What changed in this filing

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Item 1. Business

2010-03-22 compared with 2009-03-10 · 230 added, 260 removed, 24 unchanged (95% of the section changed)

the context requires otherwise, reference in this Form 10-K to UTEK, the Company, we, us and words of similar import refer to UTEK Corporation and its wholly owned subsidiaries, UTEK-Europe, Ltd.

UTEK ip , Ltd.

UTEK ip was closed down in 2008 and all operations of that subsidiary are currently being serviced by UTEK, although the legal entity has not yet been dissolved.

Unless the context requires otherwise, reference in this Form 10-K to UTEK, the Company, we, us and words of similar import refer to UTEK Corporation and its wholly owned subsidiaries,

UTEK-Europe, Ltd.

(Europe), UTEKip, Ltd.

(Israel) and UTEK Real Estate Holdings, Inc.

was dissolved in 2008 and all operations of that subsidiary are currently being serviced by UTEK.

In addition, the legal entities for Innovaro, Ltd.,

Pharmalicensing, Ltd., Carmi, Inc., and Social Technologies, Group, Inc.

still exist, but their operations have been assimilated by UTEK and UTEK-Europe.

UTEK commenced operations in 1997 and was originally incorporated under the laws of the State of Florida, and subsequently under the laws of the State of Delaware in July 1999.

We provide comprehensive innovation

services to help client companies enhance their innovation capabilities and create value from their intellectual property.

non-diversified, closed-end management investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act).

We do not have an external investment

adviser, and our management, under the supervision of our Board of Directors, makes our investment and management decisions.

Business Segments

We help clients become stronger innovators, develop compelling strategies to drive and catalyze growth, rapidly source externally developed

technologies, create value from their intellectual property and gain foresight into marketplace and technology developments that affect their business.

UTEK maintains three business segments that help clients enhance their innovation capabilities:

Strategic innovation consulting

Sale of technology rights

Subscription and other services

During 2008, the Company acquired four companies to enhance our ability to provide end-to-end innovation services.

We will continue to seek to acquire additional innovation services companies that enhance our capabilities or expand the

territories in which we operate.

Pharmalicensing, Ltd.

and Carmi, Inc.

(Strategos) still exist, but their operations have been assumed by UTEK and UTEK-Europe, Ltd.

We commenced operations in 1997 and were originally incorporated under the laws of the State of Florida, and subsequently under the laws of the State of Delaware in July 1999.

Until September 30, 2009, we were a non-diversified, closed-end management investment company that had elected to be treated as a

business development company (BDC) under the Investment Company Act of 1940 (1940 Act).

Withdrawal of our Election

to be Treated as a Business Development Company under the Investment Company Act of 1940

On October 1, 2009, we filed

a notification on Form N-54C with the Securities and Exchange Commission (SEC) withdrawing our election to be regulated as a BDC under the 1940 Act.

As such, we are reporting as an operating company as of October 1, 2009.

We determined, based on our current business focus and the fact that the equity interests we hold have constituted a

declining amount of our assets over the last couple of years, that we no longer met the requirements to be regulated as a BDC under the 1940 Act.

Accordingly, and after careful consideration of the requirements applicable to BDCs under the 1940 Act,

the cost of compliance with the provisions of the 1940 Act and a thorough assessment of our current business model, our Board of Directors determined that we should withdrawal our election to be regulated as a BDC under the 1940 Act.

The withdrawal of our election to be regulated as a BDC caps the transition of our business to a global IP licensing and innovation services

We believe that this change will reduce our administrative and regulatory compliance costs, including the significant legal, valuation and other compliance-related expenses associated with the business development company regulatory regime,

as well as increase our ability to raise financing and provide us with greater flexibility in operating our business.

As an operating company, we are required to consolidate UTEK Real Estate Holdings, Inc.

and its subsidiaries:

Ybor City Group, Inc., 22 nd Street of Ybor City, Inc., ABM of Tampa Bay, Inc.

and Cortez 114, LLC (collectively UTEK Real Estate).

This represents a change because, pursuant to accounting standards applicable to BDCs, UTEKs investments in these companies were categorized as portfolio company investments and were not consolidated into UTEK.

The assets, liabilities and

results of operations of UTEK Real Estate have been included in our consolidated financial statements from October 1, 2009.

The consolidation of UTEK Real Estate had a significant effect on our balance sheet as of December 31, 2009 as it

added approximately $500,000 in investments, $8.0 million in land and buildings and $4.2 million in related long-term debt.

The consolidation did not have a material effect on our results of operations for the three months ended December 31,

As a result of our de-election from BDC status, we make reference to both Investment Company Accounting and Operating

Company Accounting throughout this document.

