UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM
10-Q  (Mark One) [X] QUARTERLY REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934 For
the quarterly period ended August 31, 2008  [  ]
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 registrant as
specified in its charter)  Arizona
86-0205130(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)  Indicate by check mark whether the registrant (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [  ]  Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.  See the
definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act.  Large
accelerated filer [  ] Accelerated
filer [  ]  Non-accelerated
filer   [  ] (Do not check if a smaller reporting company) Smaller
reporting company [ X ]  Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [   ]
No [X]  APPLICABLE ONLY TO CORPORATE ISSUERS  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 10, 2008, the
issuer had outstanding 12,306,929 shares of its common stock, $0.001 par value
per share.  Transitional Small Business Disclosure Format Yes [  ] No [X
]


PART I - FINANCIAL INFORMATION   Item 1. Financial
Statements.       UNICO, INCORPORATED AND SUBSIDIARIES FINANCIAL STATEMENTS  August 31, 2008


UNICO, INCORPORATEDConsolidatedBalance SheetsASSETSAugust 31,

February 29,2008
2008(Unaudited)

(Audited)Current AssetsCash
$
56,592
$
-Accounts receivable

-

1,420Prepaid expense

-

20,000Total
Current Assets

56,592

21,420Fixed AssetsEquipment, furniture, etc. net of depreciation
(Note 1)

4,061,325

4,167,132Construction in progress

2,321,741

2,174,952Total
Fixed Assets

6,383,066

6,342,084Other Assets:Cash- reclamation bonds

218,698

215,799Deposit

20,947

8,947Total
Other Assets

239,645

224,746Total
Assets
$
6,679,303
$
6,588,250LIABILITIES AND STOCKHOLDERS'
DEFICITCurrent LiabilitiesBank overdraft
$
-
$
3,142Accounts payable

722,779

785,427Wages payable

17,197

27,196Accrued expenses

400

400Reclamation obligations

151,490

144,862Accrued interest payable

27,534

24,510Accrued interest payable - related party (Note
2)

591,884

355,845Taxes payable

15,530

17,369Derivative liability

9,873,474

8,311,182Debentures payable, (Note 3)

75,000

75,000Debentures payable-related party net of discount
(Note 2)

6,899,213

5,496,821Total
Current Liabilities

18,374,501

15,241,754Total
Liabilities

18,374,501

15,241,754Stockholders' DeficitPreferred Stock, authorized 20,000,000 shares,
$0.001 Par Value, 9,800,000 shares issued and outstanding

9,800

9,800Common Stock,  authorized 5,000,000,000
shares, $0.001 Par Value,10,492,730 shares issued and outstanding

10,493

9,881Stock payable

999,000

999,000Additional paid in capital

51,299,907

51,252,507Accumulated deficit

(64,014,398)

(60,924,692)Total
Stockholders' Deficit

(11,695,198)

(8,653,504)Total
Liabilities and Stockholders' Deficit
$
6,679,303
$
6,588,250The accompanying notes are an integral
part of these consolidated financial statements.        3     UNICO, INCORPORATEDConsolidatedStatements of Operations)(Unaudited)For
the Six Months Ended

For
the Three Months EndedAugust 31,

August 31,2008


2007

2008


2007Total
Revenues
$
-

$
-
$
-

$
-Operating
ExpensesDrilling,
exploration and maintenance expense

170,336


188,830

49,612


82,907Depreciation
and accretion

118,085


74,939

59,141


37,187Professional
fees

203,770


255,983

110,253


161,552Salaries/wages

397,878


151,629

189,781


76,986General
and administrative expense

229,643


228,897

93,573


126,680Total
Operating Expenses

1,119,712


900,278

502,360


485,312Net Operating
Loss

(1,119,712)


(900,278)

(502,360)


(485,312)Other Income
(Expense)Interest
expense

(1,695,148)


(2,634,960)

(782,457)


(1,939,453)Interest
income

2,969


5,403

2,913


3,653Derivative
gain (loss) on debentures

(277,818)


210,336

(296,288)


220,084Other
income (expense)

-


200

-


200Loss
on settlement of debt

-


(7,929,184)

-


(3,795,868)Total
Other Expense

(1,969,997)


(10,348,205)

(1,075,832)


(5,511,384)LOSS FROM
CONTINUING OPERATIONS

(3,089,709)


(11,248,483)

(1,578,192)


(5,996,696)Income Tax
Expense

-


-

-


-Net Loss
$
(3,089,709)

$
(11,248,483)
$
(1,578,192)

$
(5,996,696)Net Loss Per
Share
$
(0.62)

$
(2.75)
$
(0.16)

$
(1.11)Weighted Average
Shares Outstanding

9,982,795


4,089,493

10,084,863


5,414,967The
accompanying notes are an integral part of these consolidated financial
statements.                       4    UNICO, INCORPORATEDConsolidatedStatements of Cash
Flows(Unaudited)For
the Six Months EndingAugust 31,2008

2007Cash Flows
from Operating Activities:Net
Loss
$
(3,089,707)
$
(11,248,483)Adjustments to
Reconcile Net Loss to Net Cash Provided by Operations:Depreciation
and accretion expense

118,084

74,939Loss
on settlement of debt

-

7,997,184Derivative/Interest
related to convertible debentures

1,685,736

2,274,497Changes in
Operating Assets and Liabilities:(Increase)
Decrease in:Reclamation
deposit

(2,899)

(1,734)Prepaid
expense

8,000

-Deposits

-

(3,487)Accounts
receivable

1,420

-Increase
(Decrease) in:Accrued
expenses

276,023

116,522Accounts
payable and other liabilities

(74,485)

250,034Net Cash Used by
Operating   Activities

(1,077,828)

(540,528)Cash Flows
from Investing Activities:Purchase
of fixed assets- Construction in progress

(146,789)

(314,460)Purchase
of fixed assets

(5,649)

(3,093,324)Sale
of fixed assets

-

-Net Cash Used by
Investing Activities

(152,438)

(3,407,784)Cash Flows
from Financing Activities:Decrease
in cash overdraft

(3,142)

-Issuance
of convertible debentures

1,290,000

3,965,100Net Cash
Provided by Financing Activities

1,286,858

3,965,100Net Increase
(Decrease) in Cash

56,592

16,788Cash at
Beginning of Period

-

7,194Cash at End of
Period
$
56,592
$
23,982Cash Paid For:Interest
$
-
$
-Income
Taxes
$
-
$
-Non-Cash
Financing Activities:Common
stock issued for services
$
-
$
-Common
Stock issued for debt extinguishments
$
30,000
$
905,787.The
accompanying notes are an integral part of these consolidated financial
statements     5    UNICO, INCORPORATED Notes to the Consolidated Financial
Statements August 31, 2008  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.  The information furnished in the
interim financial statements includes normal recurring adjustments and reflects
all adjustments, which, in the opinion of management, are necessary for a fair
presentation of such financial statements. a. Organization and Business Activities Unico, Incorporated was formed as an
Arizona corporation on May 27, 1966 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.  The Company presently has three
wholly-owned subsidiaries: Deer Trail Mining Company, LLC, Silver Bell Mining
Company, Inc., and Bromide Basin Mining Company, LLC.  As a result, the
accompanying consolidated financial statements are 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  The Companys property consists of mining
equipment, vehicles, office furniture and computer equipment.  The property
is depreciated in a straight-line basis over three, five, and ten years.
 Fixed assets are recorded at cost. Major additions and improvement are
capitalized. 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.  Mineral rights are recorded at cost of acquisition.
 When there is little likelihood of a mineral right being exploited, or the
value of mineral rights have diminished below cost, a write-down is affected
against income in the period that such determination is made.   Fixed Asset ScheduleAugust 31,
2008
August 31,
2007Fixed Assets:Furniture & Equipment
$
1,815,082
1,158,082Land

