1098482--2/15/2006--UTEK

related topics

{loan, real, estate}

{product, candidate, development}

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{investment, property, distribution}

{stock, price, share}

{acquisition, growth, future}

{property, intellectual, protect}

{tax, income, asset}

{personnel, key, retain}

{cost, contract, operation}

{operation, international, foreign}

{regulation, government, change}

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Our investment portfolio is highly concentrated and, as a result, our financial results are largely dependent upon the performance of certain significant investments. Our quarterly and annual results could fluctuate significantly. Our investment model is highly speculative in nature. Our portfolio companies are development stage companies dependent upon the successful commercialization of new technologies. Each of our investments in portfolio companies is subject to a high degree of risk, and we may lose all of our investment in a portfolio company if it is not successful. Our portfolio companies depend upon the research and development activities of universities, medical research centers and federal research laboratories, over which neither our portfolio companies nor we have any control. Technologies acquired by our portfolio companies may become obsolete before we can sell their securities. The patents on the technologies that our portfolio companies license may infringe upon the rights of others, and patent applications that have been submitted may not be granted. If our primary investments are deemed not to be qualifying assets, we could be precluded from investing in the manner described in this Annual Report on Form 10-K or deemed to be in violation of the 1940 Act. Technologies that have been developed with funding from the U.S. government may have limits on their use, which could affect the value of the technology to a portfolio company. We may be unable or decide not to make additional cash investments in our portfolio companies which could result in our losing our initial investment if the portfolio company fails. The securities we hold in our portfolio companies are subject to restriction on resale, and we may not be able to sell the securities we hold for amounts equal to their recorded value, if at all. We are dependent on sales transactions, structured as tax-free exchanges, to sell the new companies we form to acquire new technologies. A change in the Internal Revenue Code affecting tax-free exchanges could reduce our ability to sell such companies. The agreements we have with universities, medical research centers and federal research laboratories do not guarantee that such entities will grant licenses to us or other companies. We are dependent upon our management s ability to identify portfolio companies to acquire the new companies we form to acquire new technologies. We are dependent upon and have little or no control over the efforts of portfolio companies to successfully commercialize the acquired technologies or to retain the licenses to such technologies. Our investments in our portfolio companies may be concentrated in one or more industries, and if these industries should decline or fail to develop as expected our investments will be lost. Substantially all of our portfolio investments are recorded at fair value as determined in good faith by our board of directors, and as a result, there is uncertainty regarding the value of our portfolio investments. Our business depends on key personnel. We have a limited amount of funds available for investment in portfolio companies, and as a result, our investments will lack diversification. If our portfolio companies fail to comply with the requirements of the forum in which their securities are quoted or the trading market on which their securities are listed, the liquidity and prices of our investments would be materially adversely affected. Changes in the law or regulations that govern us could have a material impact on our operations. We are subject to certain risks associated with our foreign operations and investments. One of our current stockholders has significant influence over our management and affairs. We may need additional capital in the future, and it may not be available on acceptable terms. Regulations governing our operation as a business development company will affect our ability to, and the way in which we, raise additional capital. Our common stock price may be volatile.

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1098482--2/15/2006--UTEK_CORP