Investment Company Accounting, as we refer to it, is defined as accounting in accordance with U.S.

generally accepted accounting principles (US GAAP) for investment companies under the 1940

Operating Company Accounting, as we refer to it, is defined as accounting in accordance with US GAAP other than for Investment Companies under the 1940 Act.

Business Overview

We help clients become stronger innovators, develop compelling strategies to drive and catalyze growth, rapidly source externally developed technologies, create added value from their intellectual

property and gain foresight into marketplace and technology developments that affect their business.

These services are primarily provided throughout the United States and the United Kingdom.

Innovation Consulting Services

Strategic Innovation Consulting

Innovation Consulting

The Company provides strategic innovation consulting services to enable

clients to become more efficient by finding new avenues to growth, fighting commoditization, improving return on investment, transforming the organization, and removing barriers to innovation.

Business value is delivered to our clients through

working with a team of seasoned and experienced professionals capable of unlocking an organizations capacity by offering the following services:

Our clients require strategies to help them embrace greater innovation

capabilities.

We apply innovation insights and build those strategies with supporting infrastructure, processes & mechanisms, creating a culture primed for repeatable innovation success.

We help organizations create and realize new,

breakthrough growth strategies, create and execute non-incremental new growth platforms and opportunities, and develop the capability for ongoing creation and execution of those growth platforms and concepts.

We provide strategic innovation consulting services to enable clients to become more efficient by finding new avenues to growth, fighting

commoditization, improving return on investment, transforming the organization, and removing barriers to innovation.

Business value is delivered to our clients through working with a team of seasoned and experienced professionals capable of

unlocking an organizations capacity by offering the following services:

Identify and develop new segments and markets;

4 unchanged sentences

Foresight and Trend Research

Foresight is the ability of an organization to understand the ways in which the future might emerge and to apply that understanding in organizationally useful ways.

Strategic foresight may also be used to detect

adverse conditions, guide policy and help shape strategy.

We provide services to clients that build the capacity for foresight, including monitoring trends, researching topics of interest, forecasting alternative scenarios, developing technology

roadmaps, creating growth platforms and embedding futures thinking within the organization.

We also offer innovative futures programs that

provide clients with up-to-the-minute knowledge, expert insight, high-level learning experiences, and opportunities to network with experts and peers.

Foresight is the ability of an organization

to understand the ways in which the future might emerge and to apply that understanding in organizationally useful ways.

Strategic foresight may also be used to detect adverse conditions, guide policy and help shape strategy.

We provide services to

clients that build the capacity for foresight, including monitoring trends, researching topics of interest, forecasting alternative scenarios, developing technology roadmaps, creating growth platforms and embedding futures thinking within the

organization.

We also offer innovative futures programs that provide clients with up-to-the-minute knowledge, expert insight,

high-level learning experiences, and opportunities to network with experts and peers.

Our futures programs are as follows:

Futures Consortium is a membership service that provides members access to research briefs, member meetings and networking events, and one half-day

onsite workshop.

Futures Observatory is a membership service that provides members a steady stream of observations that

illustrate the latest developments in key global trends.

The observations are brief, timely discussions of real-life events or circumstances in key markets, which exemplify how trends are playing out in the market.

Futures Interactive is a customizable, web-based knowledge management tool that gathers and organizes information from across your company in one,

intuitive platform.

Approximately 55% of the Companys revenue in 2008 was from innovation consulting services.

The Company has a global client base including both private and public sector organizations, representing multiple industries including fast

moving consumer goods, consumer packaged goods, retail, medical, telecommunications, chemicals, media, financial services, energy, utilities and government agencies.

The Company had two significant consulting clients for the year ended

December 31, 2008, which accounted for 27% of the total income from operations.

The innovation service business is highly competitive.

We currently have significant competitors for many of our service offerings, including but not

limited to McKinsey and Company, The Boston Consulting Group and Monitor Group, Inc.

for innovation consulting services and Forrester Research, Inc.

Futures Consortium is a membership service that provides members access to research briefs, member meetings and networking events, and onsite workshops.

Futures Observatory is a membership service that provides members a steady stream of observations that illustrate the latest developments in key global trends.

The observations are

brief, timely discussions of real-life events or circumstances in key markets, which exemplify how trends are playing out in the market.

Futures Interactive is a customizable, web-based knowledge management tool that gathers and organizes information from across a company in one, intuitive platform.

Approximately 70%, 55% and 0% of our revenue in 2009, 2008 and 2007, respectively, was from innovation consulting services.

We have a global client base including both private and public sector

organizations, representing multiple industries including fast moving consumer goods, consumer packaged goods, retail, medical, telecommunications, chemicals, media, financial services, energy, utilities and government agencies.

significant consulting client for the year ended December 31, 2009 and two significant consulting clients for the year ended December 31, 2008, which accounted for 10% and 27% of the total revenue, respectively.

