UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,
D.C.  FORM 10-Q (Mark One) X QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the
quarterly period ended September 30, 2008  TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For
the transition period from to Commission
file number 333-141875 UTEC, INC. (Exact
name of Registrant as specified in its charter)  NEVADA
20-5936198(State or other jurisdiction of incorporation or
organization)
(IRS Employer Identification No.)  2420 Springer Drive,
Suite 110 Norman, OK
73069(Address of principal executive offices)  (620) 783-1361(Registrants telephone number, including area
code) (Former name, former address and former fiscal year, if changed
since last report) Indicate by check mark whether the registrant (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes . [ X]  No .  [  ] Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in rule
12b-2 of the Exchange Act.  Large
accelerated filer [
 ] Accelerated
Filer [  ] Non-accelerated
filer [
 ] (Do not check if a smaller reporting
company) Smaller
reporting company [X]  Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). Yes
 [   ]  No [X]  APPLICABLE ONLY TO CORPORATE ISSUERS As of November 1, 2008, the Company had 51,968,159 issued and
outstanding shares of its common stock.        PART I  FINANCIAL
INFORMATION The accompanying interim
unaudited financial statements of UTEC, Inc. (a Nevada corporation) are
condensed and, therefore, do not include all disclosures normally required by
accounting principles generally accepted in the United States of America. These
statements should be read in conjunction with the Company's most recent annual
financial statements for the year ended December 31, 2007 included in a Form 10
filed with the U.S. Securities and Exchange Commission (SEC) on May 14, 2008.
In the opinion of management, all adjustments necessary for a fair presentation
have been included in the accompanying interim financial statements and consist
of only normal recurring adjustments. The results of operations presented in the
accompanying interim financial statements for the nine months ended September
30, 2008 are not necessarily indicative of the operating results that may be
expected for the full year ending December 31, 2008.            UTEC, INC.  Comparative Financial Statements and accompanying Notes  As of December 31, 2007 and for the nine months Ended September
30, 2008        Table
of Contents  Financial
Statement  Consolidated
Balance Sheet F-1 Statement
of Operations F-2 Statement
of Stockholders' Equity F-3 Statement
of Cash Flows F-4  Notes
to Financial Statement  Organization
and Summary of Significant Accounting Policies 5 Acquisitions 9 Property,
Plant and Equipment 9 Operating
Leases 10 Related
Party Transactions 10 Intangible
Assets 11 Earnings
(Loss) Per Share 12 Income
Taxes 13 Contractual
Obligations 14 Employee
Stock Plan 16 New
Accounting Pronouncements 17


UTEC
Inc.Consolidated Balance
sheetAs of September 30, 2008
(unaudited) and December 31, 20072008
(unaudited)

2007ASSETSCurrent AssetsCash and cash
equivalents
$13,309

$89,377Accounts receivables
197,280

52,415Inventory
28,093

59,440Prepaid expenses
17,750

6,115Deferred Tax Asset (Note
8)
-

14,300Total
Current Assets
256,432

221,647Prepaid Ground Lease (Note
5)
55,891

64,300Intangible Assets, net (Note
6)
1,074,964

1,127,250Property, plant &
equipment, net (Note 3)
744,142

694,455Deferred Tax Asset (Note
8)
124,200

105,600Total assets
$2,255,629

$2,213,252LIABILITIESCurrent liabilitiesAccounts payable and accrued
liabilities
$241,161

$247,308Amounts payable to related
parties
136,959

115,062Short term note to related
parties
112,000

-Total
Current Liabilities
490,120

362,370STOCKHOLDERS'
EQUITYAuthorized:74,000,000 common shares, par
value of $0.001 per shareIssued
and outstanding:51,968,159
at September 30, 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
September 30, 2008
4242,013 at
December 31, 2007


42Additional paid in
capital
2,117,263

2,116,376Retained earnings
(deficit)
(403,764)

