What changed in this filing

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Item 1. Business

2011-03-30 compared with 2010-03-22 · 193 added, 230 removed, 24 unchanged (95% of the section changed)

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.

and Carmi, Inc.

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

Unless the context requires otherwise, reference in this Form 10-K to Innovaro, the Company, we, us and words of similar import refer to Innovaro, Inc.

and its wholly owned subsidiaries, Innovaro Europe, Ltd.

(Europe) and UTEK Real Estate Holdings, Inc.

(UTEK Real Estate).

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.

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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

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;

Create and act on game-changing strategies;

Build an enterprise-wide capability for innovation;

Accelerate and improve new product development processes;

Assess a companys innovation capability.

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 and forward.

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

intellectual property (IP) and gain foresight into marketplace and technology developments that affect their business.

These services are provided internationally from our offices in the United States and the United Kingdom.

In the first quarter of 2010, we began development of an innovation management software

platform designed to enhance and complement our innovation service offerings to our clients.

The purpose of the innovation management software platform is to enable our clients to access, apply and extract value from a proven innovation approach

through an on-demand software application.

Management has begun testing and marketing of the software platform in 2011.

The release to general availability of phase one of the software is dependent on the results of our testing, but is tentatively

scheduled for the end of the second quarter of 2011.

During the first quarter of 2011, phase one of the software will have reached technological feasibility and additional costs will be capitalized.

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

2010, we formally changed our name to Innovaro, Inc. We have reorganized into two new lines of business, all working under the Innovaro brand:

Strategic Servicesdriven by Strategos, an advanced innovation consultancy, and

Technology Servicesonline platforms, partnering services, global licensing, technology transfer services, futures trends, research and information services and IP consulting.

Business Strategy

Innovaro has evolved from a technology transfer firm,

organized as a BDC, into an operating company.

We have shifted the focus of the business to become an innovation services business.

We provide innovation consulting services, IP licensing, technology acquisition and partnering and trends analysis.

During the course of 2010, Innovaro recognized the opportunity to develop a new innovation management software platform with

the intent to bring the product to market beginning in 2011.

Innovaro envisions the continued evolution of its business to include the development and sale of software products such as the innovation management software platform to support its

innovation services business.

Over time, we expect the software product component of our business to grow at a greater rate

than the growth in our other business segments and we feel it will represent an important component of our overall revenue stream.

As the innovation management software capability matures, we expect to evolve into an innovation solutions company which will include all of our current services as well as the software platform to

form the basis of an innovation engine .

This innovation engine will allow us to more broadly engage clients depending on their requirements, whether people, software or data across their innovation cycle.

A key component of our strategy is to embrace both software and information offerings from other firms through an open innovation

Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.

Using this approach, our clients

will be able to incorporate our offerings to suit their requirements to most effectively drive innovation.

Operating Segments

We currently have strategically aligned our business into two reportable segments:

Strategic Services and Technology

Strategic Services Segment Overview

Our clients require strategies to help them embrace improved innovation capabilities.

We apply innovation insights;

build those strategies with supporting infrastructure, processes and 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 services to enable our clients to become more efficient by finding new

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

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

professionals capable of unlocking an organizations capacity by:

Identifying and developing new segments and markets;

Creating and acting on game-changing strategies;

Building an enterprise-wide capability for innovation;

Accelerating and improving new product development processes;

Assessing a companys innovation capability.

Approximately 75% and 63% of our revenue in 2010 and 2009,

respectively, was from strategic 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.

Strategic services had two significant clients for the year ended December 31, 2010 and one significant client for the year ended

December 31, 2009, which accounted for 28% and 10% of the total revenue, respectively.

The strategic services 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.

for strategic services.

Technology Services Segment Overview

Whether partnering or licensing, our clients need exposure to the broadest and most relevant communities to identify needs, fulfill technology demands, and take technology development forward and into the

We offer expansive networks, experts in scouting, partner sourcing and licensing expertise, and a world leading online marketplace.

An important aspect of licensing is understanding the true potential value of the intellectual property

We assess that value by building a roadmap for our clients to use to uncover opportunities and options to realize latent value.

Our clients require intelligence applied to their markets in order to have confidence in deploying their development capital.

From current market research to predictive intelligence, we help clients

determine the factors impacting or that will likely impact their business including social, geopolitical, competitive, economic, environmental and technological factors.

Online Marketplaces

Innovaro Pharmalicensing is a biopharmaceutical

innovation resource designed for life science professionals driving partnering, licensing and business development worldwide.

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

partnering services, business development reports, industry news and a jobs source for candidates and employers.