The strategic

innovation consulting business is highly competitive.

We currently have significant competitors for many of our service offerings, including but not limited to McKinsey & Company, The Boston Consulting Group and Monitor Group, Inc.

strategic innovation consulting and Forrester Research, Inc.

and Gartner, Inc.

for foresight and trend research.

Sale of Technology Rights

Our services enable

companies to acquire externally developed technologies from universities, university incubators, federal labs, medical centers, and corporate research laboratories worldwide to augment their internal research and development efforts.

technology rights refers to the process by which new technologies, developed in universities, government research facilities, corporate R&D labs or similar research settings, are licensed to companies for potential commercial development and

Sale of Technology

Our services enable companies to acquire externally developed technologies from universities, university

incubators, federal labs, medical centers, and corporate research laboratories worldwide to augment their internal research and development efforts.

A sale of technology rights refers to the process by which these technologies are licensed to

companies for potential commercial development and use.

Our goal is to provide our clients an opportunity to acquire and commercialize innovative technologies primarily developed external to their business.

Historically, to effectuate a technology transfer, we would typically create a newly formed company to acquire a new technology from a university, medical center, corporation or federal research laboratory and then

sell this newly formed company to our client for securities or cash.

The plan was that the shares we received in these exchanges would, in the course of our business, be sold for cash or other assets.

A benefit of effectuating technology transfers

through this process is that such transactions did not result in a current taxable event for us for income tax purposes.

Future technology transfers will most likely be for cash given the change to larger market cap clients.

Approximately 23% of the Companys revenue in 2008 was from the sale of technology rights.

The Company has a global client base including private and public sector organizations of varying sizes, representing a wide range of

capable competitors in the licensing business including, IP Group plc, British Technology Group plc, Yet2.com, Competitive Technologies, Inc.

Historically, to effectuate a technology transfer, we would typically create a newly formed company to acquire a new technology from a

university, medical center, corporation or federal research laboratory and then sell this newly formed company to our client for securities or cash.

In the ordinary course of business, we would then sell the securities we received in exchange for

cash or other assets.

A benefit of effectuating technology transfers through this process is that such transactions did not result in a current taxable event for income tax purposes.

A disadvantage resulted from the fact that our business focused on

small- and mid-cap companies, which are typically more volatile and left us open to the risk of declining stock prices.

Overall equity market conditions generally forced micro-capitalization stock prices down, making it more difficult for some of our clients to issue a reasonable amount of stock with sufficient value in exchange for these technologies during

In addition, we began to pursue technology transfers on a more selective basis to mitigate the risk of declining stock prices with respect to the stock consideration we have historically received in connection with our technology transfers.

Following our study of the potential market and resulting opportunity for UTEK, we shifted our focus from technology

transfers with small- and micro-cap companies to developing relationships with large capitalization clients in 2009.

Our shift toward these larger capitalization clients, which are expected to be more stable and more amenable to cash based

technology transfer services, requires us to develop a modified sales approach.

This strategy helps us mitigate the risk of declining stock prices with respect to the stock consideration previously received in connection with technology transfers

with small- to mid-cap companies whose stock is typically more volatile.

Our client make up is now more heavily weighted

towards larger capitalization companies, which has caused a significant slowdown in the process to complete a technology transfer given the more measured decision making process with respect to executing a technology transfer by these companies.

This has resulted in a decrease in the number of executed technology transfers during 2009.

Approximately 0%, 23% and 81% of our revenue in 2009, 2008 and 2007, respectively, was from the sale of technology rights.

We have a global client base including private and public sector organizations of

varying sizes, representing a wide range of industries.

We have capable competitors in the licensing business including, IP Group plc, British Technology Group plc, Intellectual Ventures, Yet2.com,

Competitive Technologies, Inc.

and many other firms.

In addition, university technology commercialization offices also provide location

specific competition with regard to the intellectual property, which they have developed and have available for license.

Subscription and Other

Information ServicesWebsite Subscriptions

The Company offers subscription-based website services, which provide information to professionals in the licensing industry to improve their knowledge base and facilitate licensing transactions.

These services are as

www.PharmaTransfer.com provides a source of research and business development opportunities for the international

pharmaceutical market encompassing all areas of pipeline development, from early-stage discovery, through pre-clinical and clinical trials, to registered products that are all available for co-development or licensing.

www.KnowledgeExpress.com is a searchable database of information for licensing professionals, which provides our clients with comprehensive

coverage of licensing agreements, corporate profiles, clinical trials, deals, drug pipelines, drug sales, licensable technologies, patents and royalty rates.

www.Pharmalicensing.com (acquired in 2008) is a biopharmaceutical innovation resource designed for life science professionals involved with partnering, licensing and business development worldwide.

