employee
is not required to exercise the strike price the employees basis in the stock is
zero and therefore cannot be written off or a loss taken.  A
summary of the status of the Companys non-vested shares as of December 31,
2007, and changes during the year ended December 31, 2007, is presented
below:  Non-vested Shares
Shares (000)
Weighted-AverageGrant-DateFair
ValueNon-vested
at January 1, 2007
0
$0.00Granted
1,914
0.218Vested
0
0.00Forfeited
0
0.00Non-vested
at December 31, 2007
1,914





$0.218  For
the twelve months ended December 31, 2007, the Company recognized compensation
expense of $107,401 and a corresponding increase to Common Stock and Additional
Paid-in Capital based upon the estimated fair value of the Common Stock at the
date of the grant and the vesting period of the grants.  Employee
Stock Option Plan  Effective
March 26, 2008 the restricted shares issued pursuant to the Employee Stock
Ownership Plan dated January 11, 2007 were cancelled in their entirety, save for
16,000 that were lost by the employee and which will be cancelled in 2009.
 The Plan has since been rescinded and the amount amortized in 2007 of
$107,401 has been reversed in the first quarter of 2008.  In
its place each employee signed an Employee Stock Option Plan dated March 26,
2008. The plan contains no provision for vesting and each employee may exercise
their rights to purchase shares at the strike price of $0.25 on the plan date.
 The unexercised options terminate at the end of five years or upon the
employee being terminated from the Company whichever is earlier.  The
fair value of each option award is estimated on the date of grant using a
Black-Scholes valuation model that uses the assumptions noted in the following
table.  Expected volatilities are based on implied volatilities from traded
options on the Companys stock in addition to other publicly traded companies
stock within the market segment of industrial waste management. This is due
primarily to the fact that The Company does not have enough history to properly
ascertain the volatility rate.  The expected term of options granted is
also estimated since the company does not have a history of granting stock
rights and represents the period of time that options granted are expected to be
outstanding. The risk-free rate for periods within the contractual life of the
option is based on the Libor rate in effect at the time of grant.   FYE
2007Expected
volatility
71.44%Expected
dividends
0.00Expected
term (in years)
3.5Risk-free
rate
2.67%  These
values used in the Black-Scholes model yield a total compensation cost to be
amortized over the expected life of 3.5 years to be $451,500 or $129,000 per
year of which $96,750 was amortized for the year ended December 31, 2008.
 The unrecognized amortizable compensation cost is $354,750 for these
options as of December 31, 2008.





A
summary of the status of The Companys non-vested stock options as of December
31, 2008 is presented below:  Non-vested
Options
Options
(000)
Weighted-AverageGrant-DateFair
ValueNon-vested
at January 1, 2008
0
$0.00Granted
1,914
0.236Vested
1,914
0.236Forfeited
0
0.00Non-vested
at December 31, 2008
0
$0.00   11. Quarterly
Results of Operations  Quarterly Period
EndedMarch 31
June 30
September 30
December 31Fiscal Year 2008Net sales
$
 768,168
$
  298,898
$
  821,361
$
  349,174Net income (loss)
63,279
(159,176)
11,429
(120,442)Net income (loss) per share
-basic
and diluted
$
   0.0012
$
 (0.0031)
$
    0.0002
$
 (0.0023)2008 Shares o/s
53,685,719
51,968,159
51,968,159
51,968,159Fiscal Year 2007Net sales
$
 222,988
$
  630,954
$
  292,629
$
  219,234Net income (loss)
(97,032)
63,496
(152,037)
(99,768)Net income (loss) per share
-basic
and diluted
$
(0.0019)
$
   0.0012
$
 (0.0028)
$
 (0.0019)2007 Shares o/s
50,420,159
53,706,159
53,707,759
53,756,159  12. New
Accounting Pronouncements  In
September of 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which defines fair value, establishes guidelines for measuring fair value and
expands disclosures regarding fair value measurements. SFAS No. 157 is effective
for fiscal years beginning after November 15, 2007.  The adoption of this
statement did not have an effect on the Companys consolidated financial
statements.  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities, which provides companies an option
to report selected financial assets and





