UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-QSB  (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2006  [   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ____________ to ________________  Commission file number 000-30239   UNICO, INCORPORATED(Exact name of small business issuer as specified in its charter)  Arizona86-0205130(State or other jurisdiction of incorporation or organization)(I.R.S. Employer
Identification No.)  8880 Rio San Diego Drive, 8th Floor, San Diego, California 92108 (Address of principal executive offices)  (619) 209-6124 (Issuer's telephone number)  N/A (Former Name, former address and former fiscal year, if changed since last report)  Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ]  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [   ] No [X]   APPLICABLE ONLY TO CORPORATE ISSUERS  State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  As of October 12, 2006, the issuer had outstanding 182,411,108 shares of its common stock, $0.001 par value per share.  Transitional Small Business Disclosure Format Yes [  ]  No [ X  ]  Unless otherwise indicated, the information in this quarterly report on Form 10-QSB gives effect to the 1-for-100 reverse stock split of Unico, Incorporateds common stock, par value $0.001 per share (the Common Stock) effected on August 11, 2006.       PART I - FINANCIAL INFORMATION   Item 1. Financial Statements.       UNICO, INCORPORATED AND SUBSIDIARIES FINANCIAL STATEMENTS  AUGUST 31, 2006       2   UNICO, INCORPORATEDConsolidatedBalance SheetASSETSAugust 31,2006(Unaudited)Current AssetsCash$203,390Total Current Assets203,390Fixed assets, net of depreciation (Note 1)733,054Construction in progress561,657Total Fixed Assets1,294,711Other AssetsCash- reclamation bonds180,703Deposit5,460Total Other Assets186,163Total Assets$1,684,264LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Current LiabilitiesAccounts Payable$268,616Accrued Expenses175,765Reclamation obligations50,284Accrued interest payable170,999Accrued interest payable - related party
(Note 3)51,003Derivative Liability4,734,997Debentures payable, net of discount (Note 2)1,755,916Debentures payable-related party (Note 3)675,774Total Current Liabilities7,883,354Total Liabilities7,883,354Stockholders' EquityPreferred Stock, authorized 20,000,000 shares, $0.001 Par Value, 9,800,000 shares issued and outstanding9,800Common Stock,  authorized 5,000,000,000 shares, $0.001 Par Value, 75,752,799 shares issued and outstanding75,753Additional Paid in Capital30,299,856Accumulated Deficit(36,584,499)Total Stockholders' Equity (Deficit)(6,199,090)Total Liabilities and Stockholders' Equity
                     (Deficit)$1,684,264The accompanying notes are an integral part of these consolidated financial statements.  3   UNICO, INCORPORATEDConsolidatedStatements of Operations(Unaudited)For the Six Months Ended
August 31,For the Three Months Ended
August 31,2006200520062005Total Revenues$-$-$-$-Operating ExpensesDrilling, exploration and maintenance
   expense148,881265,29167,04429,823Depreciation and accretion60,13757,08830,22928,346Professional fees93,40422,00433,6992,326Salaries/Wages171,938193,49569,14778,832General and administrative expense347,059179,537159,22358,137Total Operating Expenses821,419717,415359,342197,464Net Operating (Loss)(821,419)(717,415)(359,342)(197,464)Other Income (Expense)Interest expense(1,663,804)(718,079)(974,887)(214,592)Interest income1,6083001,608-Derivative gain (loss) on debentures(537,551)491,585(204,026)149,665Other income-21,088-1,702Loss on settlement of debt(7,011,837)-(1,818,977)-Total Other Income (Expense)(9,211,584)(205,106)(2,996,282)(63,225)LOSS FROM CONTINUING OPERATIONS(10,033,003)(922,521)(3,355,624)(260,689)Income Tax Expense----Net (Loss)$(10,033,003)$(922,521)(3,355,624)$(260,689)Net (Loss) Per Share$(0.25)$(0.19)(0.07)$(0.05)Weighted Average Shares Outstanding40,512,3494,984,27951,628,0644,984,279The accompanying notes are an integral part of these consolidated financial statements.   4


UNICO,  INCORPORATEDStatements of Stockholders' Equity (Deficit)AdditionalRetainedPreferred StockCommon StockPaid-inEarningsSharesAmountSharesAmountCapital(Deficit)Balance, February 28, 20069,800,000$          9,8006,722,636$            6,723$     21,128,763$   (26,551,496)S8 Stock issued for legal expenses--100,00010017,400-Stock issued for conversion of debentures during period ending May 31, 2006--42,518,32942,5186,115,341-Stock issued for conversion of debentures during period ending August 31, 2006--26,411,83426,412184,790-Derivative portion of convertible debentures----2,853,562-Net Gain (Loss)  for period ended August 31, 2006(unaudited)-----(10,033,003)Balance, August 31, 2006(unaudited)9,800,000$        9,80075,752,799$       75,753$   30,299,856$ (36,584,499)The accompanying notes are an integral part of these consolidated financial statements. 5


UNICO, INCORPORATED
Consolidated
Statements of Cash Flows
(Unaudited)For the Six Months Ending
August 31,20062005Cash Flows from Operating Activities:Net Loss$(10,033,003)$(922,521)Adjustments to Reconcile Net Loss to Net Cash Provided by Operations:Depreciation and accretion expense60,13657,088Interest expense on debentures (FAS 84)8,554,004-Derivative expense related to convertible
  debentures537,551(2,082)Common Stock issued for services17,500-Changes in Operating Assets and Liabilities:(Increase) Decrease in:Reclamation deposit(1,388)(1,182)Increase (Decrease) in:Accrued expenses(407,745)277,048Accounts Payable and other liabilities(207,213)116,914Net Cash Used by Operating  Activities(1,480,158)(474,735)Cash Flows from Investing Activities:Purchase of Fixed Assets(670,960)198Net Cash Provided (Used) by Investing  Activities(670,960)198Cash Flows from Financing Activities:Proceeds from stock payable-110,000Issuance of convertible debentures2,325,000318,856Net Cash Provided by Financing Activities2,325,000428,856Increase in Cash173,882(45,681)Cash at Beginning of Period29,50838,379Cash at End of Period$203,390$(7,302)Cash Paid For:Interest$-$-Income Taxes$-$-Non-Cash Financing Activities:Common stock issued for services$17,500$-Common Stock issued for debt
   extinguishments$1,032,500$-The accompanying notes are an integral part of these consolidated financial statements.  6   UNICO, INCORPORATED Notes to the Consolidated Financial Statements August 31, 2006 and August 31, 2005  NOTE 1  NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING PRINCIPLES This summary of significant accounting policies of Unico, Incorporated is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements.  These financial statements should be read in conjunction with the Companys Form 10-KSB for the year ended February 28, 2006. a. Organization and Business Activities  Unico Incorporated operated as a business development company (BDC) as defined by the Investment Company Act of 1940 from July 12, 2004 until withdrawing its BDC election in October 2005.  The decision to withdraw the BDC election was made in consideration for the Companys change in operating strategy away from individual investments towards more fully developing the mining operations already acquired.  The Company received shareholder approval for withdrawing the BDC election on October 11, 2005 and filed Form N-54C, which formally withdrew its BDC election, on October 12, 2005.  The Company presently has three wholly-owned subsidiaries: Deer Trail Mining Company, LLC, Silver Bell Mining Company, Inc., and Bromide Basin Mining Company, LLC.  While the Company reported under the Investment Company Act as a Business Development Company, the operations of these entities were not consolidated but, rather, were treated as investments and were carried on the Companys books at their fair market value.  