200,000
200,000Patented mining claims

640,000
640,000Mining Claim

2,360,000
2,360,000Autos

65,814
65,814Total

5,080,896
4,423,896Less Depreciation

(1,019,571)
(815,654)Net Equipment
$
4,061,325
3,608,242  The Company exercised its option to
purchase the claims covered by the Deer Trail lease and paid the balance of
$1,700,000 that was owed on the purchase option agreement in the quarter ended
August 31, 2007.    A total of $4,000,000 was paid to purchase
the Deer Trail Claim over a period of approximately three years.  The
initial $1,000,000 that was paid towards the lease purchase was expensed in the
2004 fiscal year based on the fact that the Company did not have independent
third party verification of the mineable assets at the time.  As a result,
only $3,000,000 of the total acquisition of $4,000,000 is being capitalized.  The purchase of the Deer Trail mines claims
is comprised of 32 patented mining claims and 170 unpatented mining claims.
 The patented claims comprise 16% of the total claims purchased.  As a
result, $640,000 ($4,000,000 x 16% = $640,000) will be treated as a purchase of
land based on the fact that patented claims give the Company title to the use of
the land.  The balance of the capitalized amount of $2,360,000 is for the
unpatented claims and is subject to be amortized over the life of the mineable
assets.   6   UNICO,
INCORPORATED Notes to the Consolidated Financial
Statements August 31, 2008  NOTE 1  NATURE OF ORGANIZATION AND
SIGNIFICANT ACCOUNTING PRINCIPLES  cont.  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 debenture
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 their 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. Accounting Method  The Company's consolidated financial
statements are prepared using the accrual method of accounting. The Company has
elected a February 28th year-end.   The Company reports the
operations of itself and its subsidiaries under the equity method of accounting,
resulting in the consolidation of all assets and operations of wholly-owned
subsidiaries.  e. Significant Accounting
Policies  The Company files income tax returns in the
U. S. federal jurisdiction, and in the following state jurisdictions:
California, Arizona, and Utah.  With few exceptions, the Company is no
longer subject to U. S. federal, state and local, or non-U. S. income tax
examinations by tax authorities for years before 2000.  The company has not
filed tax returns since the year 2000 and is therefore subject to examination by
the IRS under the rules of the statute of limitations.  The Company adopted the provisions of the
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes,
on January 1, 2007.  The Companys policy is to recognize
interest accrued related to unrecognized tax benefits in interest expense and
penalties in operating expenses.  FIN 48  Accounting for Uncertainty in
Income Taxes  In July 2006, the FASB issued
Interpretation No. 48, Accounting for Uncertainty in Income Taxesan
interpretation of FASB Statement No. 109 (FIN 48). FIN 48 contains a two step
approach to recognizing and measuring uncertain tax positions accounted for in
accordance with SFAS No. 109. The first step is to evaluate the tax position for
recognition by determining if the weight of available evidence indicates it is
more likely than not that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step
is to measure the tax benefit as the largest amount which is more than 50%
likely of being realized upon ultimate settlement. This provision is effective
for fiscal years beginning after December 15, 2006, which will be the Companys
fiscal year 2008. The Company is evaluating the impact, if any; the adoption of
this statement will have on its results of operations, financial position, or
cash flows. Given the Companys substantial loss carry-forward, it does not, in
the near term, expect to have any impact of the Companys tax position with the
adoption of FIN 48.  7    UNICO, INCORPORATED Notes to the Consolidated Financial
Statements August 31, 2008  NOTE 1  NATURE OF ORGANIZATION AND
SIGNIFICANT ACCOUNTING PRINCIPLES  cont.  h.          Recent
Accounting Pronouncements  In February 2007, the FASB issued Statement
No. 159, The Fair Value Option for Financial Assets and Financial Liabilities,
including an amendment of FASB Statement No. 115 (FAS 159).  FAS 159
permits companies to choose to measure many financial instruments and certain
other items at fair value and establishes presentation and disclosure
requirements designed to facilitate comparisons between companies that choose
different measurement attributes for similar types of assets and liabilities.
 The provisions of FAS 159 become effective as of the beginning of our 2009
fiscal year.  We are currently evaluating the impact that FAS 159 will have
on our financial statements.  In March of 2008, the FASB issued statement
161, Disclosures about Derivative Instruments and Hedging Activities, an
amendment of FASB statement no. 133 (FAS 161).  FAS 161 requires companies
to enhance disclosures about an entitys derivative and hedging activities and
thereby improves the transparency of financial reporting.  The provisions
of FAS 161 become effective as of November 15, 2008.  We are currently
evaluating the impact that FAS 161 will have on our financial statements.  In May of 2008 the FASB issued statement
162, The Hierarchy of Generally Accepted Accounting Principles (FAS 162).
 FAS 162 addresses the principles used in the preparation of financial
statements that are presented in conformity with GAAP.  FAS 162 concludes
that the GAAP hierarchy should reside in the accounting literature established
by FASB thereby directing accounting principles directly to the entity and not
to the auditors as has been done in the past with GAAP literature.  The
provisions of FAS 162 become effective 60 days following the SECs approval.
 The Company believes that FAS 162 will have no effect on its financial
statements.  NOTE 2  RELATED PARTY
DEBENTURES  The Company previously issued convertible
debentures of $645,132 to Ray Brown, a member of the board of directors.
 Ray Brown assigned   $114,466 of his outstanding convertible
debenture to Joseph Lopez, father of the Companys Chief Executive Officer, Mark
Lopez, as satisfaction on a personal loan. These debentures bear interest at 10%
per annum and were due September 2005, and December 25, 2004, respectively. The
debentures are convertible into common stock of the Company at a discount of 20%
off the closing bid price of the common stock on the date of conversion. During
the quarter ending August 31, 2008 the Company paid Ray Brown $11,207 in cash
for interest owed and issued 112,003 shares of common stock for the conversion
of  $12,486 of interest due Ray Brown.  The Company has recorded an
accrued interest payable of $10,174 for Ray Browns debenture and $44,971 for
Joseph Lopezs debenture as of August 31, 2008.  As of the quarter ended
August 31, 2008, the Company owes Mr. Brown $449,514 in principal and $10,174 in
interest, and it owes Joseph Lopez $114,466 in principal and $44,971 in
interest.  In January of 2008 all of the debentures
issued to Compass Capital Corporation, Blue Marble and Reef Holdings totaling
$5,179,954 that remained unpaid by Unico were assigned to Moore Investment
Holdings.  Moore Investment Holdings is controlled by Joseph Lopez, the
father of CEO Mark Lopez. The Company also issued convertible debentures of
$500,000 to Moore Investment Holdings during the fiscal year ending February 29,
2008 for a total due Moore Investment Holdings of $5,679,954. During the quarter
ending May 31, 2008 the Company issued an additional $660,000 of convertible
debentures to Moore Investment Holdings and during the quarter ending August 31,
2008 the Company issued an additional $630,000 of convertible debentures.
 The debentures were issued with terms of 180 days, accrued interest at 8%
per annum, and convertible at a discount of 50% of the closing bid for the
Companys common stock on the date of conversion.  Also, during the quarter
ended August 31, 2008 Moore Investment Holdings assigned a debenture that was
originally issued on February 2, 2007 in the amount of $200,000 to Tuxedo
Holdings.  The summary of outstanding related party
debt of $6,704,739 of which $6,043,924 is in default as of August 31, 2008 is as
follows:   8   UNICO,
INCORPORATED Notes to the Consolidated Financial
Statements August 31, 2008  NOTE 2  RELATED PARTY DEBENTURES 
cont.  Moore Investment Holdings $6,769,954 Ray Brown $449,514 Joseph Lopez $114,466  Total $7,333,934 Less: Discount on debt $629,195 Net related part debt $6,704,739  As of August 31, 2008 the Company has
accrued $591,439 for interest due to related parties in regard to these
outstanding debentures.  NOTE 3  CONVERTIBLE DEBENTURES  In January of 2008 all of the debentures
issued to Compass Capital Corporation, Blue Marble and Reef Holdings totaling
$5,179,954 that remained unpaid by Unico were assigned to Moore Investment
Holdings, a related party.  During the quarters ended May 31, 2008, and
August 31, 2008 the Company issued $1,290,000 of convertible debentures to Moore
Investment Holdings that were used primarily to support subsidiary operations.
 The debentures were issued with terms of 180 days, accrued interest at 8%
per annum, and convert at a discount of 50% of the closing bid for the Companys
common stock on the date of conversion.  During the quarter ended August
31, 2008 Moore Investment Holdings assigned a debenture that was originally
issued on February 2, 2007 in the amount of $200,000 to Tuxedo Holdings.
 During the quarter ending August 31, 2008 Tuxedo Holdings elected to
convert $5,526 of the principal of the debenture and $24,474 of the interest
leaving a balance of $194,474 due on the debenture.  The Company recorded
interest expense of $1,695,148 during the 1st half of fiscal year
2008 associated with the debentures and recorded a loss of $277,818 on the
derivative portion of the debentures.  The net derivative liability as of
August 31, 2008 was $9,873,474.   As of August 31, 2008 the Company
had $269,474 in non-affiliate and $7,333,934 of affiliated convertible
debentures issued and outstanding less discounts of $629,195.  During the quarter
ending August 31, 2008, the Company reduced the amount of the debenture held by
Tuxedo Holdings by $30,000 ($5,526 principal and $24,474 interest) through the
issuance of 500,000 shares of its common stock.  NOTE 4 STOCKHOLDERS EQUITY  Common Stock As of August 31, 2008, the Company had
10,492,729 post reverse shares of common stock issued and outstanding with
4,989,507,271 post reverse shares authorized but unissued.  On June 30,
2008 the Company effected a reverse split of its issued and outstanding common
stock on the basis of one share of common stock to be issued for each 500 shares
issued and outstanding.  As a result of this reverse split all share
figures appearing in this report are generally expressed in numbers of
post-reverse split shares, unless otherwise noted.    During the quarter ended August 31, 2008
the Company issued 500,000 shares of its common stock on the conversion of a
debenture payable plus interest to Tuxedo Holdings totaling $30,000.  During the quarter ended August 31, 2008
the Company issued 112,003 shares of common stock on the conversion of interest
payable to Ray Brown totaling $12,486.  Stock Options  During the year ended February 28, 2007, all stock
options expired unexercised.  As of August 31, 2008, there were no stock
options outstanding.  Preferred Stock  As of August 31, 2008, the Company had
9,800,000 shares of preferred stock issued and outstanding, all of which is
Series A preferred stock. The Series A
Preferred Stock entitle the holder to elect two of the Companys directors and
is convertible into shares of common stock on a 1:1 basis.  9    UNICO, INCORPORATED Notes to the Consolidated Financial
Statements August 31, 2008  NOTE 4 STOCKHOLDERS EQUITY 
cont.  Stock
Payable  During the year ended February 28, 2007,
the Company sold a total of 152,238 shares of restricted common stock to a third
party for total consideration of $999,000.  As of August 31 2008, these
shares had not been issued, resulting in a stock payable of $999,000.  Convertible Debentures  The Company has $7,039,428 of convertible
debentures outstanding that are convertible at a rate of 50% discount of the
closing bid for the Companys common stock on the date of conversion, and it has
$563,980 of convertible debentures outstanding that are convertible at a rate of
20% discount of the closing bid for the Companys common stock on the date of
conversion.  NOTE 5  LEGAL MATTERS  On April 29, 2007, Bromide Basin Mining
Company, LLC was served with a lawsuit filed on April 10, 2008 by Kaibab
Industries, Inc. in Maricopa County, Arizona state court (No. CV2008-008121).
 The plaintiff alleged that Bromide Basin Mining Company, LLC owed $30,000
in rent for the months of May through October 2007, when a mining lease expired.
 The plaintiff also alleged that Bromide Basin Mining Company, LLC failed
to vacate the premises and that it owed an additional $5,000 per month as a
holdover tenant commencing November 1, 2007 until it vacated the premises.
 The plaintiff also asked for interest, attorneys fees and court costs.
 Bromide Basin Mining Company, LLC vacated the premises at the termination
of the mining lease.  The Company settled this lawsuit in July 2008 for
$30,000.  On August 14, 2008, Unico shareholders Randall Sullivan,
Barry Raykoske, and Jack Reilly filed a derivative lawsuit on behalf of Unico
against Ray C. Brown, Kenneth C. Wiedrich, Mark A. Lopez, Shane Traveller,
Javelin Advisory Group, Inc., and Unico (as a nominal defendant) in the Superior
Court of the State of California, San Diego County Central Division (Case No.
37-2008-0008901-CU-PN-CTL).  The plaintiffs allege that the named
defendants breached fiduciary duties owed to Unico, and were negligent in the
approval of certain financing transactions entered into on behalf of Unico.
 The plaintiffs seek no less than $20 million in damages from the named
defendants, as well as injunctive relief, interest, attorney's fees, and court
costs.  Plaintiffs are seeking a determination that they are appropriate
representatives of Unico shareholders to bring a derivative suit, which is a
prerequisite to bringing such a claim under California Corporations Code section
800.  The defendants deny any liability, and are defending the lawsuit.  On September 30, 2008, a lawsuit was filed
by Cache Valley Electric Company against Unico, Incorporated in the Third
Judicial District Court for Salt Lake County, State of Utah (Case No. 080921346)
in which the plaintiff alleges that it provided goods and services to Unico in
the amount of $191,615.82, for which it has not received payment.  The
plaintiff alleges that Unico breached the contract by failing to pay for the
goods and services, and is seeking a money judgment against Unico in the amount
of $191,615.82 together with interest thereon at the statutory rate and court
costs.  Unico intends to negotiate a settlement of the lawsuit.  NOTE 6  SUBSEQUENT EVENTS  Subsequent to the quarter ending August 31,
2008, the Company received $150,000 through the issuance of new convertible
debentures.  The new debentures were issued with terms of 180 days, bear
interest at the rate of 8% per annum, and are convertible by the holder into
shares of the Companys common stock at a discount of 50% of the closing bid
price on the date of conversion.  Subsequent to the quarter ended August 31,
2008 the Company issued 134,150 shares of common stock on the conversion of $558
principal and $10,174 interest payable to Ray Brown totaling $10,732.  Subsequent to the quarter ended August 31,
2008 the Company issued 1,000,000 shares of its common stock on the partial
conversion of a debenture payable plus interest to Tuxedo Holdings totaling
$45,000.  The conversion of interest and principal reduced the amount due
on the original debenture of $200,000 to $151,044.  10    UNICO, INCORPORATED Notes to the Consolidated Financial
Statements August 31, 2008  NOTE 6  SUBSEQUENT EVENTS
 -cont.  Subsequent to the quarter ending August 31,
2008 the Company issued 680,050 shares of common stock to a third party
consultant under an S- 8 registration statement in exchange for services valued
at $64,605.  NOTE 7  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 $64,014,398 from its inception through
August 31, 2008.   It has not established any revenues with which to
cover its operating costs and to allow it to continue as a going concern.  During the next 12 months, the Companys
plan of operation is to raise approximately $3,500,000 for investment into its
subsidiary companies: Deer Trail Mining Company and Silver Bell Mining Company.
The funds are intended for the following purposes during the next twelve months:  § Continue sampling and
analyzing mineralized rock samples, stockpiles and dump material from the Deer
Trail Mine to evaluate the most efficient means to conduct future mining and
milling activities; § Expand metallurgical
research department at the Deer Trail Mine and Mill Facility; § Purchase additional lab
equipment for metallurgical purposes; § Upgrade mine
infrastructure and begin underground mining activities including maintenance and
rehabilitation work at the Deer Trail Mine; § Continue to upgrade and
complete the re-construction project on the existing mill at the Deer Trail
Mine; § Upgrade the crushing
facility at the upper Deer Trail Mine and continue screening the ore dumps; § Begin milling and
processing activities at the Deer Trail Mill and Processing Facility; § Acquire new mining
equipment including a crushing unit to improve operations at the Deer Trail
Mine; § Conduct additional
survey and mapping work on the Clyde and Crown Point mining claims including
improvements to the property and potentially underground and surface exploratory
drilling on the claims; and Commence a feasibility study on the potential of the mining claims
at the Silver Bell Mine beginning in the Spring of
2009. Accomplishing the
12-month plan of operations is dependent on: (a) the Company raising
approximately $3,500,000 in equityand/or
debt financing during the next 12 months to be used for the Companys
operations, of which approximately $2,500,000 is needed in the next 120 days.
 Subsequent to the quarter ending August 31, 2008, the Company received
$150,000 through the issuance of new convertible debentures to Moore
Investments.  The new debentures were issued with terms of 180 days, bear
interest at the rate of 8% per annum, and are convertible by the holder in
shares of the Companys common stock at a discount of 50% of the closing bid
price on the date of conversion.  The Company intends to raise
approximately an additional $3,350,000 during the fiscal year ending February
28, 2009 to fulfill the 12-month plan.  11


Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations.  Forward-Looking Statements.  When used in this Form 10-Q, 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-Q 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 32 patented claims (including mill sites)
and 170 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.  Effective December 1, 2001, a new lease agreement was
entered into between the parties (Deer Trail Lease) covering the same property
for a period of thirty (30) months. It was subsequently extended through a
series of amendments.  In July 2007, Deer Trail Mining Company completed the purchase of the claims
covered by the Deer Trail Lease.  A total of $4,000,000 was paid to
purchase the property over a period of approximately three years.  The
purchase of the claims also included the purchase of a fifty percent (50%)
interest in Water Right No. 63-37, said fifty percent (50%) portion including a
maximum flow of 0.125 cubic feet of water per second and a maximum annual
diversion of 90.5 acre feet of water from Three Mile Spring for year-round
mining purposes.  The purchase of the claims also included a fifty percent
(50%) interest in a contractual right to use water diverted under Water Right
No. 63-3043 as evidenced and described in the Agreement between Cottonwood
Irrigation Company and Deer Trail Development Corporation dated July 28, 1977.
 The fifty percent (50%) interest in the contractual water right allows
Deer Trail Mining Company to truck not more than 2,500 gallons of water per week
from the Cottonwood Creek to the Deer Trail Mine for mining activities during
the irrigation season (April 15 to October 15), and possibly more during the
remaining portion of each year.


12


Deer Trail
Mining Company also obtained a lease from Crown Mines, L.L.C. of the remaining
fifty percent (50%) interest in Water Right No. 63-37 and the remaining 50%
interest in the contractual water right (Water Right 63-3043.  The lease is
for an initial term of 5 years for no rent.  The lease may be terminated by
Crown Mines, L.L.C. upon 12 months written notice if Crown Mines determines
that the water rights covered by the lease are necessary for the operation and
development of any of Crown Mines mining claims or for other permitted uses.
 The lease may be extended if Crown Mines determines that the water rights
covered by the lease are not required for the operation and development of any
of Crown Mines mining claims or for other permitted uses during the extension
period, provided that the parties can agree on other terms including a price or
rent for the extended term.  Crown Mines, L.L.C. retained a perpetual
royalty interest on minerals taken from the claims purchased by Deer Trail
Mining Company.  The perpetual royalty is three percent (3.0%) of net
smelter returns on minerals other than gold.  The royalty rate for gold is
three percent (3.0%) when the price of gold is less than or equal to $500 per
troy ounce, four percent (4.0%) when the price of gold is more than $500 and
less than or equal to $600 per troy ounce, and five percent (5.0%) when the
price of gold is greater than $600 per troy ounce.  Crown Mines, L.L.C.
also retained an undivided three percent (3.0%) interest in any oil and gas and
associated hydrocarbons produced from the claims.  Crown Mines, L.L.C. also retained an access
easement and a water line pipeline easement across the claims sold to Deer Trail
Mining Company.  Deer Trail Mining Company has agreed to
provide Crown Mines, L.L.C. with information obtained as a result of Deer Trail
Mining Companys exploration activities on the claims, and Deer Trail Mining
Company granted to Crown Mines, L.L.C. a right of first refusal to repurchase
the claims or any portion thereof.  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.  In September 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 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 14 full time employees, 1 part
time employee and 4 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.


13


Prior to June
2004, Unico worked to reopen the Deer Trail Mine.  Unico commenced limited
mining activities in late March 2001 on the Deer Trail Mine.  There were
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 was
stock-piled and some of it has been crushed.  Some of the employees have
worked on mine maintenance.  Unico completed a mill on site at the Deer
Trail Mine. In November 2001, Unico began milling activities. Shortly
thereafter, operations were suspended to accommodate a plan to reconstruct the
entire facility. Currently the Deer Trail Mining Company is reconstructing the
mill and processing facility to enhance both productivity and efficiency. The
reconstruction project is now in its final stages of completion.  In July
2006, Deer Trail Mining Company completed the upgrades to the screening plant
and began screening the ore dumps at the upper Deer Trail Mine. Once screened,
the material is moved to the mill facility and stockpiled for further
processing. The Company anticipates running this material through its mill once
reconstruction is complete.  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.  The Company is currently in contact with
several smelters and a trading company to determine how best to sell the lead
concentrates, and zinc concentrates which will be produced by the 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


Hole
Interval
from - to   
        (ft)
Gold(grams/troy oz.)
Silver(grams/troy oz.)
Lead
(%)
Zinc
(%)RC-1
190  230
          40
0.207
10.98
0.355
0.205RC-2
40 - 45     
           5
0.364
95.36
3.61
0.390Includes
175 - 180   
         5
0.369
45.71
2.87
1.41RC-10
65 - 95  
            30
0.363
16.48
0.086
0.022RC-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  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, and
plans to ship its core samples to an independent lab for analysis.  In March 2006, Deer
Trail Mining Company, LLC entered into an agreement with Behre Dolbear and
Company (USA), Inc. to conduct geological services and consulting at Unicos
Deer Trail Mine in Marysvale, Utah. A  report titled: RELATIONSHIP OF
STRATIGRAPHY AND MINERALIZATION AT THE LOWER (NEW) DEER TRAIL MINE, PIUTE
COUNTY, UTAH (BEHRE DOLBEAR PROJECT 06-034)was submitted by Behre Dolbear as final to the Company on September 18,
2008 and the report summary is included here as follows:


15


UNICO, Inc. (UNICO) engaged Behre
Dolbear & Company (USA), Inc. (Behre Dolbear) as of 15 March 2006 to
lithologically log 7,235 feet of drill core at the Deer Trail Mine, select
samples for analysis, submit those samples to a laboratory for analyses, and
evaluate and interpret those logs and analyses. Deer Trail Mining Company, LLC
(Deer Trail Mining), and Behre Dolbear agreed to a revised and expanded work
scope in Work Change Order No. 1 in a letter dated 7 November 2006. That Work
Change Order stated that Behre Dolbears ongoing work must have the primary
objective of adding value to the Deer Trail Mine and related project assets in
the short term. The work change order included provisions for completing the
logging, correlating, and summarizing the results of the logging and analyses,
and correlating that data with data from past drilling and mining to locate and
model, to the extent possible, potentially mineable mineralization. The work
change order also included provisions for evaluating the volume, tons, and grade
of a tailings deposit at the mine. The tailings evaluation is the subject of a
separate report.  Under a contract with Deer Trail Mining,
Connors Drilling, LLC drilled 7,235 feet of BQ diameter (1.433 inches) core in
13 holes (UDDH #1-13) at various inclinations and azimuths from three drill
stations in the Patrick Thomas Henry (PTH) Tunnel (actually an adit) in the
Lower Deer Trail Mine which concluded in October 2005. This is the core that
Behre Dolbear was engaged to log, analyze, and evaluate.  Table 1 summarizes the drilling statistics.
 The station locations are defined based on the approximate footage from
the PTH adit portal. Table 1 Unico Phase II Drill Holes  UDDH Drill
Hole #
Station
Location
Inclination
(in degrees)
Azimuth
Total Length
(Feet)1*
4400
-45
102
7402
4400
-40
102
6483*
4400
-42
92
7824*
4400
-42
150
5545*
4400
-55
102
6646
4400
-45
21
4097
4400
-58
298
7338
4400
-75
300
5659*
4700
-45
116
46010
4900
-75
0
46011*
3400
+45
258
45412*
3400
+45
162
35513*
3400
-65
125
420Total Footage