(319,292)Total
Stockholders' Equity
1,765,509

1,850,882Total liabilities and
stockholders' equity
$2,255,629

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





F-1    UTEC
Inc.Comparative
Consolidated Statement of OperationsNine-month period ended September 30

Three-month period ended September 302008 (unaudited)

2007 (unaudited)

2008 (unaudited)

2007 (unaudited)RevenueRevenue
$1,888,427

$1,146,571

$821,361

$292,629Operating
ExpensesCost
of Sales
521,259

197,920

247,477

44,744General
and administrative expense
689,044

433,387

248,093

108,662Selling
expense
198,961

101,115

56,259

55,290Research
and development expense
567,935

643,425

235,003

283,566Total
operating expenses
1,977,199

1,375,847

786,832

492,262Income
(loss) before income taxes
(88,772)

(229,276)

34,529

(199,633)Provision
for income taxes (benefit)
(4,300)

(43,700)

23,100

(47,596)Net
income (loss)
$(84,472)

$(185,576)

$11,429

$(152,037)Earnings
(loss) per share - basic and diluted
$(0.002)

$(0.0035)

$0.000

$(0.003)Weighted
average number of common shares outstanding as of September 3052,538,590

52,623,413

51,968,159

53,707.759The
accompanying notes are an integral part of these financial
statements.     F-2





UTEC
Inc.Comparative
Consolidated Statements of Stockholders' Equity
for
the nine-month period ended September 30, 2008 (unaudited) and
the
year ended December 31, 20072007Common 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 patent rights and contractual services
850,000

850
70,750Common
shares issue for consulting services
50,000

50
22,450Capital
contribution by shareholder for consulting services



38,250Net
Loss for the twelve months ended December 31, 2007


-
-
(285,341)Balance,
December 31, 2007
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, 2008
53,756,159
42,013
$53,798
$2,116,376
$    319,292)Cancel
shares issued pursuant to employee stock grants (unaudited)
(1,898,000)

(1,914)
(105,487)Sale
of outstanding non-restricted stock (unaudited)
110,000

126
41,874Options
issued pursuant to employee option plan (unaudited)



64,500Net
Loss for the nine months ended September 30 (unaudited)




(84,472)Balance,
September 30, 2008
51,968,159
42,013
$52,010
$2,117,263
$(403,764)The
accompanying notes are an integral part of these financial
statements.       F-3





UTEC
Inc.Comparative
Consolidated Statements of Cash Flowsfor
the nine-month period ended September 302008 (unaudited)

2007 (unaudited)Cash
flows from operating activities:Net
Income (loss)

$(84,472)

$(185,576)Adjustments
to reconcile net income (loss) to net cashprovided
by operating activities:Depreciation

32,200

32,048Amortization
of intangibles

60,694

59,950Employee
option grants issued

64,500Employee
stock grants issued

-

79,167Employee
stock grants issued (cancellation)
(107,401)Stock
grants issued in exchange for services


22,450Deferred
tax benefit

(4,300)

(43,700)Accounts
receivables

(144,865)

(100,349)Inventories

31,347

-Prepaid
Expenses

(11,635)

-Accounts
payable and accrued liabilities
15,751

139,119Total
cash flows from operating activities
(148,181)

3,109Cash
flows from investing activitiesPayments
for property, plant and equipment
(81,887)

-Cash
in UTEC Corporation when contributed to UTEC Inc.
-

15,000Total
cash flow from investing activities
(81,887)

15,000Cash
flows from financing activitiesProceeds
from line-of-credit from related party
286,936

-Repayment
on line-of-credit to related party
174,936

-Sale
of Common Stock

42,000Total
cash flows from financing activities
154,000

-Increase
(decrease) in cash and equivalents
(76,068)

18,109Cash
and cash equivalents, beginning of period
89,377

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

$13,309

$38,209Supplemental
DisclosureIncome
taxes paid

$
              -

$
                 -Interest
paid

$     10,261

$
            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)Common
stock issued in exchange for patent rights
$
          -