As a result of the Companys withdrawal as a BDC, the equity method of accounting is now appropriate.  The accompanying consolidated financial statements are therefore those of the Company and its wholly owned subsidiaries, Deer Trail Mining Company, LLC, Silver Bell Mining Company, Inc. and Bromide Basin Mining Company, LLC.  b. Fixed Assets  Fixed assets are depreciated on a straight-line basis over five years.  Fixed assets are recorded at cost. Major additions and improvement are capitalized on a percentage of completion basis. The cost and related accumulated depreciation of equipment retired or sold are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale are recorded as gain or loss on sale of assets.  Equipment Schedule2006Office/ computers$2,352Equipment1,168,494Land200,000Autos54,923Construction in progress561,657Total$1,987,426Less Depreciation(692,715)Net Equipment$1,294,711   7    c. Accounting for Derivatives  Convertible debentures, the Companys sole derivative instruments, are accounted for under EITF 00-27 unless liability classification of the derivative is more appropriate.  Where the embedded conversion option appears to qualify for liability classification, derivatives are accounted for under EITF 00-19.  Under EITF 00-27, the Company records a beneficial conversion cost associated with the convertibility feature of the security that equals the value of any discount to market available at the time of conversion.  This beneficial conversion cost is recorded at the time the convertible security is first issued.  If the debenture is subsequently converted into stock, the liability is reduced and common stock is increased.  EITF 00-19 is applicable to debentures issued by the Company in instances where the number of shares into which a debenture can be converted is not fixed.  For example, when a debentures converts at a discount to market based on the stock price on the date of conversion.  In such instances, EITF 00-19 requires that the embedded conversion option of the convertible debentures be bifurcated from the host contract and recorded at its fair value.   In accounting for derivatives under EITF 00-19, the Company records a liability representing the estimated present value of the conversion feature considering the historic volatility of the Companys stock, and a discount representing the imputed interest associated with the beneficial conversion feature.  The discount is then amortized over the life of the debentures and the derivative liability is adjusted periodically according to stock price fluctuations.  At the time of conversion, any remaining derivative liability is charged to additional paid-in capital.  For purposes of determining derivative liability, the Company uses Black-Scholes modeling for computing historic volatility.  d. Change In Accounting Practices  Withdrawal as a Business Development Company  On July 12, 2004, Unico filed an election with the U.S. Securities and Exchange Commission to become a business development company pursuant to Section 54 of the Investment Company Act of 1940.  On August 1, 2005, the Board of Directors unanimously approved the proposal to withdraw the Companys election to be treated as a business development company (BDC) as soon as practicable so that it could begin conducting business as an operating company rather than as a business development company subject to the Investment Company Act.  On October 11, 2005, the holders of a majority of the outstanding shares of the Companys common stock approved the proposal to withdraw the Companys election to be treated as a BDC, and on October 12, 2005, a Notification of Withdrawal was filed with the Securities and Exchange Commission.  The change in the Companys status eliminates the Companys ability to utilize the fair value method of accounting for subsidiaries that is required of investment companies.  Significant change in method of accounting  The election to withdraw the Companys election as a BDC under the Investment Company Act has resulted in a significant change in the Companys required method of accounting. Investment Company financial statement presentation and accounting utilizes the fair value method of accounting for recording ownership in portfolio or subsidiary companies.  This treatment requires that BDCs value their investments at market value as opposed to historical cost.  With the Companys withdrawal from the Investment Company Act, the required financial statement presentation and accounting for securities held will be either the equity method or historical cost method of accounting, depending on the classification of the investment and the Companys ownership percentage.  Effect  As an operating company, the Company must consolidate its financial statements with subsidiaries, thus eliminating the portfolio company reporting benefits available to BDCs. As a result, in accordance with FAS 154, the accompanying financial statements have been presented on an operating and consolidated basis for all periods presented on a retrospective basis.  The effect to the statement of operations for the prior period based on the consolidated comparison are as follows:  8    The statement of operations for the quarter ended August 31, 2005 has been adjusted to include the subsidiaries of Deer Trail, Silver Bell and Bromide which were included only as portfolio companies carried at their fair market value in the August 31, 2005 quarterly report previously filed.  As a result of consolidating these entities, operating expenses increased by $390,566, interest expense increased $329,167 and the unrealized loss on investments of $111,812 was eliminated.  Combined, these changes along with a gain on derivatives of $491,585 resulted in the net loss for the quarter ended August 31, 2005 increasing from $880,975 to $886,521.  Changes in reporting  Operating expenses have been further broken down to highlight and clarify additional expenses in then current reporting period and have been reclassified in prior periods to conform with this reporting format.  NOTE 2   CONVERTIBLE DEBENTURES  During the quarter ended August 31, 2006, the Company issued $700,000 of convertible debentures that were used primarily to support subsidiary operations.  The debentures were issued with terms of 180 days, accrued interest at 8% per annum, and converted at a discount of 50% of the closing bid for the Companys common stock on the date of conversion.  The Company also had $2,905,774 in debentures issued and outstanding from prior quarters.  During the quarter ended August 31, 2006, the Company converted $107,500 of convertible debentures and issued 25,511,834 post-reverse split shares of free-trading common stock under a court ordered settlement (See Note 4).   The issuance of stock in settlement of the debenture resulted in an expense of $1,818,977, which represented the difference between the value of the stock issued and the amount of note converted.  As of August 31, 2006, the Company had $3,498,274 in convertible debentures issued and outstanding before the discount.  The issuance of the convertible debentures under the terms specified result in the number of shares to be issued upon conversion being indeterminate. EITF 00-19 requires that for such debentures, the embedded conversion option of the convertible debentures be bifurcated from the host contract and recorded at its fair value.   In accounting for derivatives under EITF 00-19, the Company records a liability representing the estimated present value of the conversion feature considering the historic volatility of the Companys stock, and a discount representing the imputed interest associated with the beneficial conversion feature.  