7,235 *Logged by Behre Dolbear  The Deer Trail Mine is situated on 3,275
acres of patented and unpatented claims located in the Deer Trail
Mountain-Alunite Ridge area of Piute County, Utah, approximately 5 miles
south-southwest of the town of Marysvale. The Deer Trail Mine consists of the
Upper Deer Trail Mine and the Lower Deer Trail Mine. The Upper Deer Trail Mine
is hosted by the Permian Toroweap Sandstone and lies about 800 stratigraphic
feet above the Lower Deer Trail Mine. The Lower Deer Trail Mine is hosted by the
Pennsylvanian Callville Limestone.  At the Deer Trail Mine, the Callville
Limestone is an approximately 1,000-foot thick sequence of sandy to very sandy
limestone, dolomite, and sandstone. Two separate stratabound, manto-type
deposits were developed and mined in the Lower Deer Trail from about 1945 to
1980. The locations of the deposits are referenced based on their distance from
the portal of the PTH Tunnel. One is hosted by the Callville Limestone, was
mined in the 3400 Area of the mine, and is known as the 3400 East Stope. The
3400 East Stope deposit extends northwestward a minimum of 1,000 feet along
strike from the mined area to at least the 4400 Area and at least 400 feet
further southeastward to what would be the 3000 Area. The other deposit mined
from the PTH Tunnel occurs in the 8600 Area of the mine and is the down-faulted
portion of the Toroweap Sandstone deposit mined in the Upper Deer Trail Mine.  Behre Dolbears work yielded three targets
within the PTH Tunnel of the Lower Deer Trail Mine that maymerit further
exploration. Behre Dolbear believes that there is the possibilitythat
with additional successful follow-up drilling, a resource base may eventuallybe established within the PTH Tunnel. The components of this potential
resource base are composed of stratabound, multiple thin (<10 feet),
moderate- to high-grade zones as well as lower-grade (10 to 30 foot) zones and


16


horizons of base
and precious metals mineralization. Two of these are hosted by the Callville
Limestone and one occurs in the Toroweap Sandstone.  Behre Dolbears field work on the project
took place between 23 March 2006 and 3 March 2007 and resulted in the generation
of a large amount of stratigraphic and analytical data. That data were compiled
and evaluated by Behre Dolbear at the Deer Trail Mine and in Denver, Colorado.
This report is based on the following:   on-site logging of
7,235 feet of underground core  evaluation of 978
individual sample analyses and assays from 2,021.5 feet of the above core  development of a
detailed stratigraphic succession for the Pennsylvanian Callville Limestone and
its integration with the mineralized intercepts from the core drilling  review of all
pertinent reports and other data related to past exploration at the mine by
other companies since 1945  meetings and
discussions with and data from the Unico, Inc. and Deer Trail Mining personnel;
and  a limited review of
the published literature on the geology of the region, district, and the
Marysvale, Utah, area.  Following logging, sample selection, and
splitting of the core by sawing at the Deer Trail Mine the samples were sent to
the ALS Chemex (Chemex) laboratory in North Vancouver, British Columbia, for
sample preparation, analyses, and assays.  Table 2 shows that significant
mineralization in most of the holes is confined to relatively narrow intervals
ranging from 1.0 feet to 10.6 feet.  The thickest intercept with
significant mineralization is in UDDH 12 at 55.2 feet.  The intervals are
uncorrected for the true widths of the intercepts and will all be thinner than
stated, some possibly as much as fifty percent thinner.  Overall, silver
contributes the most value of the metals in Table 2 with zinc second and gold,
copper, and lead contributing subordinate values.  In some of the
intervals, the silver and gold are high but the base metals are low.
 Copper contributes more value than zinc in some of these intervals.
 Only one of the intervals (UDDH 11 at 105.0 to 110.6 feet) has high values
in all of the metals.  The highest gold and silver values are in UDDH 1
(5.273 ppm Au=0.167oz/t Au; 366.9 ppm Ag= 10.71 oz/t Ag), and UDDH 11 (4.564 ppm
Au= 0.133 oz/t Au; 585.1 ppm Ag= 17.08oz/t Ag).  Table 2 Best Interval from Each Analyzed
Hole  UDDH
Analyzed
From
Analyzed
To
Interval
(Feet)
Au
(ppm)
Ag
(ppm)
Cu
(%)
Pb
(%)
Zn
(%)1
365.5
370.4
4.9
5.723
366.9
0.01
0.16
0.42406.6
417.2
10.6
1.062
177.6
0.11
0.58
1.58456.0
462.5
6.5
0.350
156.4
0.24
1.38
2.085
322.0
327.0
5.0
0.870
164.1
0.25
2.09
1.27419.0
419.9
0.9
1.510
116.0
0.27
0.35
0.189
293.7
300.1
6.4
0.372
46.8
0.15
1.28
1.78434.6
435.6
1.0
0.310
102.0
0.39
5.20
6.5911
7.7
13.4
5.7
4.564
585.1
0.45
0.71
0.83105.0
110.6
5.6
1.600
550.6
0.96
2.0
2.4312
5.8
61.0
55.2
0.608
183.1
0.44
0.40
0.67220.0
221.9
1.9
2.170
128.0
0.01
0.01
3.3213
77.9
78.9
1.0
0.380
188.0
0.60
3.10
3.89  Detailed logging of the holes developed a
coherent stratigraphic succession consisting of multiple readily recognizable
gross units.  Behre Dolbear defined nine provisional members and three
sub-members (facies) of the Callville Limestone based on their lithologic
character, accessory components, and color in the immediate vicinity of the Deer
Trail Mine.  The provisional members are called Informal Members of the
Pennsylvanian Callville Limestone.  The names and letter codes of these
Informal Members from youngest to oldest are:


17


 Orange and Gray Sandy Informal Member (OGS) (which may be basal
Toroweap Sandstone); 
Upper White Ann and Quartzite Informal Member (UWAQ); 
Cherty Black Ann Informal Member (CBA); 
Upper Division of Lower White Ann and Quartzite Informal Member (UD-LWAQ); 
Upper Dark Lentil Informal Member (UDL); 
Lower Division of Lower White Ann and Quartzite Informal Member (LD-LWAQ); 
Lower Dark Lentil Informal Member (LDL); 
Major Quartzite/Big Sandy Zone Informal Member (MQ/BSZ ); and 
Lower Carbonate and Quartzite Informal Member (LCAQ).  The grades of the five precious and base
metals (gold, silver, copper, lead, and zinc) vary considerably among the
analyzed intervals. In order to compare intervals, Behre Dolbear used average
metal prices over the past 12 quarters (3 years) from the second quarter of 2004
through the first quarter of 2007 to calculate equivalent grades of silver (opt
equiv. Ag) and zinc (percent equiv. Zn), the dominant metals in the deposit. A
dollar value was also calculated. The average metal prices used are:   gold, $503 per ounce  silver, $9.02 per
ounce  copper, $2.12 per
pound  lead, $0.51 per pound  zinc, $0.95 per pound  Behre Dolbear did not use the grades or the dollar values
for an economic evaluation of the Deer Trail deposit. Behre Dolbear divided the
composited analyses and assays of significant mineralization into two classes,
Potentially Mineable Intercepts and Significantly Mineralized Intercepts. Behre
Dolbear developed two figures showing the frequency of these intercepts in the
Informal Members of the Callville Limestone stratigraphy and in various
mineralized horizons. The two classes of intercepts are tabulated by area in the
mine and by stratigraphic Informal Member in Tables 1.1 and 1.2.   POTENTIALLYMINEABLEINTERCEPTS BYAREA ANDSTRATIGRAPHICHORIZON TABLE1.1  Drill Hole
Number
(UDDH#)
Area
Stratigraphic
Unit
From
(feet)
To
(feet)
Thickness
(feet)
True
Thickness
(feet)
Ag. Equiv.
(opt)
Zn Equiv.
(%)
Dollar Value
($)11
3400
MQ/BSZ
8.6
13.4
4.8
3.7
32.36
15.32
$290.0011
3400
LDL
103.3
112.0
8.7
7.5
21.30
10.11
$192.1412
3400
MQ/BSZ
5.8
61.0
55.2
33.0
10.54
5.00
$95.0812
3400
UD-LWAQ
220.0
230.3
10.3
5.2
6.79
3.22
$61.2113
3400
LCAQ
77.9
82.6
4.7
4.4
10.49
4.98
$94.651
4400
MQ/BSZ
365.5
377.2
11.7
10.3
9.37
4.45
$84.501
4400
MQ/BSZ
406.6
417.2
10.6
9.6
11.40
5.41
$102.831
4400
LCAQ
442.2
462.5
20.3
17.2
9.23
4.38
$83.232
4400
MQ/BSZ
378.0
385.9
7.0
6.6
25.39
12.06
$299.062
4400
MQ/BSZ
417.9
425.5
7.6
6.8
17.05
8.10
$153.832
4400
LCAQ
540.3
564.0
23.7
22.1
7.70
3.66
$69.503
4400
MQ/BSZ
395.0
410.7
15.7
13.4
7.97
3.78
$71.853
4400
MQ/BSZ &
LCAQ
395.0
476.7
81.7
69.9
3.52
1.67
$31.785
4400
LDL
322.0
325.3
3.3
3.2
17.27
8.20
$155.756
4400
MQ/BSZ
374.0
378.5
4.5
3.2
6.91
3.28
$62.307
4400
LCAQ
616.3
624.7
8.4
7.3
12.33
5.85
$111.1810
4400
CBA
96.7
135.4
38.7
30.5
7.37
3.50
$66.4810
4400
LDL &
MQ/BSZ
283.7
295.0
11.3
9.8
7.33
3.48
$66.14