Pharmalicensing affords clients the ability to in-license and out-license intellectual property.

www.TechEx.com is an online

searchable database for life and physical science discoveries.

www.TekScout.com is a crowd sourcing service that facilitates the

solving of client research and development problems by utilizing external resources for innovation.

Patent Analytics

The goal of the Companys patent analytic service is to help our clients create marketplace value from their intellectual property

We help clients identify the strengths and weaknesses of their own IP as well as that of companies in the same or adjacent industries.

Additionally, by identifying gaps and opportunities in the IP landscape, we assist

clients with developing IP acquisition, disposition, and management strategies.

In addition, university technology commercialization offices also provide location specific competition with regard to the intellectual property which they have developed and have available for

Subscription and Other Services

Subscription and other services include income from both our subscription services segment and our other services segment.

Online Licensing Platform

Our online licensing services division provides

the following subscription-based website services:

Pharmalicensing is a biopharmaceutical innovation resource designed for life science professionals driving partnering, licensing and

business development worldwide.

Pharmalicensing affords clients the ability to in-license and out-license intellectual property and also provides partnering services, business development reports, industry news and a jobs source for candidates and

To further grow traffic, we are continuing to develop partnerships with sites such as Patents.com.

Medical Device Licensing is an online global resource for open innovation, partnering, licensing and business development within the

medical device industry.

Medical Device Licensing benefits from the Pharmalicensing traffic and partnerships as well as establishing some of its own with member associations around the globe to further its reach and exposure.

Knowledge Express is a searchable database of information for licensing professionals, which provides clients with comprehensive coverage

of licensing agreements, corporate profiles, clinical trials, deals, drug pipelines, drug sales, licensable technologies, patents and royalty rates.

Pharma Transfer provides a source of research and peer reviewed business development opportunities for the international pharmaceutical

market encompassing all areas of pipeline development including early-stage discovery, pre-clinical and clinical trials and registered products that are all available for co-development or licensing.

TekScout , a development stage platform, enables companies to outsource unfinished R&D projects to scientists from around the world.

TekScout provides a platform for companies to supplement internal R&D and resources to accelerate product development.

Global Technology Licensing

The Companys global technology licensing division assists clients with the enhancement of their new product pipeline through the acquisition of

proprietary technologies primarily from universities, medical centers, federal research laboratories, select corporations, and university incubator programs.

A global network of technology providers, coupled with an in-house staff of scientists and

researchers, offers companies low-cost, low-risk access to review and acquire new technologies from research centers around the world.

After gaining an understanding of our clients technology and business needs, we find and assess

technologies for our clients.

Our global technology licensing service enables clients to enhance their new

product pipeline through the acquisition of proprietary technologies primarily from universities, medical centers, federal research laboratories, select corporations, and university incubator programs.

A global network of technology providers,

coupled with an in-house staff of scientists and researchers, offers companies low-cost, low-risk access to review and acquire new technologies from research centers around the world.

After gaining an understanding of our clients

technology and business needs, we find and assess technologies for our clients.

With the added benefit of licensing professionals, we negotiate agreements on behalf of our clients and offer a variety of flexible terms and transaction models.

A significant component of our global technology licensing division is the performance of services

pursuant to technology acquisition alliance agreements.

Our technology acquisition alliance agreements are designed to help our clients enhance their new product pipeline through the acquisition of proprietary technologies primarily from

universities, medical centers, corporations and federal research laboratories.

Approximately 20% of the Companys revenue in 2008 was from website subscription and other services.

Clients for our website subscriptions include

universities, research centers and primarily large companies across a diversified group of industries.

Clients for our other consulting

services include both private and public sector organizations, representing multiple industry sectors including retail, government, telecommunications, chemicals, media, financial services, energy and utilities.

Competitors for website subscription

services are significant and include:

Nerac, Inc., Thomson S.A., BioPharm Insight, EvaluatePharma and many others.

Competitors for patent

analytic services include:

The Patent Board, Ocean Tomo, LLC, PatentCafé, 1790 Analytics and many other private firms.

significant competitors for global technology licensing that are well developed and include:

A component of our global technology licensing division is our patent analytic service

designed to help our clients create marketplace value from their intellectual property (IP).

We help clients identify the strengths and weaknesses of their own IP as well as that of companies in the same or adjacent

Additionally, by identifying gaps and opportunities in the IP landscape, we assist clients with developing IP acquisition, disposition, and management strategies.

Approximately 30%, 20% and 16% of our revenue in 2009, 2008 and

2007, respectively, was from online subscription and other services.

Clients for our subscription services segment include universities, research centers and primarily large companies across a diversified group of industries.

Clients for our other

services segment include both private and public sector organizations, representing multiple industry sectors including retail, government, telecommunications, chemicals, media, financial services, energy and utilities.

for online licensing services are significant and include:

Reed Elsevier, PharmaVentures, Nerac, Inc., Thomson S.A., BioPharm Insight, EvaluatePharma and many others.