We are tracking at approximately 200,000 unique visitors per month and developing partnerships with external search partners to further

drive traffic.

Knowledge Express is an online, information service built for those who need it mostbusiness

development, technology transfer and marketing professionals across technology industries.

It is a premier

business development resource with expert IP search capabilities and report generation functionality.

Our service includes access to key corporate profiles, industry contacts, technology

pipelines, investigational technologies, deal information, sales data and patent data.

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.

Global Technology Licensing

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

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

Foresight and Trend Research

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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 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

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.

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

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

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 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

We 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, including:

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

Futures Observatory a membership service that provides 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 a customizable, web-based knowledge management tool that gathers and organizes information from across a client in one,

intuitive platform.

IP Consulting

We also offer IP Consulting to deliver value through the identification of intellectual property opportunities and execution of IP optimization and exploitation strategies for clients in a wide range of

Our approach is designed to help our clients determine market viability, product viability and buyer viability and determine the best means to maximize the value from commercially available assets.

Our IP analysis, coupled with collaborative planning and execution, delivers focused results.

Because our model is science-based, the

result has a greater probability of high value realization.

Strategies we employ are directly proportional to the return on IP investment and our holistic IP value consists of several phases in order to determine the right IP for our

clientsone that employs strategies designed to deliver the desired business goals.

Approximately 25% and 36% of our revenue in 2010 and 2009, respectively, was from technology services.

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

representing a wide range of industries.

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

Clients for our other services within the technology

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:

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

and many other firms.

Competitors for online marketplace 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.

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.

Competitors for IP consulting services include:

The Patent Board, Ocean Tomo, LLC, PatentCafé, 1790

Analytics and many other private firms and Forrester Research, Inc.

and Gartner, Inc.

for foresight and trend research.

In addition, university technology commercialization offices also provide location specific competition with regard to the

licensing of IP technology that they have developed.

We believe the primary factors affecting competition in our markets

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, as evidenced by the price competition we experienced during the recent severe 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 a greater share of the markets in which we operate, more high profile personnel and greater financial and marketing resources than we do.

believe that our experience, 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.

Research and Development

Currently, our research and development activities are related to the continuing development of an innovation management software platform.

In fiscal 2010 and fiscal 2009, our research and development

expenses were $1.2 million and $0, respectively.

Our research and development expenses consist primarily of personnel and related expenses, including payroll and employee benefits, expenses for facilities and payments made to outside software

development contractors and, to a lesser degree, depreciation of capital equipment.

We estimate that we have spent approximately 17,000 hours on research and development activities during 2010.

The software platform has not reached technological

feasibility as of December 31, 2010 and accordingly all related costs have been expensed in 2010.

Intellectual Property

We consider our products as proprietary.

We attempt to protect our proprietary technology by relying primarily on a combination of

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.

Our business development and marketing efforts are aimed at developing relationships and building strong awareness and

brand reputation with the key economic buyers, 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, law firms, and others.

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

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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;

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 hold ongoing thought leadership programs to generate awareness and build brand recognition.

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.

and book sponsorships.

Financial Information about Financial Reporting Segments and Geographic Areas

Information concerning revenue and segment income attributable to each of our financial reporting segments and geographic areas is set

forth in Note 18 of our Notes to Consolidated Financial Statements under Item 8.

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

Recent Developments

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.

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.

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.

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.

The following developments that occurred during the

year ended December 31, 2010 are considered to be significant to our business:

We raised gross proceeds of approximately $3.8 million before advisory fees and offering expenses in connection with a registered offering of our

common stock;

We began development of our innovation software management platform, for which we have subsequently begun testing and marketing in 2011;

Our Chief Executive Officer, Douglas Schaedler, resigned from his position as CEO and member of the Board of Directors.

The Board of Directors

appointed Mr.

Asa Lanum as Interim Chief Executive Officer;

We recorded impairment losses of $11.8 million related to goodwill, intangible assets and fixed assets;

We recognized $1.6 million in losses on investments;

We significantly decreased our operating costs, which we expect will have an impact on 2011 operating results.

Costs and Effects of Compliance with Environmental Laws and Regulations

We are not in a business that involves the use of materials in a manufacturing stage where such materials are likely to result in the violation of any existing environmental rules and/or

Therefore, we do not anticipate that there will be any substantial costs associated with complying with environmental laws and regulations.

Scientific Advisory Council

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.

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.

March 17, 2011, we had 39 full-time employees.

We believe our relations with our employees are good.

1 unchanged sentence

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.

offices in Illinois, Washington D.C., California 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