18


The thickest Potentially
Mineable Intercepts are in UDDH #12 in the 3400 Area and in UDDH #1, 2, and 10
in the 4400 Area (Table 1.1). The interval in UDDH # 3 from 395.0 to 476.7 is
shown because of its thickness (69.9 feet true thickness). Behre Dolbear does
not classify that intercept as a Potentially Mineable Intercept because its
equivalent grades and dollar value do not reach the levels of the other
intervals in that classification. UDDH #11 (3400 Area) has two widely separated
intervals with true thicknesses of 3.7 feet and 7.5 feet. Although these
intervals are relatively thin, the silver and gold grades are high. The 3.7 foot
interval has the highest weighted average silver and gold grades in any of these
Potentially Mineable Intercepts at 19.0 troy ounces per ton (opt) Ag and 0.15
opt Au.  UDDH # 1, 2, 10, and 12 have one to two moderately thick
Potentially Mineable Intercepts in addition to the thicker intercepts cited
above. These moderately thick intercepts range from approximately 5 to 10 feet
in true thickness. UDDH # 5, 6, 7, and 13 have single thinner intercepts,
ranging from approximately 3 to 7 feet in true thickness. Thicker intervals are
needed for these intervals to be actually mineable.  POTENTIALLY MINEABLE INTERCEPTS BY AREA
AND STRATIGRAPHIC HORIZON  TABLE 1.2  Drill Hole
Number
(UDDH#)
Area
Stratigraphic
Horizon
From
(feet)
To
(feet)
Thickness
(feet)
True
Thickness
(feet)
Ag. Equiv.
(opt)
Zn Equiv.
(%)
Dollar
Value
($)12
3400
UD-LWAQ
194.0
195.3
1.3
0.7
9.57
4.54
$86.281
4400
UD-LWAQ
276.8
277.3
0.5
0.4
23.19
11.01
$209.151
4400
LCAQ
545.0
546.9
1.9
0.9
45.73
21.71
$412.443
4400
LCAQ
588.6
590.6
2.0
1.5
16.30
7.74
$147.004
4400
MQ/BSZ
337.6
338.6
1.0
0.6
185.4
88.08
$1,673.574
4400
LCAQ
532.7
533.7
1.0
0.6
16.14
7.66
$145.576
4400
UD-LWAQ
184.0
185.0
1.0
0.8
22.49
10.68
$202.896
4400
MQ/BSZ
374.0
378.5
4.5
3.2
6.91
3.28
$62.307
4400
MQ/BSZ
389.0
390.0
1.0
0.5
6.55
3.11
$59.137
4400
MQ/BSZ
401.4
402.8
1.4
0.9
14.58
6.92
$131.498
4400
UD-LWAQ
223.3
224.3
1.0
0.8
25.78
12.24
$232.578
4400
MQ/BSZ
252.3
254.4
2.1
1.8
162.03
76.92
$1,451.498
4400
LCAQ
538.9
539.9
1.0
0.8
10.89
5.17
$98.249
4400
UDL
293.7
294.3
0.6
0.4
36.63
19.42
$256.419
4400
MQ/BSZ
434.6
435.6
1.0
0.8
23.13
12.27
$161.9310
4400
LCAQ
377.7
379.7
2.0
1.8
11.02
5.23
$99.40  Significantly Mineralized Intercepts (Table
1.2) are intercepts of higher grade, but not of potentially mineable thickness.
Thus they do not represent mineralization that can be mined, milled, and refined
at a profit. True thicknesses of these intercepts range from 0.4 to 1.8 feet.
Grades range from 185.4 opt equiv. Ag and 88.08% equiv. Zn in UDDH #4 to 6.55
opt equiv. Ag and 3.11% equiv. Zn in UDDH #7 (Table 1.2).  Summary graphic logs of each of the 13 UDDH drill holes
are in Appendix 6.0. These logs show the Informal Members of the Callville
Limestone and histograms of the silver and zinc equivalent thicknesses and
grades. Along with Appendix 7.0, the graphic logs clearly show and summarize the
overall relationship of stratigraphy and mineralization.  Behre Dolbear believes that the thickness
and permeability of the Major Quartzite/Big Sandy Zone Informal Member (MQ/BSZ)
have played a major role in the localization of three of the four most
vertically and laterally persistent mineralized zones in the Lower Deer Trail
Mine. These three zones occur within the MQ/BSZ Informal Member and straddle its
contacts with the overlying Lower Dark Lentil Informal Member (LDL) and the
underlying Lower Carbonate and Quartzite Informal Member (LCAQ). Behre Dolbear
calls this horizon the MQ/BSZ Horizon.  The zones within the MQ/BSZ Horizon are
named the 3400 East Stope Zone, the DeBie Zone, and the Rosa de Marcos Zone.
These zones extend from the 3400 to the 4400 Areas and arguably possess the
highest overall average base and precious metal grades present in the Callville
Limestone. The only major mineralized horizon that has been mined that does not
occur in the MQ/BSZ Horizon is in the UDL Member in the 200 Level workings.


19


All samples were
analyzed for a 34-element suite of major and potentially significant trace
elements that may serve as pathfinders to the metals of economic interest.
 These trace pathfinder elements are part of the alteration and
mineralizing process but may be more wide-spread than gold, silver, copper,
lead, and zinc and therefore may serve as guides to valuable mineralization.
Anomalous levels of the five base and precious metals are the best pathfinders
for those same metals. The pathfinder trace elements at the Deer Trail Mine
include arsenic, barium, bismuth, fluorine, manganese, mercury, molybdenum,
tungsten, and yttrium. Manganese is the most significant pathfinder, and there
is a strong association between manganese-rich lithologies and significant- to
high-grade base and precious metal intercepts.  In the SUMMARY OF CONCLUSIONS AND
RECOMMENDATIONS,the report states thatBehre Dolbears work
yielded three targets within the PTH Tunnel of the Lower Deer Trail Mine that
maymerit exploration.  Two of these are hosted by the Callville
Limestone and one occurs in the Toroweap Sandstone.  The 3400 Area is the most prospective of
the three potential exploration targets.  Behre Dolbear defines the 3400
Area as encompassing the 3400 East Stope, the approximately 200 horizontal feet
between it and UDDH #11 and #12 and the immediate environs of the latter 2
holes. The target is the MQ/BSZ Member of the Callville Limestone, particularly
the mineralized zones occurring at the MQ/BSZs upper and lower extremities that
respectively correspond to the 3400 East Stope and Rosa de Marcos Zones.
 That span of mineralized strata is called the MQ/BSZ Horizon.  The potential of the 3400 Area is suggested
by the following:   Weighted average
grades calculated from all the Potentially Mineable Intercepts are 0.033 opt Au,
4.99 opt Ag, 0.22% Cu, 0.72% Pb, and 1.01% Zn.  The preceding are
suggestive of the tenor of mineralization that mightbe extracted from
zones in the 3400 and 4400 Areas;   The preceding grades
are similar to but lower than the reported grades from the 3400 East Stope bulk
sample (0.055 opt gold, 8.40 opt silver, 0.289% copper, 1.58% lead, and 1.65%
zinc) and lower than the grades from both the bulk sample and the combined past
mining at all levels within and below the PTH Tunnel in the 3400 Area (0.19 opt
Au, 13.62 opt Ag, 0.61% Cu, 2.96% Pb, and 7.21% Zn);   Although the weighted
average grades of all the Potentially Mineable Intercepts are lower than the
grades from past mining and the bulk sample, the three individual intercepts in
UDDH #11and #12 in the 3400 Area have Potentially Mineable grades and
thicknesses; and   Underground workings
already exist in the favorable MQ/BSZ Horizon in the 3400 Area. The favorable
horizon can be drilled with relatively short holes, making the 3400 Area a more
prospective exploration target than the 4400 Area.  To decide if exploration in the 3400 Area
mineralization is warranted, initial attention should focus on determining if
the intercepts in UDDH #11 and #12 within the Rosa de Marcos Zone, the DeBie
Zone, and the 3400 East Stope Zone are economic. If they are, follow-up drilling
should initially key in on those two holes, preceded by underground surveying,
mapping and sampling and development of cross sections at right angles into a
three-dimensional model.  The 4400 Area is the second of the
potential exploration targets. The main targets are hosted by the MQ/BSZ
Horizon. These targets are located approximately 200- to 300-feet below the main
level of the PTH Tunnel. Specific exploration targets in the MQ/BSZ Horizon are
shown by holes UDDH #1, #2, and #3.  In addition to the Potentially
Mineable Intercepts located here, many of the Significantly Mineralized
intercepts drilled at this location may be laterally correlative with thicker
intercepts, thus expanding the zones where Potentially Mineable mineralization
may exist. Exploration in the 4400 Area would be contingent upon developing
mineral resources and mineral reserves in the 3400 Area and successfully mining
them.  If expanded work in the 4400 Area is
justified, it should focus on the MQ/BSZ Horizon and entail the same surveying,
mapping, sampling, and development of a three-dimensional model as recommended
in the 3400 Area. In particular, the Noranda drill logs should be reinterpreted
and correlated with the Callville Limestone stratigraphy defined by Behre
Dolbear. Deeper mineralization in the CBA Informal Member of the Callville
Limestone is another potential exploration target in the 4400 Area.


20


The 8600 Area is the third potential
exploration target. Mineralization is hosted by the Toroweap Sandstone rather
than the Callville Limestone. Features recommending the target include:   All tonnage (about
66,000 tons) mined here between 1963 to late 1980 averaged 0.099 opt Au, 10.80
opt Ag, 12.76% Zn, 7.47% Pb, and 0.21% Cu ; and   The grades for the
last mining during 1980 were slightly lower but still potentially economic
(0.032 opt Au, 4.60 opt Ag, 5.30% Zn, 4.10% Pb, and 0.15% Cu). Access to the 8600 Area is poor, and
federal regulations would require additional connections to the surface before
mining could be resumed. Behre Dolbear recommends that UNICO should first
determine current mining and milling costs for the 8600 Area mineralization
before estimating the size and grade potential in that area.  Behre Dolbear points out that there are
mitigating factors that UNICO/Deer Trail should take into account in making its
exploration decisions on the targets located in the 3400, 4400, and 8600 Areas.
The most significant of these include the following:  
Behre Dolbear cannot predict whether additional exploration will find grades
similar to those in UDDH #1-13, the bulk sample, or past mining;  
The silver and zinc equivalent grades and the associated dollar values of the
Potentially Mineable Intercepts are calculated from highly variable amounts of
gold, silver, and base metals in the different intervals;  
Silver and zinc equivalent grades do not indicate the variability of the five
metals;  
Given the variability of the five potentially valuable metals, it may be
difficult to maintain a uniform mill feed of these five metals in a mining
operation;  
Noranda Exploration, Inc. concluded that milling followed by a cyanide vat-leach
process to recover onlygold and silver would be marginally more economic
than recovering the gold, silver, and base metals in a flotation concentrate to
be smelted and refined, further indicating the variability and generally low
grades of the base metals over mineable widths; and  
Behre Dolbear has not estimated tonnages of mineralized material or mining and
processing costs.