The discount is then amortized over the life of the debentures and the derivative liability is adjusted periodically according to stock price fluctuations.  In applying EITF 00-19 for the quarter ended August 31, 2006, the Company recorded a loss of $204,026 on the derivative portion of the debentures and a discount of $1,066,584 on the debentures.  NOTE 3  RELATED PARTY TRANSACTIONS  During 2004, the Company executed convertible debentures with Ray C. Brown, Director and former Chief Executive Officer, and Wayne Hartle, Secretary, for $675,774.  These debentures bear interest at the rate of 10% per annum, convert at a discount of 80% of closing bid price on the date of conversion, and are now due and payable though demand for payment has not been made.  The Company has recorded the debentures as current liabilities and has accrued interest on those debentures of $25,461 as of August 31, 2006.  During the quarter ended August 31, 2006, the Company issued 900,000 shares of restricted common stock to Ray Brown for payment of $47,680 of interest due on convertible debentures. Accrued interest-related party was decreased as a result.   NOTE 4  COMMON STOCK Effective August 11, 2006, the Companys common stock underwent a 1 for 100 reverse stock split.  As a result, the number of outstanding shares of the Companys common stock as of August 11, 2006 decreased from approximately 4,954,096,450 pre-reverse split shares to 49,540,965 post-reverse split shares.  Share figures appearing in this report are generally expressed in numbers of post-reverse split shares, unless otherwise noted.  9    As of August 31, 2006, the Company had 75,752,799 shares of common stock issued and outstanding with 5,000,000,000 shares authorized. During the quarter ended August 31, 2006 the Company issued 25,511,834 post-reverse split shares of free trading common stock under a court ordered settlement agreement as consideration for the conversion of $107,500 in debentures that had become due.  These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, after a hearing with notice to, and an opportunity to be heard from, interested parties, as to the fairness of each transaction, by a state court in Florida who specifically determined, prior to declaring that the transactions were exempt under Section 3(a)(10), that the transactions were fair to the interested parties.   As a result of issuing these shares, the Company recorded an expense of $1,818,977, which represented the difference between the value of the stock issued and the amount of note converted.  During the quarter ended August 31, 2006, the Company issued 900,000 shares of restricted common stock to Ray Brown for payment of $47,680 of interest due on convertible debentures. Accrued interest-related party was decreased as a result.   Stock Options  During the quarter ended May 31, 2006, all outstanding stock options expired unexercised.  As of August 31, 2006, the Company had no stock options issued or outstanding.  NOTE 5  LEGAL MATTERS  On December 13, 2005, the Company executed a Release and Settlement Agreement with Connors Drilling LLC in regards to a civil suit filed by Connors for payment of prior services performed.  Under the terms of the settlement, the Company agreed to pay Connors a total of $91,727, which included interest and legal fees.  During the quarter ended May 31, 2006, the Company paid the remaining balance of $45,939.60.  From September 30, 2004 through March 31, 2005 Unico issued convertible debentures (Debentures) aggregating approximately $625,000 to Reef Holding, Ltd. and approximately $467,500 to Kentan Limited Corp. that were unpaid, and in default, as of February 9, 2006.  The holders of the convertible debentures had assigned portions of the Debentures to Blue Marble Investments, Outboard Investments, Umbrella Holdings and Yanzu, Inc.  Because Unico, Incorporated failed to pay the Debentures when due, a total of ten (10) lawsuits were filed by these Debenture holders against Unico, Incorporated in the Twelfth Circuit (State) Court in Florida (Case Nos. 2006-CA-003385-NC, 2006-CA-001230-NC, 2006-CA-001825-NC, 2006-CA-003067-NC, 2006-CA-001229-NC, 2006-CA-002111-NC, 2006-CA-002597-NC, 2006-CA-003068-NC, 2006-CA-004264-NC and 2006-CA-003851-NC).   The Debentures provided that the principal amount and accrued interest were convertible, at the option of the holders of the Debentures, into Unicos common stock at a price per share equal to 50% of the closing bid price of Unicos common stock as quoted on the OTC Bulletin Board on the immediately preceding trading day prior to the notice of conversion.  Unico agreed to settle each action by issuing shares of its common stock to the plaintiffs using a valuation of approximately 14% to 20% of the then existing bid price of Unico, Incorporated common stock.  These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, after a hearing with notice to, and an opportunity to be heard from, interested parties, as to the fairness of each transaction, by a state court in Florida which specifically determined, prior to declaring that the transactions were exempt under Section 3(a)(10), that the transactions were fair to the interested parties. During the quarter ended August 31, 2006, in connection with the exercise of conversion rights by the holders of the Debentures and pursuant to the litigation settlements, Unico issued an aggregate of 25,511,834 post-reverse split shares of its common stock in settlement of debentures totaling $107,500.  NOTE 6  GOING CONCERN  The Companys financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has incurred losses of $36,584,499 from its inception through August 31, 2006.   It has not established any revenues with which to cover its operating costs and to allow it to continue as a going concern.  10    During the next 12 months, the Companys plan of operation is to raise approximately $5,000,000 for investment into its subsidiary companies: Deer Trail Mining Company, Bromide Basin Mining Company and Silver Bell Mining Company.  The funds are intended for the following purposes:  § Ship core samples taken from the completed 2nd phase of exploratory drilling at the Deer Trail Mine and have them analyzed/certified by an independent lab; § Continue sampling and testing ore from the Deer Trail Mine to evaluate the most efficient means to conduct future mining and milling activities; § Increase mining and milling activities at the Deer Trail Mine; § Upgrade the mine infrastructure at the Deer Trail Mine; § Continue to upgrade and complete the re-construction project on the existing mill at the Deer Trail Mine; § Acquire a pilot mill to accommodate temporary production of concentrates to PGM Company while upgrades are made to the existing mill at the Deer Trail Mine; § Upgrade the screening plant and crushing facilities at the upper Deer Trail Mine and resume processing the ore dumps; § Acquire new mining equipment and vehicles to improve operations at the Deer Trail Mine; § Conduct an extensive preproduction feasibility study at the Bromide Basin Mine prior to any additional mining production and analyze the potential of the claims before exercising its purchase option from Kaibab Industries; § Exercise the purchase option or extend the Bromide Basin Mine lease; § Commence an exploration and resource definition program at the Silver Bell Mine beginning in 2007; § Exercise or extend an option to purchase the Deer Trail Mine for $3,000,000.  Accomplishing the 12-month plan of operations is dependent on the Company raising approximately $5,000,000 in equity and/or debt financing during the next 12 months.  The Companys cash as of October 12, 2006 will sustain operations for approximately 60 days.  