$      1,600The
accompanying notes are an integral part of these financial
statements. F-4


UTEC, INC. Notes to Consolidated Financial Statements September 30, 2008 and December 31, 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.  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) Basis of Presentation  The accompanying financial statements and notes thereto have been
prepared pursuant to the rules and regulations of the Security and Exchange
Commission.  Accordingly, certain disclosures normally prepared in
accordance with accounting principles generally accepted in the United States
have been omitted.  The accompanying financials statements and notes
thereto should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Companys 2008 Form 10 Registration
Statement.  The financial information included herein is unaudited; however,
such information reflects solely normal recurring adjustments which are, in the
opinion of management, necessary for a fair presentation of the results for the
interim period presented.  The results of operation for the three and nine month periods
ended September 30, 2008 and 2007, are not necessarily indicative of the results
to be expected for the full year.         c) 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.   d) 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 $13,309 and
$89,377cash or cash equivalents at
September 30, 2008 and December 31, 2007 respectively  e) 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.  f) 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.   g) Inventories  Inventories, when the Company has them, consist of purchased
materials held for resale and are carried at the lower of cost (first-in,
first-out method) or market.  h) 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.  i) Research and Development Costs  Research and development costs for the development of new products
and update of existing products are expensed as incurred.  j) 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.  k)
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 three months ended September 30, 2008, two customers
accounted for approximately 58% and 12% of the company sales.  For the nine months ended September 30, 2008, two customers
accounted for approximately 53% and 15% of the Companys net sales,
respectively.  For the three months ended September 30, 2007, one customer
accounted for approximately 33% of the company sales.  For the nine months ended September 30, 2007, two customers
accounted for approximately 43% and 26% of the Companys net sales.  At December 31, 2007 and September 30, 2008, one customer
accounted for approximately 80% and 38% respectively of the Companys accounts
receivable.         l)
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.  m)
Going Concern Assumption  The Companys group of activities consists solely of UTeC
Corporation.  The Companys business outlook for 2008 includes continuing
the second year of a five (5) year technical services contract with Hallowell
Manufacturing LLC to support the product and manufacturing technology at the
Hallowell explosives plant site. The business plan for the Company is to add to
its portfolio of intellectual property by signing agreements with other
companies with existing technology in the materials processing business.
 The Company will develop those technologies for use in undeveloped
markets. The Company also plans to expand its material sales business which
currently constitutes less than 20% of its revenue. The Companys focus in this
area will be to develop overseas sources of raw materials for sale to companies
it already does business with or in markets where it has a presence.  For
the nine months ended September 30, 2008 this number has risen to about 53% of
total sales.  We expect to end the fiscal year 2008 with the share of the
total revenue in excess of last years.  n)  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 September 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.  o)  Advertising Costs  Advertising costs are expensed as incurred and for the three-month
periods ending September 30, 2008 and 2007 totaled approximately $6,162 and
$24,807, respectively.  These same costs for the period nine-month period
ending September 30, 2008 and 2007 totaled approximately $41,554 and $27,312.
 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

737,185Identifiable
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
September 30, 2008 and December 31, 2007:          2008