Competitors for global technology licensing that are significant and well

developed include:

IP Group plc, British Technology Group plc, Competitive Technologies, Inc.

and Yet2.com.

In addition, university technology commercialization offices also

provide location specific competition with regard to the intellectual properties, which they have developed and are available for license.

Information about Financial Segments and Geographic Areas

Information concerning sales and segment income attributable to each of the

Companys business segments and geographic areas is set forth in Note 12 of our Notes to Consolidated Financial Statements under Item 8.

Competitors for patent analytic services include:

The Patent Board, Ocean Tomo, LLC, PatentCafé, 1790 Analytics and many other private

In addition, university technology commercialization offices also provide location specific competition with regard to the intellectual properties, which they have developed and are available for license.

We believe the primary factors affecting competition in our market include firm and consultant reputations, client relationships and

experiences, a legacy of successes, referrals and referral sources, the ability to attract and retain top talent, the ability to manage client engagements effectively, responsiveness, and the ability to listen and provide high quality services.

There is competition on price, especially during this last economic downturn.

However, given the critical nature of many of the issues that our services address, we are not typically competing on price alone.

Many of our competitors have greater

mindshare in the market, more high profile personnel and greater financial and marketing resources than we do.

We believe that our experience, our heritage, our reputation (collectively and as previously independent businesses), our focus on

innovation, and our comprehensive approach to our clients innovation challenges enable us to compete favorably and effectively in this marketplace.

Business Development and Marketing

Our business development and marketing

efforts are aimed to develop relationships and build strong awareness and brand reputation with the key economic buyers and influences, specifically;

innovation leaders, business and business unit leaders, research and consumer insights

professionals, R&D leaders, product marketers, brand managers, licensing professionals, industry analysts, academic institutions, legal firms, and others.

We believe strong relationships and a client-driven approach to service are critical to

building and maintaining our business and brand reputation.

We emphasize high quality client service to all of our employees.

We generate new business opportunities through relationships with individuals, through direct sales, cross selling, trade show and conference participation and sponsorship, direct marketing outreach, and our extensive network of contacts.

We have thought leadership programs in action to generate awareness and build brand associations of expertise.

These activities include a quarterly Innovation Index which ranks businesses in a different industry each quarter in terms of their level

of innovation;

an Innovation Update, which is a topical monthly opinion piece;

bi-annual Innovation Leaders rankings;

and book sponsorships, most recently including The Future of Innovation .

Financial Information about Financial Segments and Geographic Areas

Information concerning sales and segment income attributable to each of our product segments and geographic areas is set forth in Note 11 of

our Notes to Consolidated Financial Statements under Item 8.

Financial Statements and Supplementary Data and is incorporated herein by reference.

Recent Developments

Company expanded the range of innovation services it provides through the acquisition of four companies that together offer innovation consulting, foresight research and facilitate the buying and selling of intellectual property for our clients.

In January 2008, we acquired Pharmalicensing Ltd., a leading biopharmaceutical innovation website designed for professionals involved with

partnering, licensing and business development worldwide.

Beginning in 2008, we have acquired and integrated

certain companies in an effort to enhance our ability to provide end-to-end innovation services.

During 2010, we will bring those companies together under a single go-to-market brand strategy, expecting to leverage both market and cost efficiencies

while creating a more comprehensive brand with the large-capitalization companies we increasingly serve.

In January 2008, we acquired Pharmalicensing Limited (Pharmalicensing), a leading biopharmaceutical innovation website designed for

professionals involved with partnering, licensing and business development worldwide.

Actively supporting in- and out-licensing activities, Pharmalicensing provides partnering services, business development reports and industry news.

Pharmalicensing is actively utilized by

over 1,000,000 pharmaceutical and life science industry professionals each year.

In April 2008, we acquired Carmi, Inc., a 100% owned

subsidiary of Strategos, LLC.

Founded in 1995 by a small group of experienced consultants and industry veterans, including management strategist Gary Hamel, the firm focuses on helping clients achieve and sustain industry leadership, develop

innovative growth strategies, identify and bring to market new growth opportunities and build a culture of innovation into their organization.

acquisition of Pharmalicensing, we significantly expanded our online marketplace presence.

We are able to use it as a platform to launch other targeted marketplaces, such as our 2009 launch of the Medical Device Licensing marketplace, and we will

continue to launch market specific verticals in the future.

It is also a substantial online traffic generator and awareness builder for our entire business.

In April 2008, we acquired Carmi, Inc., a 100% owned subsidiary of Strategos, LLC that we refer to as Strategos. Founded in 1995 by a small

group of experienced consultants and industry veterans, including management strategist Gary Hamel, the firm focuses on helping clients achieve and sustain industry leadership, develop innovative growth strategies, identify and bring to market new

growth opportunities and build a culture of innovation into their organization.