NOTE 7  SUBSEQUENT EVENTS  Subsequent to the period ending August 31, 2006, the Companys subsidiary, Deer Trail Mining Company, entered into an agreement to acquire 70 additional claims covering 1,500 acres in Piute County Utah for the purpose of exploration, and mining activities.  In consideration for the rights under the agreement, the Deer Trail Mining Company agreed to pay the lease holder an amount equal to three percent of the gross sales proceeds from all ore, concentrates, and all other productions of mineral resources extracted from the claims.  Subsequent to August 31, 2006, the Company executed two new convertible debentures of $250,000 each with a third party.  The debentures can be converted at a 50% discount to the closing bid price on the date of conversion and are due and payable six months from the date of issuance, September 7, 2006 and October 2, 2006, respectively.  Subsequent to the period ending August 31, 2006, the Company issued 106,658,309 shares of common stock for the payment on convertible debentures and interest on convertible debentures.   11   Item 2. Management's Discussion and Analysis or Plan of Operation.  Forward-Looking Statements.  When used in this Form 10-QSB, the words "expects", "anticipates", "estimates" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.  ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REFLECT MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY.  General Information Regarding Unico and its Operations.  Unico, Incorporated (the Company, Unico or UNCN) an Arizona corporation, was formed as an Arizona corporation on May 27, 1966. It was incorporated under the name of Red Rock Mining Co., Incorporated. It was later known as Industries International, Incorporated and I.I. Incorporated before the name was eventually changed to Unico, Incorporated in 1979. On July 12, 2004, Unico filed an election with the U.S. Securities and Exchange Commission to become a business development company (BDC) pursuant to Section 54 of the Investment Company Act of 1940.   On August 1, 2005, the Board of Directors unanimously approved a proposal to withdraw the Companys election to be treated as a business development company as soon as practicable so that Unico could begin conducting business as an operating company rather than as a business development company subject to the Investment Company Act.  On October 11, 2005, a Special Meeting of the Unico shareholders was held to consider and vote upon a proposal to authorize the Companys Board of Directors to withdraw the Companys election to be treated as a BDC and the proposal was approved.  On October 12, 2005 a Notification of Withdrawal was filed with the Securities and Exchange Commission so that Unico could begin conducting business as an operating company rather than as a BDC subject to the Investment Company Act. The mining operations at the Deer Trail Mine have been conducted through Unico's subsidiary, Deer Trail Mining Company, LLC (Deer Trail Mining Company or DTMC) since soon after DTMC was formed in late June, 2004. The mining operations at the Bromide Basin Mines have been conducted through Unico's subsidiary, Bromide Basin Mining Company, LLC (Bromide Basin Mining Company or "BBMC") since soon after BBMC was formed in late June, 2004. Future mining operations at the Silver Bell Mine will be conducted through Unico's subsidiary, Silver Bell Mining Company, Inc. ("SBMC"). Deer Trail Mining Company, LLC  On March 30, 1992, Unico, Incorporated entered into a Mining Lease and Option to Purchase agreement with Deer Trail Development Corporation, with headquarters in Dallas, Texas. Deer Trail Development Corporation is now known as Crown Mines, L.L.C. The lease was to run for a period of 10 years, and cover 28 patented claims, 5 patented mill sites and 171 unpatented claims located approximately 5 miles South of Marysvale, Utah. It includes mine workings known as the Deer Trail Mine, the PTH Tunnel and the Carisa and Lucky Boy mines. There are no known, proven or probable reserves on the property.  12   Effective December 1, 2001, a new lease agreement was entered into between the parties covering the same property for a period of thirty (30) months. It was subsequently extended through August 31, 2005 through a Modification of Mining Lease and Option to Purchase dated May 31, 2004. A Second Modification of Mining Lease and Option to Purchase (the Deer Trail Lease) was executed by the parties on April 21, 2006, and Unico paid $237,787 at that time to Crown Mines, L.L.C.  The Deer Trail Lease provides for monthly rental payments of $10,000 which began July 1, 2006, and it also obligates Unico to pay BLM fees and property taxes for the assessment year September 1, 2006 through August 31, 2007.  It provides for a minimum royalty percentage rate for gold produced from the claims which varies from 3% for gold priced at $500 or less per troy ounce, 4% for gold priced at greater than $500 but less than or equal to $600 per troy ounce, and 5% for gold priced at greater than $600 per troy ounce.  It obligates Unico to file a registration statement with the Securities and Exchange Commission for the purpose of raising money from the sale of Unico stock to be used to exercise the purchase option to purchase the Deer Trail Mine.  It extends the purchase option until the earlier of:  November 1, 2006 or the tenth business day after the registration statement is declared effective.  The Deer Trail Lease now terminates when the purchase option expires.  In August 2006, Deer Trail Mining Company entered into a Mining Lease with Joel Johnson covering the Clyde, Clyde Intermediate and Crown Point claims.  These claims are located near the Deer Trail Mine.  Deer Trail Mining Company has leased the claims for the purpose of conducting mine exploration, evaluation, and possible mining activities on the claims.  The Mining Lease is for two years, with options to extend the lease for 50 additional one year periods.  Under the terms of the Mining Lease, Deer Trail Mining Company paid initial down payments totaling $31,000 with $4,000 due in the second year of the lease.  If Deer Trail Mining Company elects to extend the lease, it must pay $3,000 for the first extension year, and the annual lease extension payment increases ten percent (10%) per year thereafter.  Additionally, Deer Trail Mining Company will pay three percent (3%) of the gross sale proceeds from the sale of any ore concentrates, or other mineral resources extracted from the claims.  Subsequent to August 31, 2006, Deer Trail Mining Company entered into a Non-Patented Mining Claims Lease covering approximately 70 additional claims covering approximately 1,500 acres in Piute County Utah for the purpose of exploration, evaluation and mining activities.  In consideration for the rights under the agreement, the Deer Trail Mining Company agreed to pay the lease holders $7,000 per year for each of the first three years.  Deer Trail Mining Company has the right to extend the lease for 50 additional one year periods.  If extended by Deer Trail Mining Company, the annual lease payment is $10,000 in each of years four and five, and thereafter the annual lease payment increases by ten percent (10%) per year.  In addition to the annual lease payments, Deer Trail Mining Company has also agreed to pay an amount equal to three percent (3%) of the gross sales proceeds from all ore, concentrates, and all other productions of mineral resources extracted from the claims.  The agreement contains an option to purchase the claims exercisable at $350,000 during the five first years of the lease.  The exercise price increases $50,000 per year thereafter.  It may only be exercised while the lease is effective.  