2007(unaudited)Buildings and leasehold improvements
$
501,500

$
501,500Machinery and equipment

214,896


195,026Transportation equipment

24,538


24,538Furniture
and fixtures

16,121


16,121Constructed
asset in progress

62,017


0819,072


737,185Less
accumulated depreciation

74,930


42,730$
744,142

$
694,455  Depreciation expense was approximately $32,000 for each nine-month
period ended September 30, 2008 and 2007 and was $10,682 for the three-month
period ended September 30, 2008 and 2007.  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.  Total rent expense related to operating leases was approximately
$1,686 for the three-month period ending September 30, 2008 and 2007 for each
period and the total rent expense for the nine months ending September 30, 2008
and 2007 was approximately $4,496 and $5,058 respectively.  Future ground lease payments (see Note 5), subject to adjustment
for inflation, are as follows:  2008 None 2009 None 2010 $85,800 2011 $85,800 2012 $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 September 30, 2008 and 2007, ESI charged the Company
$12,645 and $20,941 respectively for such services.  For the nine months
ended September 30, 2008 and 2007 ESI charged the Company $38,136 and $51,841
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 nine months ended September 30, 2008 and 2007, the Company has
incurred management fee expense of $20,000 pursuant to this agreement, all of
which is included in Accounts Payable to Related Parties, at September 30, 2008
and 2007 respectively.  The agreement was revised as of September 30, 2008
and the minimum annual fee increased to $150,000 of which $12,500 was expensed
in September of 2008.  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 September 30, 2008 and 2007 being $55,891 and $65,891.
 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 September 30, 2008 and
2007 are $112,000 and $0 respectively.  Interest expense accrued on the
line of credit was $10,260 and $558 during the nine months ended September 30,
2008 and 2007, respectively and $2,967 and $0 for the three month ended
September 30, 2008 and 2007, respectively.  6. Intangible
Assets  Intangible assets consist of the following at September 30, 2008
and December 31, 2007:         2008


2007(unaudited)Patent rights

71,600


71,600Customer relationships

1,125,000


1,125,000Accumulated amortization

(121,635)


(69,350)$
1,074,965

$
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 which the Company provides.  Amortization expense for the next five years related to intangible
assets is expected to be as follows:  2008 $70,400 2009 70,400 2010 70,400 2011 70,400 2012 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 nine and three months ended September 30, 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
nine and three months ended September 30: Nine months (unaudited)

Three months (unaudited)2008


2007


2008


2007Current
$
(0)

$
0

$
(0)

$
0Deferred
(benefit)

(4,300)


(43,700)


23,100


47,596Total
$
(4,300)

$
(43,700)

$
23,100

$
(47,596)   The Deferred tax asset consists of the following at September 30,
2008 and December 31, 2007:  2008


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

$
(16,600)Deferred
stock compensation

(24,500)


(40,800)Deductible
prepaid insurance

6,700


2,300Net
operating loss carryforwards

(89,800)


(64,800)Net
Deferred Tax Asset
$
(124,200)

$
(119,900)  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 either the generation of future taxable
income during the periods in which those temporary differences are expected to
become deductible.  Management considers the entire deferred tax asset to
be fully realizable at September 30, 2008, and accordingly, has not recorded a
valuation allowance.  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 September 30, 2008, the Company has net operating loss
carryforwards totaling approximately $231,000, which primarily begin 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 nine and three months ended
September 30 as follows:  Nine
months2008
(unaudited)

2007
(unaudited)Computed expected income
taxes
$(30,200)

(34.0)%

$(78,000)

(34.1)%Nondeductible expenses
26,400

29.7

31,700

85.0         Other, principally state
taxes
(500)

(0.6)

2,600

(43.5)Provision (reversal) for
valuation allowance
0

(0.0)

0

5.7$(4,300)

(4.8)%

$(43,700)

19.1%   Three
months2008
(unaudited)

.2007
(unaudited)Computed expected income
taxes
$17,200

(34.0)%

$(67,900)

34.0%Nondeductible expenses
3,500

34.0

6,500

34.2Other, principally state
taxes
2,400

3.4

904

5.0Provision (reversal) for
valuation allowance
0

(0.0)

12,900

(0.0)$23,100

3.4%

$(47,596)