Strategos helps companies bring innovation to their core business and organization.

In July 2008, we acquired Innovaro Ltd.

Founded in 2000, Innovaro is headquartered in London (UK) and has

a global client base including both private and public sector organizations.

Innovaro provides consulting and insight support to many organizations, across industry sectors ranging from fast moving consumer goods, retail, government and

telecommunications to chemicals, media, financial services, energy and utilities.

In October 2008, we acquired Social Technologies Group,

Founded in 1999, Social Technologies is headquartered in Washington, D.C.

The acquisition of Strategos lends credibility to our move into Global 1000 list of

clients and prospects, providing us with a thought leadership platform, considerable consulting and management strength and better positions us with the innovation leadership of the Global 1000.

In July 2008, we acquired Innovaro Limited (Innovaro).

Founded in 2000, Innovaro was headquartered in London (UK) and has a global client

base including both private and public sector organizations.

Innovaro provides consulting and insight support to many organizations, across industry sectors ranging from fast moving consumer goods, retail, government and telecommunications to

chemicals, media, financial services, energy and utilities.

The acquisition of Innovaro, like Strategos, lends credibility to our move into Global 1000 list of clients and prospects, extending us geographically into western Europe, providing us with

a thought leadership platform, considerable consulting and management strength and better positions us with the innovation leadership of the Global 1000.

In October 2008, we acquired Social Technologies Group, Inc.

(Social Technologies).

Founded in 1999, Social Technologies is headquartered

in Washington, D.C.

The firm has helped clients across a wide range of industries guide policy, shape business strategy, explore new markets, and develop new products and services.

helps organizations protect against unexpected risks, spot opportunities before competitors do, and ultimately better prepare for the future from a far more informed, empowered perspective.

As of February 13, 2009, we had 115

We believe our relations with our employees are good.

The firm helps organizations protect against unexpected risks, spot

opportunities before competitors do, and ultimately better prepare for the future from a far more informed, empowered perspective.

The acquisition of Social Technologies enhances our service offerings to the research and insights professionals in

the Global 1000 and beyond, a critical role in an organizations innovation development.

strategy has evolved significantly since our inception.

Starting as a company in 1997, we focused solely on working with the technology transfer offices at universities.

We now also serve mid- and large-cap organizations who are increasingly seeking

the technologies our university partners have developed.

We have aligned our management structure to maximize the benefit gained from the talented executives within

We have hired experienced professionals from a variety of leading organizations.

We have added executives and functions to progress us in our mission, including a VP of Marketing.

have gone from being a sole office in Tampa, FL, our current headquarters, to also having offices in Chicago, IL, Washington, D.C.

and York, England.

As of March 16, 2010, we began doing business as Innovaro and changed our ticker symbol to NYSE Amex:

Our proxy statement for the 2010 Annual Meeting of Shareholders will include a proposal to

amend our articles of incorporation to change the corporate name to Innovaro, Inc.

Beginning in March 2010, the Company will reorganize into three primary business groups, all working under the Innovaro brand:

Strategic Servicesdriven by

Strategos, an advanced innovation consultancy;

Technology Marketplacesonline platforms, partnering services, global licensing and technology transfer services;

Insights & Researchfutures and trends, research, information

services and more.

In connection therewith, our business segments will change beginning with our quarterly reporting period ending March 31, 2010 and this change will require certain reclassifications to prior period financial information.

Scientific Advisory Council

The principal purpose of our Scientific Advisory Council is to assist our management in the evaluation of new technologies for our clients.

Our Scientific

Advisory Council is comprised of more than 40 experts in a broad range of scientific, medical and engineering disciplines.

Investments and Portfolio

Historically, we received equity securities from clients as payment in connection with most of our technology transfers.

Because our receipt of such securities is equivalent to an investment by us in such clients, we refer to such securities as investments and the clients in which we hold such investments as portfolio companies. It is our plan

that the securities we received in connection with our technology transfers will, in the course of our business, be sold for cash or other assets.

We have elected to be regulated as a BDC under the 1940 Act.

Pursuant to the 1940 Act, a BDC must be organized in

the United States for the purpose of investing in or lending to private or thinly traded public companies and making managerial assistance available to them.

A BDC may use capital provided by public shareholders and from other sources to make

long-term, private investments in businesses.

As a BDC, we may not acquire any asset other than qualifying assets unless at

the time we make the acquisition, the value of our qualifying assets represent at least 70% of the value of our total assets.

The principal categories of qualifying assets relevant to our business are:

Securities in an eligible portfolio company that are purchased in transactions not involving any public offering.