Following the formation of the Deer Trail Mining Company in June 2004, Unico assigned all of the various assets, liabilities and operations associated with the Deer Trail Mine to Deer Trail Mining Company which has assumed responsibility for making payments under the Deer Trail Lease.  Since June 2004 Deer Trail Mining Company has assumed operations, ownership and management control of the Deer Trail Mine.  Deer Trail Mining Company presently has seven full time employees, one part time employee and consultants.  The necessary permits to commence mining activities at the Deer Trail Mine have been acquired, provided that the surface disturbance from the mining activities does not exceed 10 acres for both mine and mill. In early 2005, Unico and Deer Trail Mining Company, received approval of the company's Large-Scale Mining Permit for the Deer Trail Mine in Marysvale, Utah. The State of Utah's Division of Oil, Gas and Mining granted approval of the company's application to expand its existing small mining project to a large mining operation, which is expected to significantly increase the area of mining activity and the capacity of the company's mill at the Deer Trail Mine. This Large-Scale permit takes the place of the previous two Small-Scale permits described above.  In 2004, Unico filed to obtain a construction permit with the State of Utah Department of Environmental Quality (both the Utah Division of Air Quality and the Utah Division of Water Quality) for the Deer Trail Mine tailings impoundment pond no. 2.  Unico worked for more than two years to reopen the Deer Trail Mine.  Unico commenced mining activities in late March or early April 2001 on the Deer Trail Mine.  To date, the mining activities have been fairly limited.  There have been between 2 and 5 miners at various times working full time in the Deer Trail Mine both on mine development work and production work until approximately October 2003.  Their efforts were concentrated in the 3400 Area of the mine, from which they removed approximately 1,000 tons of ore per month.  The ore has been stock-piled and some of it has been crushed.  Some of the employees have worked on mine maintenance.  13   Unico completed a mill on site at the Deer Trail Mine. In November 2001, Unico began milling activities. Unico started screening and crushing ore dumps on the upper Deer Trail Mine and moved the materials to the ball mill.  Currently the Deer Trail Mining Company is reconstructing the mill to enhance productivity and efficiency.  The Deer Trail Mining Company has temporarily suspended screening and crushing ore at the Deer Trail Mine to accommodate a construction project to upgrade the screening plant and crushing facility.  We believe that there are a variety of mining companies and other mineral companies that are potential purchasers for the lead concentrates, zinc concentrates and other concentrates which we intend to sell as the end product from our Deer Trail Mine mining and milling operations. The concentrates can be transported by either rail or truck, and there are a variety of trucking companies that are willing and able to transport concentrates to smelters or other places designated by purchasers.  In September 2004, Deer Trail Mining Company completed its first phase of exploratory drilling at the Deer Trail Mine.  The Deer Trail Mining Company contracted Lang Exploratory Drilling to complete the phase of drilling.  Lang completed a total of 3,653 feet of reverse circulation drilling and finished 28 drill holes at specified targets located on the Upper Deer Trail Mine.  741 samples were safeguarded by Lang Exploratory Drilling during this phase and shipped to ALS Chemex at its Elko, Nevada facility for independent lab verification and analysis. The first phase of exploration drilling was designed to identify near surface deposits, determine potential resources and define limits of mineralization south of the main ore channel mined at the Upper Deer Trail Mine. Historical data of the workings was sufficient to delineate the grade of mineralization remaining in the stopes, but no data was available to delineate the grade of mineralization outside the workings or how far that mineralization flowed into the surrounding formations. The initial phase of reverse circulation drilling serves as an adequate means to define the limits of mineralization south of the main ore channel, which is situated in the lower Toroweap formation, along the crest and down the northeast limb of the Deer Trail anticline. This phase of drilling was accomplished with lower cost reverse circulation drill holes in order to establish the presence of mineralization at the Upper Deer Trail area. Once the limits of mineralization are established, work can begin to further define those zones by diamond core drilling. This initial phase of drilling is considered merely a starting point in generating data for pre-feasibility and feasibility studies for the Deer Trail Mine operations. The most upper holes RC-1 through RC-7 were placed well above the elevation of the known workings of the No. 2 Tunnel and slightly south of the northwesterly trending ore channel. Significant mineralization was intercepted in holes RC-1 and RC-2, which were drilled in the area closest to the main ore channel. Drill holes RC-5, 6, 8, 9, 13 and 14 were all drilled well south of the historically delineated mineralization, and on the southern most up-side of a post mineral fault. It can be concluded that mineralization intercepted in these holes is not directly related to the mineralization of the main Upper Deer Trail ore channel.   14   HoleIntervalGoldSilverLeadZincfrom - to     (ft)(grams/troy oz.)(grams/
Troy oz.)(%)(%)RC-1190  230      400.20710.980.3550.205RC-240 - 45          50.36495.363.610.390Includes175 - 180      50.36945.712.871.41RC-1065 - 95        300.36316.480.0860.022 RC-11
  60 - 70       10
  1.36
  52.25
  0.758
  0.191Includes
  65 - 70         5
  2.26
  32.69
  0.961
  0.289RC-12
  85 - 90         5
  0.460
  137.14
  3.94
  1.00RC-17
  55 - 65        10
  0.799
  13.02
  0.033
  0.012RC-18
  45 - 50        5
  1.54
  40.77
  0.154
  0.018RC-19
  0  140      140
  0.527
  14.65
  0.116
  0.107Includes
  35 - 45       10
  2.64
  14.11
  0.840
  1.26Includes
  35 - 40       5
  4.66
  21.15
  1.30
  2.14Includes
  75 - 120    45
  0.930
  34.86
  0.135
  0.021Includes
  95 - 105   10
  3.17
  88.63
  0.303
  0.019Includes
  100 - 105       5
  4.78
  151.02
  0.682
  0.008RC-20
  95  100        5
  1.92
  62.02
  0.218
  0.030RC-21
  95 - 110      15
  0.899
  74.29
  0.145
  0.014RC-22
  110 - 120     10
  1.77
  18.14
  0.074
  0.024Includes
  115 - 120     5
  3.25
  27.52
  0.079