21


TABLE
7.1 STRATIGRAPHIC TOPS (BOLD) AND UNCORRECTED
THICKNESSES (PARENTHESES) OF INFORMAL MEMBERS OF THE PENNSYLVANIAN CALLVILLE
LIMESTONE, DEER TRAIL MINE, PIUTE COUNTY, UTAH  Hole #
OGS
UWAQ
CBA
UD-LWAQ
UDL
LD-LWAQ
LDL
MQ/BSZ
LCAQUDDH #1
-45o/102o
740  ft
0 ft*
(44.8 ft)
44.8 ft
(65.0 ft)
109.8 ft
(77.7 ft)
187.5 ft
(103.2 ft)
290.7 ft
(17.1 ft)
307.8 ft
(26.2 ft)
334.0 ft
(19.0 ft)
353.0 ft
(64.2 ft)
417.2 ft
(322.9 ft)UDDH #2
-40o/102o
654 ft
0 ft*
(50.5 ft)
50.5 ft
(63.8  ft)
114.3 ft
(82.2 ft)
196.5 ft
(112.3 ft)
308.8  ft
(9.4 ft)
318.2 ft
(29.6 ft)
347.8 ft
(17.3 ft)
365.1 ft
(65.0 ft)
430.1 ft
(217.9 ft)UDDH #3
-42o/92o
782 ft
0* ft
(58.4 ft)
58.4 ft
(65.3 ft)
123.7 ft
(78.0 ft)
201.7 ft
(127.2 ft)
328.9 ft
(11.7 ft)
340.6 ft
(28.5 ft)
369.1 ft
(24.3 ft)
393.4 ft
(67.4 ft)
460.8 ft
(321.2 ft)UDDH #4
-42o/150o
554 ft
0 ft*
(63.3 ft)
63.3 ft
(69.3 ft)
132.6 ft
(80.1 ft)
212.7 ft
(59.1 ft)
271.8 ft
(11.6 ft)
283.4 ft
(26.9 ft)
310.3 ft
(19.3 ft)
329.6 ft
(84.1 ft)
413.7 ft
(140.3 ft)UDDH #5
-55o/102o
664 ft
0 ft*
(40.6 ft)
40.6 ft
(63.6 ft)
104.2 ft
(66.1 ft)
170.3 ft
(78.2 ft)
248.5? ft
(9.0 ft)
257.5? ft
(34.0 ft)
291.5 ft
(35.5 ft)
327.0 ft
(76.1 ft)
403.1 ft
(260.9 ft)UDDH #6
-45o/21o
409 f t
0 ft*
(75.2 ft)
75.2 ft
(56.9 ft)
132.1 ft
(6.9 ft)
139.0 ft
(94.7 ft)
233.7 ft
(7.7 ft)
241.4 ft
(27.6 ft)
269 ft
(42.6 ft)
311.6 ft
(71.7 ft)
383.3 ft
(25.7 ft)UDDH #7
-58o/298
733 ft
0 ft*
(42.6 ft)
42.6 ft
(56.1 ft)
98.7 ft
(43.8 ft)
142.5 ft
(125.1 ft)
267.6 ft
(13.8 ft)
281.4 ft
(54.9 ft)
336.3 ft
(32.9 ft)
369.2 ft
(106.5 ft)
457.7? ft
(257.3 ft)UDDH #8
-75o/298o
565 ft
0 ft*
(40.9 ft)
40.9? ft
(15.4 ft)
56.3? ft
(47.7 ft)
104.0 ft
(82.3 ft)
186.3 ft
(8.4 ft)
194.7 ft
(33.6 ft)
228.3 ft
(11.8 ft)
240.1 ft
(82.8 ft)
322.9 ft
(242.1 ft)UDDH #9
-45o/116o
460 ft
0 ft*
(73.4 ft)
73.4 ft
(28.6 ft)
102.0 ft
(46.3 ft)
148.3 ft
(138.4 ft)
286.7 ft
(11.2 ft)
297.9 ft
(17.7 ft)
315.6 ft
(8.5 ft)
324.1 ft
(115.1 ft)
439.2 ft
(20.8 ft)UDDH #10
-75o/0o
459 ft
0 ft*
(47.8 ft)
47.8 ft
(48.9 ft)
96.7 ft
(39.3 ft)
136.0 ft
(77.6 ft)
213.6 ft
(9.3 ft)
222.9 ft
(33.6 ft)
256.5 ft
(32.6 ft)
289.1 ft
(67.1 ft)
356.2 ft
(102.8 ft)UDDH #11
+45o/258o
454 ft
454.9 ft***
(90.6 ft)
363.4 ft
(27.7 ft)
335.7 ft?
(71.7 ft)
264.0 ft
(104.6 ft)
159.4? ft
(9.8 ft)
149.6? ft
(29.2 ft)
120.4? ft
(16.3 ft)
104.1 ft**
(104.1 ft)
CAHUDDH #12
+45o/162o
355 ft
355.0 ft***
(28.5 ft)
326.5 ft
(30.9 ft)
295.6??
(7.7 ft)
287.9?? ft
(157.9 ft)
130.0?? ft
(7.8 ft)
122.2?? ft
(26.7 ft)
95.5?? ft
(108.0 ft)
77.5 ft**
(77.5 ft)
CAHUDDH #13
-65o/125o
420 ft
CBH
CBH
CBH
CBH
CBH
CBH
CBH
CBH
0 ft*
(420.0 ft)   *True stratigraphic top lies above drill collar. **True stratigraphic top lies below drill collar. *** True stratigraphic top lies above end of
up-hole. CBH  Down-hole drilled at negative angle collared
stratigraphically below base of horizon or Informal Member. CAH  Up-hole drilled at positive angle collared
stratigraphically above top of horizon or Informal Member.


22


TABLE 7.2 POTENTIALLY MINEABLE INTERCEPTS  Drill Hole
Number
From
To
Thick-ness
True
Thick-ness
Gold
(opt)
Silver
(opt)
Copper
(opt)
Lead
(%)
Zinc
(%)
Silver
Equiv-
alent
(opt)
Zinc
Equiv-
Alent
(%)
Dollar
Value ($)UDDH01
365.5
377.2
11.7
10.3
0.072
4.96
0.01
0.07
0.14
9.37
4.45
$84.50406.6
417.2
10.6
9.6
0.031
5.14
0.11
0.68
1.55
11.4
5.41
$192.83442.2
462.5
20.3
17.2
0.011
2.93
0.17
1.09
1.74
9.23
4.38
$83.23UDDH02
378.0
385.0
7.0
6.6
0.084
17.02
0.54
0.37
0.36
25.39
12.06
$229.06417.9
425.5
7.6
6.8
0.049
14.08
0.01
0.07
0.05
17.05
8.10
$153.83540.3
564.0
23.7
22.1
0.014
2.57
0.11
1.18
1.18
7.70
3.66
$69.50UDDH03
395.0
410.7
15.7
13.4
0.051
4.35
0.04
0.19
0.19
7.97
3.78
$71.85UDDH05
322.0
325.3
3.3
3.2
0.038
6.82
0.36
2.92
1.60
17.27
8.20
$155.75UDDH06
374.0
378.5
4.5
3.2
0.011
1.52
0.13
0.84
1.54
6.91
3.28
$62.30UDDH07
616.3
624.7
8.4
7.3
0.005
1.42
0.35
1.93
3.22
12.33
5.85
$111.18UDDH10
96.7
135.4
38.7
30.5
0.043
2.19
0.14
0.56
0.69
7.37
3.50
$66.48283.7
295.0
11.3
9.8
0.037
3.54
0.02
0.46
0.55
7.33
3.48
$66.14UDDH11
8.6
13.4
4.8
3.7
0.146
19.02
0.50
0.75
0.91
32.26
15.32
$290.99103.3
112.0
8.7
7.5
0.032
11.14
0.68
1.34
1.74
21.30
10.11
$192.14UDDH12
5.8
61.0
55.2
33.0
0.018
5.37
0.44
0.41
0.77
10.54
5.00
$95.08220.0
230.3
10.3
5.2
0.016
2.00
0.05
0.17
1.65
6.79
3.22
$61.21UDDH13
77.9
82.6
4.7
4.4
0.008
2.89
0.35
1.42
1.86
10.49
4.98
$94.65  A report titled:
Evaluation of the Deer Trail Tailings at the Deer Trail Mine, Piute County,
Utahwas submitted by Behre Dolbear as
final to the Company on September 18, 2008  and the report summary is
included here as follows:  Behre Dolbear & Company (USA), Inc.
(Behre Dolbear) has evaluated the Upper Tailings Dump at the Deer Trail Mine for
UNICO, Inc. (UNICO) and the Deer Trail Mining Company, LLC (Deer Trail). The
study estimates the tonnage of material and the average grades and contained
ounces of gold and silver in the Upper Tailings Dump. Deer Trail personnel
provided data from two different drilling programs to Behre Dolbear. The two
programs covered the same area and were performed in 1990 by Energy Fuels
Nuclear, Inc. (Energy Fuels) and in 1993 by Ecology Mining Company (Ecology
Mining). In both programs, the drill holes were spaced approximately 50 feet
apart.  The 1990 Energy Fuels drilling program
consisted of 64 drill holes along with assays for gold and silver at
approximately 5-foot intervals down the hole. In addition to samples taken
within the tailings dump, all but two of the holes penetrated the soil below the
tailings. Only 39 of the sub-soil locations were assayed, and one location had
no silver assay.  The 1993 program by Ecology Mining
consisted of at least 51 drill holes in the Upper Tailings Dump. A memo from
Lionel Koon to Hal Cooper dated February 10, 1994 contains assays for some of
the drill holes through DH51. Gold and silver analyses were performed for
selected intervals down the holes, but were not performed on each interval.
Because of the incompleteness of the data available, Behre Dolbear made no grade
estimates for the 1993 program. Tonnages of tailings material were calculated
based on the 51 drill holes recorded by Ecology Mining in 1993.


23


The calculation
of volumes, tonnages, and gold and silver average grades and contained ounces
for the 1990 data can only be considered approximate and for reference only
because origins of the input data available are not substantiated in any other
way than appearance on a printed table of unknown origin. No reports, chain of
sample custody, original sample remains, or any other information is available
for these samples. Therefore, Behre Dolbear cannot verify either the 1990 or the
1993 data.  Behre Dolbears evaluation focused only on
the tonnage of the tailings dump and associated gold and silver grades. The
results of the Behre Dolbear evaluation and the two drilling programs performed
in 1990 and 1993 are shown in Table 1.1.  TABLE 1.1

SUMMARY OF
TONNAGES, GRADES, AND CONTAINED OUNCES OF BEHRE
DOLBEAR
EVALUATION AS COMPARED TO PREVIOUSLY REPORTED QUANTITIESSource
Tonnage
(short
tons)
Average
Gold
Grade
(opt)
Average
Silver
Grade
(opt)
Contained
Golda
(ounces)
Contained
Silvera
(ounces)BD 2007  1990 data, Lowerb
(Natural Neighbor Method)
80,300
0.032
2.62
2,500
218,300BD 2007  1990 data, Higherb
(Minimum Curvature Method)
102,500
0.031
2.70
3,100
294,000BD 2007  1993 data, Lowerc
(Natural Neighbor Method)
82,400
NA
NA
NA
NABD 2007  1993 data, Higherc
(Minimum Curvature Method)
103,400
NA
NA
NA
NA1990 Energy Fuels, Pratt Memo
to Andrus
132,540d
0.031
2.66
--
--1990 Energy Fuels Data, Sub-soil
(39 samples)
--
0.015
0.989
--
--1993 Ecology Mining Map
76,836e
--
--
--
--1993 Ecology Mining Grades
From Several Sources
(51 drill holes)
--
0.030
to
0.045
2.416
to
3.710
--
--2004 Ash Report f
105,000
0.031
2.85
--
--aNo recoveries were applied .
Contained ounces are obtained by summing gridded values, not by
multiplication of ounces and tons.
b1990 Energy Fuels data obtained from
printed spreadsheet.
c 1993 Ecology Mining data obtained from
map.
dTonnage reported by Deer Trail (Ash
Report, 2004), attributed to J.M. Pratt (original report not
available). Some tonnage may have come
from other mines that were milled at Deer Trail.
eFrom map: 62,980 cu. yd. converted to
tons using a tonnage factor of 1.22 tons/cu. yd.
f Estimate compiled by Wayne Ash from
all available sources.  The evaluation of tonnage and grade was
made using two different methods; the Natural Neighbor method and the Minimum
Curvature method (see Appendix 3.0 for more explanation of these methods). The
Natural Neighbor method calculates a grid only within the boundaries of the
drill holes and is a most conservative estimate compared to other methods. The
Minimum Curvature method is less conservative than Natural Neighbor, and
produces a higher result, primarily because more area is included in the
estimate. The estimates produced with this study are within the same ranges as
the estimates in earlier studies.  Behre Dolbear used a tonnage factor of 1.22
tons per cubic yard for the tonnage estimates in this report. The tonnage factor
was determined by Deer Trail in recent tests, but was not confirmed by Behre
Dolbear. Details explaining the determination of the tonnage factor are included
in Appendix 1.0.  A report of results about the 1990 Energy
Fuels drilling program is not available, but the Ash 2004 deposit assessment
report refers to a tonnage estimate of 132,540 tons by J.M. Pratt in a memo
written to J.R. Andrus. This is about 28% higher tonnage than the other reports
and the calculations done by Behre Dolbear. The Ash 2004 report speculates that
the