An eligible portfolio company is defined under the

1940 Act to include any issuer that:

is organized and has its principal place of business in the U.S.;

is not an investment company or a company operating pursuant to certain exemptions under the 1940 Act, other than a small business investment company wholly owned

does not have any class of securities listed on a national securities exchange or has a class of securities listed on a national securities exchange but has an

aggregate market value of outstanding voting and non-voting common equity of less than $250 million;

Securities received in exchange for or distributed with respect to securities described in the bullet above or pursuant to the exercise of options, warrants, or

rights relating to those securities;

Cash, cash items, government securities, or high quality debt securities (as defined in the 1940 Act), maturing in one year or less from the time of investment.

To include certain securities described above as qualifying assets for the purpose of the 70% test, a

business development company must offer to make available to the issuer of those securities significant managerial assistance such as providing guidance and counsel concerning the management, operations, or business objectives and policies of a

portfolio company.

Within our field of expertise, we offer to provide managerial assistance to each of our portfolio companies.

we are required to meet a coverage ratio of the value of total assets to total senior securities, which include all of our borrowings and any preferred stock we may issue in the future, of at least 200%.

We may also be prohibited under the 1940 Act

from knowingly participating in certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, prior approval by the SEC.

Except as described below or otherwise permitted by the 1940 Act, we are not able to issue and sell our common stock at a price below our net asset value

We may, however, sell our common stock, warrants, options or rights to acquire our common stock, at a price below the net asset value of the common stock if our Board of Directors determines that such sale is in our best interests and

that of our stockholders, and our stockholders approve such sale.

In any such case, the price at which our securities are to be issued and sold may not be less than a price which, in the determination of our Board of Directors, closely approximates

the market value of such securities (less any distributing commission or discount).

We may also make rights offerings to our stockholders at prices per share less than the net asset value per share, subject to applicable requirements of the 1940

The 1940 Act prohibits us from acquiring (i) more than 3% of the total outstanding shares of another investment company;

(ii) shares of another investment company having an aggregate value in excess of 5% of the value of our total assets;

or (iii) shares of another registered investment company and all other investment companies having an aggregate value in

excess of 10% of the value of our total assets.

Our Board of Directors has appointed a chief compliance officer pursuant to the

requirements of the 1940 Act.

We are periodically examined by the SEC for compliance with the 1940 Act.

As with other companies

regulated by the 1940 Act, a BDC must adhere to certain substantive regulatory requirements.

A majority of our directors must be persons who are not interested persons, as that term is defined in the 1940 Act.

Additionally, we are required to

provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement.

Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to our company or our

stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such persons office.

As required by the 1940 Act, we maintain a code of ethics that establishes procedures for personal investment and restricts certain transactions by our personnel.

Personnel subject to the code of ethics may invest in

securities for their personal investment accounts, so long as such investments are made in accordance with the codes requirements.

We may not change the nature of our business so as to cease to be, or withdraw our election as a BDC unless authorized by vote of a majority of the outstanding voting securities, as defined in the 1940 Act.

Income Tax Matters

For federal and state income tax

purposes, we are taxed at regular corporate rates on ordinary income and recognize gains on distributions of appreciated property.

We are not entitled to the special tax treatment available to BDCs that elect to be treated as regulated investment

companies under the Internal Revenue Code because, among other reasons, we do not distribute at least 90% of investment company taxable income as required by

the Internal Revenue Code for such treatment.

Distributions of cash or property by us to our stockholders, if any, will be taxable as dividends only to the

extent that we have current or accumulated earnings and profits.

Distributions in excess of current or accumulated earnings and profits will be treated first as a return of capital to the extent of the holders tax basis and then as gain from

the sale or exchange of property.

Determination of Net Asset Value

Quarterly Net Asset Value Determination

We determine the net asset value per share of our

common stock quarterly.

We disclose these net asset values in the periodic reports we file with the SEC.

The net asset value per share of our common stock is equal to the value of our total assets minus total liabilities divided by the total number

of shares of common stock outstanding.

At December 31, 2008, approximately 26% of our total assets were in investments recorded at

Value, as defined in Section 2(a)(41) of the 1940 Act, is (i) the market price for those securities for which a market quotation is readily available and (ii) for all other securities and assets, fair value as determined

in good faith by our Board of Directors.

Since there is typically no readily available market value for the investments in our portfolio, we value substantially all of our investments at fair value as determined in good faith by the Board of

In making its determination, our Board of Directors considers valuation appraisals provided by independent valuation service providers.

Because of the inherent uncertainty of determining the fair value of investments that do not have a

readily available market value, the fair value of our investments determined in good faith by our Board of Directors may differ significantly from the values that would have been used had a ready market existed for the investments, and the

differences could be material.

There is no single standard for determining fair value in good faith.

As a result, determining fair value

requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we hold.