  0.014   15   In early 2005, Deer Trail Mining Company contracted with Connors Drilling to commence an underground diamond core drill program.  This 2nd phase of exploratory drilling inside the PTH Tunnel of the Deer Trail Mine has been completed. The Phase II underground diamond core drilling program was primarily designed to target known horizons of mineralization and identify new mineralized horizons throughout the main ore channel of the Deer Trail Mine. The Company completed 7,235 feet of diamond core drilling and finished 13 underground drill holes.  According to preliminary reports by the Companys geologist, all of the holes drilled were reported to intersect mineralization within their designated targets. That report states that a total of approximately 514 feet of mineralization was intersected and consisted mostly of sulfide minerals (e.g. tetrahedrite, galena, pyrite, chalcopyrite and sphalerite). Other intercepts were encountered through oxidized mineral not reported in this total, as well as zones of subtly altered rock that may contain high mineral values and offer significant potential. The company is now working on final independent core logging and splitting verification. Once complete, it plans to ship its core samples to an independent lab for analysis.  On August 31, 2005, Deer Trail Mining Company entered into a five-year purchase contract with PGM, LLC of Los Angeles under which PGM will purchase precious metal bearing concentrates from the Deer Trail processing center.  Most sales will not occur until the mill processing center is complete at the Deer Trail Mine.  PGM has advanced Deer Trail Mining Company $25,000 for an initial shipment of concentrates that will be produced on a pilot plant basis.  Silver Bell Mining Company, Inc.  Silver Bell Mining Company, Inc. was incorporated in the State of Utah on April 26, 1993. It has acquired 26 patented mining claims located in American Fork Canyon, Utah County, Utah, which is organized into three separate parcels. The claims contain mining properties that have not been mined for production since 1983. The properties were mined primarily for silver, lead and zinc. There are no known, proven or probable reserves on the property.  Silver Bell Mining Company conducted some exploration work on the Silver Bell Mine through 2004. Silver Bell Mining Company plans to commence an exploration and resource definition program at the Silver Bell Mine beginning in 2007.  Silver Bell Mining Company may also seek a joint venture mining partner to jointly develop the Silver Bell Mine.  Silver Bell Mining Company anticipates that any ore mined from the Silver Bell Mine will be transported to the Deer Trail Mine site where it will be crushed and milled.  16   Bromide Basin Mining Company, LLC  On July 20, 2001, Unico entered into a Mining Lease and Option to Purchase with Kaibab Industries, Inc., an Arizona corporation. The parties then entered into a Revised Mining Lease and Option to Purchase in April 2003 (the "Revised Kaibab Mining Lease").  Following the formation of the Bromide Basin Mining Company in June 2004, Unico assigned all of its assets, liabilities and operations associated with the Bromide Basin Mines to Bromide Basin Mining Company. A Second Revised Mining Lease and Option to Purchase was entered into with Bromide Basin Mining Company in May 2005 that expired November 1, 2005.   Effective May 1, 2006, the parties entered into a Third Revised Mining Lease and Option to Purchase (the Third Revised Mining Lease).  At that time Unico paid approximately $63,592 to Kaibab Indutries, Inc. for past due lease payments, taxes and BLM fees.  Under the Third Revised Mining Lease, Kaibab Industries, Inc. has leased to Bromide Basin Mining Company certain mining claims located in the Henry Mountain Mining District in Garfield County, Utah containing approximately 400 acres, which includes the Bromide Basin Mines. The Third Revised Mining Lease grants to Bromide Basin Mining Company the option to purchase six (6) fully permitted patented mining claims and twenty-one (21) located mining claims comprising in all over 400 acres of Bromide Basin in the Henry Mountain Mining District located in Garfield County, Utah. The option exercise price is $835,000 for all specified mining claims, mill sites and dumps being leased.  It expires November 1, 2006, but Bromide Basin Mining Company has the right to extend the lease for one additional year.  As consideration for the Third Revised Mining Lease, Bromide Basin Mining Company has agreed to pay Kaibab Industries in advance the sum of $5,000 per month and pay a five percent (5%) net smelter return upon all ore taken from the leased premises each month, to the extent that the amount for any month exceeds the $5,000 monthly base rent.  The primary purpose of the agreement was to allow Bromide Basin Mining Company access to the claims to conduct an extensive preproduction feasibility study prior to any additional mining production and to analyze the potential of the claims before exercising the purchase option from Kaibab Industries.  The Company has started its pre-production feasibility study, and is currently analyzing the potential of the claims at the Bromide Basin Mines.  During the next 12 months, the Companys plan of operation is to raise approximately $5,000,000 for investment into its subsidiary companies: Deer Trail Mining Company, Bromide Basin Mining Company and Silver Bell Mining Company.  The funds are intended for the following purposes:  § Ship core samples taken from the completed 2nd phase of exploratory drilling at the Deer Trail Mine and have them analyzed/certified by an independent lab; § Continue sampling and testing ore from the Deer Trail Mine to evaluate the most efficient means to conduct future mining and milling activities; § Increase mining and milling activities at the Deer Trail Mine; § Upgrade the mine infrastructure at the Deer Trail Mine; § Continue to upgrade and complete the re-construction project on the existing mill at the Deer Trail Mine; § Acquire a pilot mill to accommodate temporary production of concentrates to PGM Company while upgrades are made to the existing mill at the Deer Trail Mine; § Upgrade the screening plant and crushing facilities at the upper Deer Trail Mine and resume processing the ore dumps; § Acquire new mining equipment and vehicles to improve operations at the Deer Trail Mine; § Conduct an extensive preproduction feasibility study at the Bromide Basin Mine prior to any additional mining production and analyze the potential of the claims before exercising its purchase option from Kaibab Industries; § Exercise the purchase option or extend the Bromide Basin Mine lease; § Commence an exploration and resource definition program at the Silver Bell Mine beginning in 2007; and § Exercise or extend an option to purchase the Deer Trail Mine for $3,000,000.   17   Accomplishing the 12-month plan of operations is dependent on the Company raising approximately $5,000,000 in equity and/or debt financing during the next 12 months.  The Companys cash as of October 12, 2006 will sustain operations for approximately 60 days.  Reverse Stock Split  Effective August 11, 2006, the Companys common stock underwent a 1 for 100 reverse stock split.  As a result, the number of outstanding shares of the Companys common stock as of August 11, 2006 decreased from approximately 4,954,096,450 pre-reverse split shares to 49,540,965 post-reverse split shares.  Share figures appearing in this report are generally expressed in numbers of post-reverse split shares, unless otherwise noted.  Results of Operations.  During the three months ended August 31, 2006, Unico experienced a net loss in the amount of $3,355,624 or approximately ($0.07) per share compared to a net loss of $260,689 or approximately ($0.05) per share for the same period in 2005.  During the six months ended August 31, 2006, Unico incurred a net loss of $10,033,003 or approximately ($0.25) per share compared to a net loss of $922,521 or approximately ($0.19) per share for the same period in 2005.  For the three months ended August 31, 2006 and August 31, 2005, Unico reported no revenues. For the six months ended August 31, 2006 and August 31, 2005, Unico reported no revenues.  Unico attributes the $3,094,935 increase in net loss for the three month period ended August 31, 2006 compared to the same period ended August 31, 2005 primarily to a $1,818,977 increase in loss on settlement of debt due to derivative aspect of financing through a court ordered settlement on convertible debentures a $760,295 increase in interest expense, a $204,026 derivative loss on debentures compared to a $149,665 derivative gain on debentures in the prior period, and a $161,878 increase in total operating expenses.  The $101,086 increase in general and administrative expenses primarily resulted from increases in consulting and professional fees.  