73.2%  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 a 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 5.  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  Effective
March 26, 2008 the restricted shares issued pursuant to the Employee Stock
Ownership Plan dated January 11, 2007 were cancelled in their entirety, except
for 16,000 which were misplaced by the employee and will be cancelled in a
timely manner.  The Plan has since been rescinded.  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%          A
summary of the status of The Companys non-vested stock options as of September
30, 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 September 30, 2008
0
$0.00   For
the three months ended March 31, 2008, the Company did not recognize
compensation expense 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 due to the Plan being
adopted so late in the quarter with no appreciable time having lapsed for
amortization to be taken.  For
the three and nine month period ending September 30, 2008 share based
compensation expense of $32,250 and $64,500 was recognized, respectively.   11. New
Accounting Pronouncements  In September 2006, the FASB issued Statement of Financial
Accounting Standards (SFAS) No. 157, Fair Value Measurements, as
amended in February 2008 by FSP FAS 157-2, Effective Date of FASB Statement
No. 157. The provisions of SFAS No. 157 are effective for the
Company as of January 1, 2008. However, FSP FAS 157-2 defers the effective
date for all nonfinancial assets and liabilities, except those items recognized
or disclosed at fair value on an annual or more frequently recurring basis,
until January 1, 2009. SFAS No. 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. We do not expect the adoption of this statement to have a material
impact on our financial statements.         In February 2007, the FASB issued SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities - Including an
amendment of FASB Statement No. 115. The provisions are effective for
the Company as of January 1, 2008. This statement permits entities to
choose to measure many financial instruments and certain other items at fair
value and report unrealized gains and losses on these instruments in earnings.
We do not expect the adoption of this statement to have a material impact on our
financial statements.  In December 2007, the FASB issued SFAS No. 141(R),
Business Combinations. The provisions, which change the way companies
account for business combinations, are effective for the Company as of
January 1, 2009. This statement requires the acquiring entity in a business
combination to recognize assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement
objective for all assets acquired and liabilities assumed; and requires the
acquirer to disclose all information needed by investors to understand the
nature and financial effect of the business combination. We do not expect the
adoption of this statement to have a material impact on our financial
statements.  In December 2007, the FASB also issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements - an amendment
of Accounting Research Bulletin No. 51, the provisions of which are
effective for the Company as of January 1, 2009. This statement requires an
entity to classify noncontrolling interests in subsidiaries as a separate
component of equity. Additionally, transactions between an entity and
noncontrolling interests are required to be treated as equity transactions. We
are currently evaluating the impact of this statement on our financial
statements.             Item 2. 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, LLC..  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.
 This business unit will be independently staffed and structured in order
to pursue commercialization of Cold Plasma Oxidizer waste destruction systems
during 2008.  Revenues  Revenues
for the three and nine months ended September 2008 were $821,400 and $1,888,400,
respectively.  For the three and nine months ended September 30, 2007
revenues were $292,600 and $1,146,600, respectively. Major activities that
contributed to this revenue were primarily in the areas of contract research and
product development and independent product testing.  Revenues totaling
$647,000 and $1,185,700 for the three and nine months ended September 30, 2008,
came from the Specialty Chemicals Unit through the manufacture and sale of
inorganic chemical sensitizers to customers engaged in commercial explosives
production. For the three and nine month periods ended September 30, 2007
revenue from the same products totaled $115,300 and $471,100, respectively for
each period.  For the nine months ended September 30, 2008, this number has
risen to about 62% of total sales.  We project that 2008 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.
 For the three and nine month period ending September 30, 2008 the wage and
burden expense as a percent of total expenses was 42% and 39% respectively,
totaling $237,200 and $568,300, respectively.  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.         Some
of the other R&D activities during the last year have been in the testing,
analysis and QC (quality control) areas and the costs associated with these
activities were for the three and nine months ended September 30, 2008,
approximately $70,000 and $151,000, respectively.  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.  None of the facilities are
operated by the Companys customers or licensees or any other third parties.  Travel
related expenses, which mostly constitute business support and development
activities, for the three and nine month periods ending September 30, 2008 were
$32,700 and $97,000 respectively, reflecting increased travel pursing financing
arrangements and higher travel costs.  For the three and nine month periods