We will record unrealized depreciation on

investments when we believe that an investment has become impaired, including where realization of an equity security is doubtful.

Conversely, we will record unrealized appreciation if we have an indication that the underlying company has

appreciated in value and, therefore, our equity security has also appreciated in value, where appropriate.

With respect to equity

securities in private companies, each investment is valued using industry valuation benchmarks, and then the value is assigned a discount reflecting the illiquid nature of the investment, as well as our minority, non-control position.

external event such as a purchase transaction, public offering, or subsequent equity sale occurs, the pricing indicated by the external event is used to corroborate our valuation.

Equity securities in public companies that carry certain restrictions

on sale are generally valued at a discount from the public market value of the securities.

The Board of Directors bases its determination

upon, among other things, applicable quantitative and qualitative factors.

These factors may include, but are not limited to, type of securities, nature of business, marketability, market price of unrestricted securities of the same issue (if any),

comparative valuation of securities of publicly-traded companies in the same or similar industries, current financial conditions and operating results, sales and earnings growth, operating revenues, competitive conditions and current and prospective

conditions in the overall stock market.

We have retained an independent valuation service provider, Klaris, Thomson & Schroeder,

Inc., to supply us with quarterly valuations on our entire portfolio of investments.

Our Board of Directors uses these valuations to aid in its determination of the fair value of our investments.

Our Board of Directors retains its responsibility for

determining the fair value of our portfolio of investments.

Determinations in Connection with Offerings

In connection with each offering of shares of our common stock, our Board of Directors or a committee thereof is required to make the determination that

we are not selling shares of our common stock at a price below the then current net asset value of our common stock at the time at which the sale is made.

Our Board of Directors considers the following factors, among others, in making such

determination:

the net asset value of our common stock disclosed in the most recent periodic report we filed with the SEC;

our managements assessment of whether any material change in the net asset value of our common stock has occurred (including through the realization of gains

on the sale of our portfolio securities) from the period beginning on the date of the most recently disclosed net asset value of our common stock to the period ending two days prior to the date of the sale of our common stock;

the magnitude of the difference between the net asset value of our common stock disclosed in the most recent periodic report we filed with the SEC and our

managements assessment of any material change in the net asset value of our common stock since the date of the most recently disclosed net asset value of our common stock in the proposed offering.

Importantly, this determination does not require that we calculate the net asset value of our common stock in connection with each offering of shares of

our common stock, but instead it involves the determination by our Board of Directors or a committee thereof that we are not selling shares of our common stock at a price below the then current net asset value of our common stock at the time at

which the sale is made.

Moreover, to the extent that there is even a remote possibility that we may (i) issue shares of our common

stock at a price below the then current net asset value of our common stock at the time at which the sale is made or (ii) trigger the undertaking (which we are required to provide in certain registration statements we may file from time to time

with the SEC) to suspend the offering of shares of our common stock if the net asset value of our common stock fluctuates by certain amounts in certain circumstances until the prospectus relating to such offering is amended, our Board of Directors

will elect, in the case of clause (i) above, either to postpone the offering until such time that there is no longer the possibility of the occurrence of such event or to undertake to determine the net asset value of our common stock within two

days prior to any such sale to ensure that such sale will not be below our then current net asset value, and, in the case of clause (ii) above, to comply with such undertaking or to undertake to determine the net asset value of our common stock

to ensure that such undertaking has not been triggered.

These processes and procedures are part of our compliance policies and procedures.

Records will be made contemporaneously with all determinations described in this section, and these records will be maintained with other records we are required to maintain under the 1940 Act.

Our Scientific Advisory Council is comprised of more than 40 experts in a broad range of scientific, medical and engineering disciplines.

Our Scientific Advisory Council assists our management in the

evaluation of new technologies for our clients.

As of March 16, 2010, we had 61 employees.

We believe our relations with our employees are good.

Corporate Offices and Available Information

executive offices are located at 2109 Palm Avenue, Tampa, Florida 33605 and our telephone number is (813) 754-4330.

We also have offices in Illinois, Washington D.C., Pennsylvania, and the United Kingdom.

Our Internet address is www.utekcorp.com .

We make available free of charge through our website our annual report on Form 10-K, quarterly reports

on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Information contained on our website is not incorporated by

reference into this annual report on Form 10-K, and you should not consider information contained on our website to be part of this annual report on Form 10-K.

Our executive offices are located at 2109 Palm Avenue, Tampa, Florida 33605 and our telephone number is (813) 754-4330.

We also have offices in Illinois, Washington D.C.

and the United Kingdom.

Our Internet address is www.innovaro.com .

We make available free of charge through our website our annual report on

Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Information contained on our website

is not incorporated by reference into this annual report on Form 10-K, and you should not consider information contained on our website to be part of this annual report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business