Unico attributes the $9,110,482 increase in net loss for the six month period ended August 31, 2006 compared to the same period ended August 31, 2005 primarily to a $7,011,837 increase in loss on settlement of debt due to derivative aspect of financing through a court ordered settlement on convertible debentures, a $945,725increase in interest expense, a $537,551 derivative loss on debentures compared to a $491,585 derivative gain on debentures in the prior period, and a $104,004increase in total operating expenses.  The $167,522 increase in general and administrative expenses primarily resulted from increases in consulting and professional fees, legal expense and insurance expense.  The substantial increase in loss on settlement of debt for the three month period ended August 31, 2006 is largely attributed to the Company converting $107,500 of convertible debentures into 25,511,834 post-reverse split shares of free-trading common stock issued by the Company.  As a result of these transactions, the Company recorded a loss on settlement of debt of $1,818,977 related to the court ordered settlement of the conversion of the debt during the quarter ended August 31, 2006.   18    The substantial increase in loss on settlement of debt for the six month period ended August 31, 2006 is largely attributed to the Company converting $107,500of convertible debentures into25,511,834post-reverse split shares of free-trading common stock issued by the Company.  As a result of these transactions, the Company recorded a loss on settlement of debt of $7,011,837 related to the court ordered settlement of the conversion of the debt during the quarter ended August 31, 2006.  Unico expects expenses and losses during the next year to more closely resemble the results for the three and six month periods ended August 31, 2006 than the same periods ended August 31, 2005 due to Unicos ongoing financing activities and increased mining activities.  Liquidity and Capital Resources  The Companys financial statements present an impairment in terms of liquidity. As of August 31, 2006 the Company had a deficit in working capital of $7,679,964.  The Company has accumulated $36,584,499 of net operating losses through August 31, 2006, which may be used to reduce taxes in future years through 2026. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carry-forwards.  The potential tax benefit of the net operating loss carry-forwards have been offset by a valuation allowance of the same amount. Under continuing operations the Company has not yet established revenues to cover its operating costs.  Management believes that the Company will soon be able to generate revenues sufficient to cover its operating costs through the operations of its subsidiaries.  In the event the Company is unable to do so, and if suitable financing is unavailable, there is substantial doubt about the Companys ability to continue as a going concern.  We are dependent on raising approximately $5,000,000 to successfully implement our 12 month business plan described above.  The Companys termination of its election to be regulated as a business development company has allowed the Company to move forward.  We believe $5,000,000 can be raised with a combination of debt and equity.  Our auditors have issued a "going concern" opinion in note 6 of our February 28, 2006 financial statements, indicating we do not have established revenues sufficient to cover our operating costs and to allow us to continue as a going concern. If we are successful in raising an additional $5,000,000 in equity, debt or through other financing transactions in the next 12 months, we believe that Unico will have sufficient funds to meet operating expenses until income from mining operations should be sufficient to cover operating expenses.   Item 3. Controls and Procedures.  Under the supervision and with the participation of management, acting as our principal executive officer and principal financial officer, Mark A. Lopez evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act), as of August 31, 2006.  Based on this evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communication to our chief executive officer and chief financial officer, in a manner that allowed for timely decisions regarding required disclosure. During the last fiscal quarter ended August 31, 2006, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.  19     PART II - OTHER INFORMATION   Item 1. Legal Proceedings.  During the quarter ended May 31, 2005, the Company was notified by a staff attorney at the Securities and Exchange Commission (Commission) that certain debentures and convertible preferred stock issued by the Company were considered senior securities as defined by the Investment Company Act of 1940 (Investment Act). Unico believed at the time that the debentures and Series A Preferred shares that were issued were not senior securities.   The Company may not have been in compliance with Section 18 of the Investment Act which required that the Company maintain net asset to senior security coverage of at least 200% while the Company was a business development company (BDC).  The Companys efforts to restructure the obligations and preferred stock into a format acceptable with the Commission were unsuccessful. As a result, the Company may have been out of compliance with Sections 18, 27 and 61 of the Investment Act while the Company was a BDC.  On October 11, 2005, the Companys shareholders approved a proposal to authorize the Companys Board of Directors to withdraw the Companys election to be treated as a BDC.  On October 12, 2005 the Company filed a Notification of Withdrawal of Election to be Subject to Sections 55 through 65 of the Investment Company Act of 1940 pursuant to Section 54(c) of the Act with the Commission in order to withdraw the Companys election to be treated as a BDC. From September 30, 2004 through March 31, 2005, Unico issued convertible debentures (Debentures) aggregating approximately $625,000 to Reef Holding, Ltd. and approximately $467,500 to Kentan Limited Corp. that were unpaid, and in default, as of February 9, 2006.  The holders of the convertible debentures had assigned portions of the Debentures to Blue Marble Investments, Outboard Investments, Umbrella Holdings and Yanzu, Inc.  Because Unico, Incorporated failed to pay the Debentures when due, a total of ten (10) lawsuits were filed by these Debenture holders against Unico, Incorporated in the Twelfth Circuit (State) Court in Florida (Case Nos. 2006-CA-003385-NC, 2006-CA-001230-NC, 2006-CA-001825-NC, 2006-CA-003067-NC, 2006-CA-001229-NC, 2006-CA-002111-NC, 2006-CA-002597-NC, 2006-CA-003068-NC, 2006-CA-004264-NC and 2006-CA-003851-NC).   The Debentures provided that the principal amount and accrued interest were convertible, at the option of the holders of the Debentures, into Unicos common stock at a price per share equal to 50% of the closing bid price of Unicos common stock as quoted on the OTC Bulletin Board on the immediately preceding trading day prior to the notice of conversion.  Unico agreed to settle each action by issuing shares of its common stock to the plaintiffs using a valuation of approximately 14% to 20% of the then existing bid price of Unico, Incorporated common stock.  These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, after a hearing with notice to, and an opportunity to be heard from, interested parties, as to the fairness of each transaction, by a state court in Florida which specifically determined, prior to declaring that the transactions were exempt under Section 3(a)(10), that the transactions were fair to the interested parties.  