24


tonnage estimate
was probably generated with a computer from drill hole data and a topographic
survey. The report also speculates that ore from other mines was milled at Deer
Trail.  Fire assay grades from the 1993 drilling
project were reported in a memo from Lionel Koon to Hal Cooper (Ecology Mining).
Because of uncertainties about origins of the analyses and because continuous
intervals down the hole were not assayed, only tonnages were calculated for the
1993 data. Behre Dolbear observes that the grades from all the sources other
than the Koon memo differ by less than 5%.  The 1990 drilling penetrated the soil below
the original tailings level with the expectation that gold and silver from the
tailings could have leached into the soil below (sub-soil). The drilling and
subsequent assays of the soils did result in measurable gold and silver grades.
Sub-soil assays were not available for all drill holes, so no estimate was made
of the possible quantity of gold and silver or tonnage in the sub-soil.  Although Behre Dolbear cannot verify either
the 1990 or the 1993 data, it is reasonable to use the averages of those tonnage
and grade estimates as an approximation of the actual tonnage and grades of the
material in the Upper Tailings Dump. Those averages are 92,150 tons at grades of
0.03 ounces per ton (opt) gold and 2.66 opt silver. Behre Dolbear has also not
verified the tonnage factor provided by Deer Trail to calculate tonnages from
estimates of volumes.  The United States Securities and Exchange
Commission (SEC) in its requirements for information disclosure for the mining
industry does not recognize the term resource. Mineralization that is
classified as a resource in some other jurisdictions is called mineralized
material by the SEC. Mineralized material is defined as a mineralized body,
which has been delineated by appropriately spaced drilling and/or underground
sampling to support a sufficient tonnage and average grade of metals. Such a
deposit does not qualify as a reserve until a comprehensive evaluation based
upon unit cost, grade, recoveries, and other material factors
conclude legal and economic feasibility.The SEC allows companies to publish
tonnage and grade estimates of mineralized material but not estimates of
contained metal.  Based on this definition and the above
calculated averages, Behre Dolbear classifies the tailings material in the Upper
Tailings Dump as Mineralized Material estimated to contain approximately 92,150
tons at grades of 0.03 opt gold and 2.66 opt silver. Additional drilling and an
economic analysis would be required to classify the tailings as a Reserve. To
verify the data, Behre Dolbear recommends that UNICO drill ten to fifteen holes
distributed throughout the deposit, sample, and assay the drilled material for
gold and silver, statistically analyze the data, and compare the results with
the results from the 1990 and 1993 drilling programs. Behre Dolbear also
recommends that UNICO produce a new surface contour map of the tailings as
erosion subsequent to the 1990 and 1993 contour maps may have removed and/or
redistributed some of the tailings. In addition, UNICO should determine a more
accurate tonnage factor. All the resulting data, if sufficiently comparable with
the 1990 and 1993 data, should be used to estimate tons, grades, and contained
ounces of gold and silver. If not sufficiently comparable, the entire tailings
deposit should be re-drilled.  An economic analysis using the estimates of
tons, grades, and contained metals must be carried out to produce an
SEC-compatible Reserve.  Table 1.1 summarizes the results of Behre
Dolbears evaluation of the two drilling programs performed in 1990 and 1993.
The table also shows the results of estimates from others based on those two
drilling programs.  Behre Dolbear cannot verify either the 1990
or the 1993 data. However, the four tonnage estimates by Behre Dolbear and the
two grade estimates for gold and silver (Table 9.1) are not significantly
different from each other. In addition, those estimates are not widely different
from the other estimates cited in that table. Therefore, it is reasonable to use
the average of the Behre Dolbear tonnage and grade estimates as an approximation
of the actual tonnage and grades in the Upper Tailings Dump. Behre Dolbear has
used but has not verified the tonnage factor estimated by Deer Trail to
calculate the tonnages from its estimates of volumes. The calculated averages
are 92,150 tons of tailings at grades of 0.03 opt gold and 2.66 opt silver.  UNICO has requested that Behre Dolbear
classify the tailings in accordance with the mining disclosure policy of the
United States Securities and Exchange Commission (the SEC). Additional drilling
and an economic analysis would be required to classify the tailings as a
Reserve. That work is beyond the scope of the current project. The SEC does not
recognize the term resource to classify mineralization for investor
information purposes. Mineralization classified as resources in some other
jurisdictions, including Canada, is called mineralized material by the SEC.
Mineralized material is defined as a mineralized body which has been
delineated by appropriately spaced drilling and/or underground sampling to
support a sufficient tonnage and average grade of metals. Such a deposit does
not qualify as a reserve until a comprehensive evaluation based upon unit cost,
grade, recoveries, and other material factors conclude legal and economic
feasibility.


25


Based on this
definition and the calculated tonnages and grades cited above, Behre Dolbear
classifies the Upper Tailings Dump as containing approximately 92,150 tons of
Mineralized Material averaging 0.03 opt gold and 2.66 opt silver.  As pointed out above, Behre Dolbear cannot
verify the data used to estimate the tons and grades. To verify the data, Behre
Dolbear recommends that UNICO drill ten to fifteen holes distributed throughout
the tailings pile. That number of holes is approximately 20% of the holes
drilled by Energy Fuels in 1990. The drilled material should be sampled in
five-foot intervals and assayed for gold and silver. The resulting data should
be statistically analyzed and compared with the results from the 1900 and 1993
drilling programs. Behre Dolbear also recommends that UNICO produce a new
contour map of the surface of the tailings pile. As pointed out in Section 5.2,
erosion subsequent to the 1990 and 1993 contour maps used by Behre Dolbear may
have removed and/or redistributed some of the tailings. In addition, UNICO
should determine a more accurate tonnage factor. All the resulting data, if
sufficiently comparable to the1990 and 1993 data should be used to estimate tons
and grade and contained ounces of gold and silver. If not sufficiently
comparable, additional drilling should be performed to completely redrill the
tailings.  An economic analysis using the estimates of
tonnage, grade, and contained metals must be carried out to produce an
SEC-compatible Reserve. That analysis must consist of a determination of mining,
processing, and general and administrative costs to mine. Since the material
will be processed by the Deer Trail mill, the recoveries of gold and silver in
that mill must be determined as a part of that analysis.  In September 2007, Deer Trail Mining
Company completed the construction of a new electrical substation that will
supply power to the reconstructed mill and processing facility. The substation
is designed to supply up to 2.5 megawatts of electrical power well beyond the
estimated 1.5 megawatts estimated to run the mill and processing facility.
Additional power is expected to be used for future mining activities and
expansion plans on site. The Company recently completed the construction of a
secondary substation to interface directly with the mill and processing facility
and it is now energized.  In February, 2008, the Deer Trail Mining
Company completed underground rehabilitation work up through to the 3400 level
of the PTH tunnel of the Deer Trail Mine. The work was contracted through Atlas
Mining Company to conduct initial underground maintenance including the
replacement of timber sets, clean up of the main haulage way and installation of
ground support where needed to the main PTH haulage tunnel.  The Deer Trail Mining Company has completed
the reconstruction work of the floatation circuit at the mill and processing
facility at the Deer Trail Mine. Testing of the floatation circuit is currently
underway utilizing screened material from the stockpiles on site of ore that was
mined in 2001.  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 conduct a feasibility study in order to analyze the claims
prior to commencing any future mining activities on the claims.  Silver
Bell Mining Company anticipates that any future ore mined from the Silver Bell
Mine will be transported to the Deer Trail Mine site where it can be further
processed.  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.  In August 2006, Silver Bell Mining Company
reached a preliminary agreement for a joint venture with the Polymet Company,
LLC for mining at the Silver Bell Mine and executed a letter of intent.  A
subsequent definitive agreement to finalize the details of the joint venture was
expected to be signed by August 31, 2006.  However, the parties failed to
reach a definitive agreement, and the parties are no longer involved in
negotiations.  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 lease was renewed multiple times and assigned to Unicos
subsidiary, Bromide Basin Mining Company, LLC.  The lease expired October
31, 2007, and the Company chose not to extend it or exercise the purchase
option.


26


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
concluded its evaluation of the property, and determined that the leased
premises under the Kaibab Mining Lease is not feasible for large scale mining
activities by Bromide Basin Mining Company.  Plan of Operation  During the next 12 months, the Companys
plan of operation is to raise approximately $3,500,000 for investment into its
subsidiary companies: Deer Trail Mining Company and Silver Bell Mining Company.
The funds are intended for the following purposes during the next twelve months:  § Continue sampling and
analyzing mineralized rock samples, stockpiles and dump material from the Deer
Trail Mine to evaluate the most efficient means to conduct future mining and
milling activities; § Expand metallurgical
research department at the Deer Trail Mine and Mill Facility; § Purchase additional lab
equipment for metallurgical purposes; § Upgrade mine
infrastructure and begin underground mining activities including maintenance and
rehabilitation work at the Deer Trail Mine; § Continue to upgrade and
complete the re-construction project on the existing mill at the Deer Trail
Mine; § Upgrade the crushing
facility at the upper Deer Trail Mine and continue screening the ore dumps; § Begin milling and
processing activities at the Deer Trail Mill and Processing Facility; § Acquire new mining
equipment including a crushing unit to improve operations at the Deer Trail
Mine; § Conduct additional
survey and mapping work on the Clyde and Crown Point mining claims including
improvements to the property and potentially underground and surface exploratory
drilling on the claims; and § Commence a feasibility study on the potential of the mining claims
at the Silver Bell Mine beginning in the Spring of 2009.  Accomplishing the 12-month plan of
operations is dependent on: (a) the Company raising approximately $3,500,000 in
equity and/or debt financing during the next 12 months to be used for the
Companys operations, of which approximately $2,500,000 is needed in the next
120 days.  Subsequent to the quarter ending August 31, 2008, the Company
received $150,000 through the issuance of new convertible debentures to Moore
Investments.  The new debentures were issued with terms of 180 days, bear
interest at the rate of 8% per annum, and are convertible by the holder in
shares of the Companys common stock at a discount of 50% of the closing bid
price on the date of conversion.  The Company intends to raise
approximately $3,350,000 during the fiscal year ending February 28, 2009 to
fulfill the 12-month plan.  Reverse Stock Split  Effective June 30, 2008 the Companys
common stock underwent a 1 for 500 reverse stock split.  As a result, the
number of outstanding shares of the Companys common stock as of June 30, 2008
decreased from 4,940,363,072 pre-reverse split shares to 9,880,727 post-reverse
split shares.  Share figures appearing in this report are generally
expressed in numbers of post-reverse split shares, unless otherwise noted.
 As of August 31, 2008, the Company had 10,492,729 post reverse shares of
common stock issued and outstanding.  Results of Operations  For the three months ended August 31, 2008
and August 31, 2007, Unico reported no revenues.  For the six months ended
August 31, 2008 and August 31, 2007, Unico reported no revenues.  During the three months ended August 31,
2008 the Company incurred total operating expenses of $502,360, an increase of
$17,048 from the $485,312 of total operating expenses incurred in the three
months ended August 31, 2007.  The increase is due primarily to an increase
of $21,954 in depreciation and $112,795 in salaries and wages at the mill for
test runs of product in the last three months, partially offset by decreases of
$33,107 in general and administrative expense, $51,299 in professional fees, and
$33,295 in drilling, exploration and maintenance expense. During the six months
ended August 31, 2008 the Company incurred total operating expenses of
$1,119,712, an increase of $219,434 from the $900,278 of total operating
expenses incurred in the six months ended August 31, 2007.  The increase is
primarily attributed to a $246,249 increase in salaries/wages and a $43,146
increase in depreciation, partially offset by a $52,213 decrease in professional
fees and a $18,494 decrease in drilling, exploration and maintenance expense
from the comparative period in 2007.  The increase in total operating
expenses for the six months ended August 31, 2008 is attributable to the
increase in milling activities associated with testing of the mill.