liabilities
at fair value.  SFAS No. 159 does not require any new fair value
measurements. However, if applied, SFAS No. 159 requires companies to provide
information helping financial statement users to understand the effect of a
companys choice to use fair value in determining its earnings, as well as to
display the fair value of the assets and liabilities a company has chosen to use
fair value for on the face of its balance sheet. Additionally, SFAS No. 159
establishes presentation and disclosure requirements designed to simplify
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. The statement is effective as of the
beginning of an entity's first fiscal year beginning after November 15, 2007.
 The Company has determined the effects of the adoption of this statement
will not have an effect on its consolidated financial statements, because the
Company has elected not to report any liabilities or assets at any value other
than that achieved by historical cost, and that if the Company were to make such
an election, the difference in values reported on the Companys consolidated
financial statements would not provide more relevant and understandable
information for the users of the Companys consolidated financial statements.  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations. This
Statement improves the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial reports about a business combination and its effects by establishing
principles and requirements for how the acquirer (i) recognizes and measures in
its financial statements the identifiable assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree, (ii) recognizes and
measures the goodwill acquired in the business combination or a gain from a
bargain purchase, and (iii) determines what information to disclose to enable
users of the financial statements to evaluate the nature and financial effects
of the business combination. The Company must apply prospectively SFAS No.
141(R) to business combinations for which the acquisition date is on or after
the beginning of 2009. The impact that adoption of SFAS No. 141(R) will have on
the Companys financial condition, results of operations and cash flows is
dependent upon many factors. Such factors would include, among others, the fair
values of the assets acquired and the liabilities assumed in any applicable
business combination, the amount of any costs the Company would incur to effect
any applicable business combination, and the amount of any restructuring costs
the Company expected but was not obligated to incur as the result of any
applicable business combination. Thus, we cannot accurately predict the effect
SFAS No. 141(R) will have on acquisitions until such acquisitions are
consummated.  In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements  an amendment of ARB No. 51, which
establishes accounting and reporting standards for ownership interests in
subsidiaries held by parties other than the parent, the amount of consolidated
net income attributable to the parent and to the noncontrolling interest,
changes in a parents ownership interest and the valuation of retained
non-controlling equity investments when a subsidiary is deconsolidated. The
statement also establishes reporting requirements that provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the non-controlling owners. SFAS No. 160 is
effective for fiscal years beginning after December 15, 2008. The adoption of
SFAS No. 160 will not have a material effect on the Companys consolidated
financial statements unless the Company acquires less than 100 percent of an
entity.  Accordingly, the effect of application of SFAS No. 160 on future
acquisitions will vary depending on the nature of the acquisition.  In
March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, which amends and expands the disclosure
requirements of SFAS No. 133.  SFAS No. 161 requires enhanced disclosures
about an entitys derivative and hedging activities.  The statement
encourages, but does not require, comparative disclosures for earlier periods at
initial adoption.  SFAS No. 161 is effective for financial statements
issued for fiscal years and interim





periods
beginning after November 15, 2008, with early application encouraged.  The
Company has determined that the adoption of SFAS No. 161 will not have a
material effect on the consolidated financial statements due to the absence of
derivatives and hedging instruments in the Companys consolidated financial
statements. If the Company engages in activities which include derivatives and
hedging instruments, then the adoption of SFAS No. 161 could have an effect on t
its consolidated financial statements, and such effect could be material.  In
April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful
Life of Intangible Assets (FSP 142-3). This FSP 142-3 amends the factors that
should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under FASB Statement
No. 142, Goodwill and Other Intangible Assets (SFAS 142). The
intent of FSP 142-3 is to improve the consistency between the useful life of a
recognized intangible asset under SFAS 142 and the period of expected cash
flows used to measure the fair value of the asset under SFAS 141R, and
other U.S. generally accepted accounting principles. FSP 142-3 is effective for
our interim and annual financial statements beginning in 2009. The adoption of
FSP 142-3 will not have a material effect on the Companys consolidated
financial statements.  In
May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles which identifies the sources of accounting principles and
the framework for selecting the principles to be used in the preparation of
financial statements of nongovernmental entities that are presented in
conformity with generally accepted accounting principles (GAAP) in the United
States (the GAAP hierarchy).  The statement is effective 60 days following
the SECs approval of the Public Company Accounting Oversight Board amendments
to AU Section 411, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles.  The Company does not anticipate the
adoption of SFAS No. 162 will have a material effect on the consolidated
financial statements.