From February 9, 2006 until August 31, 2006, in connection with the exercise of conversion rights by the holders of the Debentures and pursuant to the litigation settlements, Unico issued an aggregate of 69,518,520 post-reverse split shares of its common stock.   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  As of August 31, 2006, the Company had 79,752,799 shares of common stock issued and outstanding with 4,899,197,201 shares authorized but unissued. During the quarter ended August 31, 2006 the Company issued 25,511,834 shares of free trading common stock under a court ordered settlement agreement as consideration for the conversion of $107,500 in debentures that had become due.  These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, after a hearing with notice to, and an opportunity to be heard form, interested parties, as to the fairness of each transaction, by a state court in Florida who specifically determined, prior to declaring that the transactions were exempt under Section 3(a)(10), that the transactions were fair to the interested parties. For additional information concerning these stock issuances, see the last paragraph in Item 1. Legal Proceedings above.  During the quarter ended August 31, 2006, the Company issued 900,000 post-reverse split restricted shares of its common stock to Ray C. Brown for payment of $47,680 of interest due on convertible debentures.  The shares were issued in reliance on Section 4(2) of the Securities Act of 1933 for transactions not involving any public offering.  The certificates representing the shares have been appropriately restricted.   20    Item 3. Defaults Upon Senior Securities.  From September 30, 2004 through March 31, 2005 Unico issued convertible debentures (Debentures) aggregating approximately $625,000 to Reef Holding, Ltd. and approximately $467,500 to Kentan Limited Corp. that were unpaid, and in default, as of February 9, 2006.  The holders of the convertible debentures had assigned portions of the Debentures to Blue Marble Investments, Outboard Investments, Umbrella Holdings and Yanzu, Inc.  Because Unico, Incorporated failed to pay the Debentures when due, a total of ten (10) lawsuits were filed by these Debenture holders against Unico, Incorporated in the Twelfth Circuit (State) Court in Florida (Case Nos. 2006-CA-003385-NC, 2006-CA-001230-NC, 2006-CA-001825-NC, 2006-CA-003067-NC, 2006-CA-001229-NC, 2006-CA-002111-NC, 2006-CA-002597-NC, 2006-CA-003068-NC, 2006-CA-004264-NC and 2006-CA-003851-NC).   The Debentures provided that the principal amount and accrued interest were convertible, at the option of the holders of the Debentures, into Unicos common stock at a price per share equal to 50% of the closing bid price of Unicos common stock as quoted on the OTC Bulletin Board on the immediately preceding trading day prior to the notice of conversion.  Unico agreed to settle each action by issuing shares of its common stock to the plaintiffs using a valuation of approximately 14% to 20% of the then existing bid price of Unico, Incorporated common stock.  These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, after a hearing with notice to, and an opportunity to be heard from, interested parties, as to the fairness of each transaction, by a state court in Florida which specifically determined, prior to declaring that the transactions were exempt under Section 3(a)(10), that the transactions were fair to the interested parties.  From February 9, 2006 until August 31, 2006, in connection with the exercise of conversion rights by the holders of the Debentures and pursuant to the litigation settlements, Unico issued an aggregate of 69,518,520 post-reverse split shares of its common stock.  As of August 31, 2006, Unico has $3,498,274 in outstanding debentures that were in default.   Item 4. Submission of Matters to a Vote of Security Holders.  None   Item 5. Other Information.  None   Item 6. Exhibits and Reports on Form 8-K.  (a) Exhibits  The following exhibits are filed as part of this statement:  The exhibits listed below are required by Item 601 of Regulation S-B.   Exhibit No.DescriptionLocation31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Filed herewith31.2Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Filed herewith32.1Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Filed herewith32.2Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002Filed herewith 10.68Mining Lease with Joel Johnson dated August 7, 2006Filed herewith10.69Convertible Debenture No. 37 for $250,000 dated June 15, 2006 issued to Outboard Investments, LTDFiled herewith10.70Convertible Debenture No. 38 for $100,000 dated August 15, 2006 issued to Outboard Investments, LTDFiled herewith10.71Convertible Debenture No. 39 for $100,000 dated August 18, 2006 issued to Outboard Investments, LTDFiled herewith10.72Convertible Debenture No. 40 for $250,000 dated August 31, 2006 issued to Outboard Investments, LTDFiled herewith    (b) Reports on Form 8-K  A Form 8-K Current Report was filed on June 7, 2006 to report under Item 3.02 Unregistered sales of equity securities.  21      SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  UNICO, INCORPORATED  Date: October 23, 2006/s/ Mark A. Lopez
Mark A. Lopez
Chief Executive Officer       22   EXHIBIT 31.1 SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER  I, Mark A. Lopez, certify that:  1.   I have reviewed this quarterly report on Form 10-QSB of Unico, Incorporated;  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;  4.The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:  (a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  (b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  (c)  Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  (d)  Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and  5.  The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuers board of directors (or persons performing the equivalent functions):  (a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and  (b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.  Date: October 23, 2006/s/ Mark A. Lopez
Mark A. Lopez
Chief Executive Officer    EXHIBIT 31.2 SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICER  I, Mark A. Lopez, certify that:  1.   I have reviewed this quarterly report on Form 10-QSB of Unico, Incorporated;  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;  4.The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:  (a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  (b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  (c)  Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  (d)  Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and  5.  The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):  (a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and  (b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.  Date: October 23, 2006/s/ Mark A. Lopez
Mark A. Lopez
Chief Financial Officer     EXHIBIT 32.1   CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Quarterly Report of Unico, Incorporated (the "Company") on Form 10-QSB for the period ending August 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark A. Lopez, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:  (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of the operation of the Company.  Date: October 23, 2006/s/ Mark A. Lopez
Mark A. Lopez
Chief Financial Officer      EXHIBIT 32.2   CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the Quarterly Report of Unico, Incorporated (the "Company") on Form 10-QSB for the period ending August 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark A. Lopez, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:  (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of the operation of the Company.  Date: October 23, 2006/s/ Mark A. Lopez
Mark A. Lopez
Chief Financial Officer