ending September 30, 2007 these same costs were $21,700 and $55,000,
respectively.  Accounting
and management expenses for the three months ending September 30, 2008 and the
nine months ended September 30, 2008, were $71,300 and $210,500, respectively,
which includes accruals of $32,000 and $48,000, respectively.  For the same
periods September 30, 2007 the costs were $78,000 and $126,600.  The
company expended capital items in the three months ending September 30, 2008
totaling $21,000, and the Company is building an asset which will be placed in
service later this year.  In the three month period ending March 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.  For the three andnine months ended September 30, 2008,
amortization expense of $64,500 was recorded for these new options.  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 its 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, 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 three months ended
September 30, 2008, in the amount of $112,000.  The company expects to
carry a balance through to the end of the year absent new or additional
investment.          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 were previously listed in the Companys
Form 10 filed on March 31, 2008, and amended.  The
Companys 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 is 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 September 30,
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 September 30, 2008, the company had $13,000 cash on hand.  This was a
temporary situation and with a temporary infusion of cash from an internal
source company operations were not negatively affected.  Periodically, the
Company finds itself in a negative cash flow position.  While the Company
has limited liquidity, it did finish the year funding its operations with
internally generated cash, with the exception of some short term temporary
funding required during the third quarter.  When UTEC Corporation was
formed and acquired by UTEC, Inc., management believed that the Company would
need approximately $500,000 to properly fund operations until such time as the
Company was able to generate enough cash flow from increased or new business to
generate appropriate amounts of working capital.  This money was to be
raised via a secondary offering or through private placements.  Due to
current financial market conditions, the Company was unable to externally
finance, through independent third parties, the projected $500,000 management
believed would be necessary to properly fund operations.  The Company
exceeded managements cash flow projections and with short term financing from
Energetic Systems, Inc. LLC (ESI) was able to meet its obligations.  To
keep these short term borrowings to a minimum, the Company negotiated extended
payment terms with some of our        vendors.
Management believes the Company will continue to have negative working capital
for 2008 or until such time as market conditions improve and we can either raise
sufficient funds via a secondary offering or private placement.  ESI has
continued to fund the Company's short term needs in 2008 and has indicated a
willingness to do so until such time as other funds become available.  As
for years beyond 2008, Management believes the new business being developed will
provide sufficient funds to adequately fund working capital for the foreseeable
future.  Additionally, we are continuing our efforts to locate a
substantial investor to fund many of our new business projects (e.g. waste
destruction) and as part of that investment provide working capital for our
ongoing legacy business needs. To
fund the expansion of the companys business into the Hazardous Chemicals and
Biological Waste Destruction business, the Company will need to raise
significant capital with debt and/or equity financing. If the Company is
unsuccessful in securing additional funding, the commercialization schedule for
the new Waste Destruction marketing plan will be delayed.  The
Company believes it will generate sufficient cash flow to cover its current
business responsibilities over the next 12 months, but if short term funding is
necessary, the Company has assets available to act as security to guarantee
short term funding from conventional loan sources. If necessary, the management
may guarantee these potential loans, but there is no current written or oral
agreement for such guarantees. The Company has from time to time sufficient
receivables to act as security for short term funding guarantees.  Item 3.
 Quantitative and Qualitative Disclosures About Market Risk  Not Applicable.  Item 4T. Controls
and Procedures.  We carried out an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) as of September 30, 2008.  This evaluation was carried out under
the supervision and with the participation of our Chief Executive Officer and
Chief Financial Officer.  Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that, as of September 30, 2008 our
disclosure controls and procedures are effective.  There have been no
changes in our internal controls over financial reporting during the quarter
ended September 30, 2008.  Disclosure controls
and procedures are controls and other procedures that are designed to ensure
that information required to be disclosed in our reports filed or submitted
under the Exchange Act are recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer, to allow timely decisions
regarding required disclosure.         PART II  OTHER INFORMATION  Item 6. Exhibits Exhibits:  Exhibit
No.
Document
Location31
Rule
13a-41(a)/15d-14(a) Certificates
Included32
Section
1350 Certifications
Included           SIGNATURES Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.   UTEC, INC.    November
18, 2008 /s/
Fortunato Villamagna Date Fortunato Villamagna, Director & CEO,