27


During the three months ended August 31,
2008, interest expense was $782,457, a decrease of $1,156,996 from the
$1,939,453 of interest expense recorded in the three months ended August 31,
2007.  During the three months ended August 31, 2008, the Company recorded
a derivative loss on debentures of $296,288 as compared to a $220,084 derivative
gain that was recorded on debentures in the three month period ended August 31,
2007.  Loss on settlement of debt was $0.00 in the three months ended
August 31, 2008, a decrease of $3,795,868 from the $3,795,868 loss on settlement
of debt incurred during the three months ended August 31, 2007.  During the
six months ended August 31, 2008, interest expense was $1,695,148, a decrease of
$939,812 from the $2,634,960 of interest expense recorded in the six months
ended August 31, 2007.  During the six months ended August 31, 2008, the
Company recorded a derivative loss on debentures of $277,818 as compared to a
$210,336 derivative gain that was recorded on debentures in the six months
period ended August 31, 2007.  Loss on settlement of debt was $0.00 in the
six months ended August 31, 2008, a decrease of $7,929,184 from the $7,929,184
loss on settlement of debt incurred during the six months ended August 31, 2007.
   The Company attributes the decrease in interest expense in the
six months ended August 31, 2008 to a decrease in the amount of debentures
issued in the current six month period compared to the same period a year ago.
 The Company attributes the increase in the derivative loss to the larger
increase in the defaulted debt in the six month period ended August 31, 2008
compared to the six month period ended August 31, 2007.  The Company
attributes the substantial decrease in the loss on settlement of debt in the six
month period ended August 31, 2008 to the fact that no debentures were converted
to common stock through litigation settlements during the six months ended
August 31, 2008 while a substantial amount of debentures were converted to
common stock through litigation settlements during the six month period ended
August 31, 2007.  During the three months ended August 31,
2008, Unico experienced a net loss in the amount of $1,578,192 or approximately
($0.16) per share, compared to a net loss of $5,996,696 or approximately ($1.11)
per share for the same period in 2007.   During the six months ended
August 31, 2008, Unico experienced a net loss in the amount of $3,089,709 or
approximately ($0.31) per share, compared to a net loss of $11,248,483 or
approximately ($2.75) per share for the same period in 2007.  Unico attributes the $4,418,504 decrease in
net loss for the three month period ended August 31, 2008 and the $8,158,774
decrease in net loss for the six month period ended August 31, 2008 compared to
the respective three month period and six month period ended August 31, 2007,
primarily to a decrease in loss on settlement of debt based on the fact that
there were no shares of common stock issued for settlement of debt during the
current period compared to a large number of shares issued through litigation
settlements for the settlement of debt in the previous period.  Liquidity and Capital Resources  The Companys financial statements present
an impairment in terms of liquidity. As of August 31, 2008 the Company had a
deficit in working capital of $18,317,909.  The Company has accumulated
$64,014,398 of net operating losses through August 31, 2008, of which
approximately $12,000,000 may be used to reduce taxes in future years through
2028. 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. The Companys
stockholders deficit increased $3,041,694 in the six month period ended August
31, 2008, from a deficit of ($8,653,504) as of February 29, 2008 to a deficit of
($11,695,198) as of August 31, 2008. The Companys cash as of August 31, 2008,
when combined with $150,000 additional cash the Company received in September
2008, will sustain operations for approximately 30 days.  The Company needs
to raise approximately $3,350,000 in equity and/or debt financing during the
next 12 months to be used for the Companys operations, of which approximately
$2,500,000 is needed in the next 120 days.  The Company has effected a
reverse stock split of its issued and outstanding shares so that the Company
will have sufficient authorized, but unissued, shares of its common stock
available to provide for the conversion of the Companys existing $7,603,408 of
convertible debentures into shares of the Companys common stock.  These
additional authorized, but unissued, shares will also allow the Company to raise
additional capital through the sale of shares of restricted common stock.  Our auditors have issued a "going concern"
opinion in note 7 of our February 29, 2008 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 $3,350,000 in equity, debt or through other financing transactions in
the next 12


28


months (of which
$2,500,000 is needed in the next 120 days), we believe that Unico will have
sufficient funds to meet operating expenses until income from mining operations
are sufficient to cover operating expenses.   Item
3. Quantitative and
Qualitative Disclosures About Market Risk.  A smaller reporting
company (as defined by Item 10 of the Regulation S-K) is not required to
provide the information required by this Item.  Item 4T. Controls and Procedures.  Evaluation of Disclosure Controls and
Procedures  Under the
supervision and with the participation of management, our principal executive
officer and principal financial officer, Mark A. Lopez and Kenneth C. Wiedrich,
respectively, 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,
2008.  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 communicated to
our chief executive officer and chief financial officer, in a manner that
allowed for timely decisions regarding required disclosure. Changes in
Internal Control Over Financial Reporting During the last
fiscal quarter ended August 31, 2008, there has been no change in our internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.   PART II - OTHER INFORMATION   Item 1. Legal Proceedings.  On April 29, 2007, Bromide Basin Mining
Company, LLC was served with a lawsuit filed on April 10, 2008 by Kaibab
Industries, Inc. in Maricopa County, Arizona state court (No. CV2008-008121).
 The plaintiff alleged that Bromide Basin Mining Company, LLC owed $30,000
in rent for the months of May through October 2007, when the mining lease
expired.  The plaintiff also alleged that Bromide Basin Mining Company, LLC
failed to vacate the premises and that it owed an additional $5,000 per month as
a holdover tenant commencing November 1, 2007 until it vacated the premises.
 The plaintiff also asked for interest, attorneys fees and court costs.
 Bromide Basin Mining Company, LLC vacated the premises at the termination
of the mining lease.  The Company reached an agreement to settle this
lawsuit in July 2008 for $30,000. . On August 14, 2008, Unico shareholders
Randall Sullivan, Barry Raykoske, and Jack Reilly filed a derivative lawsuit on
behalf of Unico against Ray C. Brown, Kenneth C. Wiedrich, Mark A. Lopez, Shane
Traveller, Javelin Advisory Group, Inc., and Unico (as a nominal defendant) in
the Superior Court of the State of California, San Diego County Central Division
(Case No. 37-2008-0008901-CU-PN-CTL).  The plaintiffs allege that the named
defendants breached fiduciary duties owed to Unico, and were negligent in the
approval of certain financing transactions entered into on behalf of Unico.
 The plaintiffs seek no less than $20 million in damages from the named
defendants, as well as injunctive relief, interest, attorney's fees, and court
costs.  Plaintiffs are seeking a determination that they are appropriate
representatives of Unico shareholders to bring a derivative suit, which is a
prerequisite to bringing such a claim under California Corporations Code section
800.  The defendants deny any liability, and are defending the lawsuit.  On September 30, 2008, a lawsuit was filed
by Cache Valley Electric Company against Unico, Incorporated in the Third
Judicial District Court for Salt Lake County, State of Utah (Case No. 080921346)
in which the plaintiff alleges that it provided goods and services to Unico in
the amount of $191,615.82, for which it has not received payment.  The
plaintiff alleges that Unico breached the contract by failing to pay for the
goods and services, and is seeking a money judgment against Unico in the amount
of $191,615.82 together with interest thereon at the statutory rate and court
costs.  Unico intends to negotiate a settlement of the lawsuit.


29


Item 1A. Risk Factors.  A smaller reporting company (as defined
by Item 10 of Regulation S-K) is not required to provide the information
required by this Item.  Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds.  From March 1, 2008 through August 31, 2008
Unico issued convertible debentures (Debentures) aggregating approximately
$1,290,000 to Moore Investment Holdings that were unpaid as of August 31, 2008.
 All of the outstanding Debentures issued by Unico before February 29, 2008
which aggregate approximately $6,313,408 are in default.  The Debentures
are due in 180 days from their issuance dates, bear interest at 8% per annum,
and provide that the principal amount and accrued interest are 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 delivering the notice of conversion.  Subsequent to the quarter ending August 31,
2008, Unico received $150,000 through the issuance of new convertible debentures
containing the same terms.  Unico issued 500,000 shares of Unicos
common stock for conversion of $24,474 of interest and $5,526 of principal of
outstanding debentures in the six month period ended August 31, 2008.
 Subsequent to the quarter ended August 31, 2008 the Company issued
1,000,000 shares of Unicos common stock for conversion of $43,430 in principal
and $1,570 in interest of an outstanding debenture.  These shares were
issued without registration in reliance on Section 4(2) of the Securities Act of
1933 for transactions not involving any public offering.  As of August 31, 2008, there are still
outstanding approximately $7,603,408 in convertible debentures (less discounts
of $629,195), and the holders of these debentures have the right to convert them
to shares of the Companys common stock.  All of the Debentures and shares of common
stock were issued without payment of any underwriting discounts or commissions,
and without the assistance of an underwriter.  During the fiscal year ended February 28,
2007 the Company entered into two stock purchase agreements with Cherry Creek
Holdings, LLC wherein Cherry Creek purchased 33,333,333 pre-split shares (66,667
post-split shares) and 42,785,700 pre-split shares (85,572 post-split shares) of
unregistered and restricted shares of common stock for $400,000 and $599,000
respectively.  The shares have not been issued and are reported as a stock
payable on the financial statements.  The cash has been received and the
stock will be issued in the fiscal year ending February 28, 2009.  These
shares will be issued without registration in reliance on Section 4(2) of the
Securities Act of 1933 for transactions not involving any public offering, and
the certificates representing the shares will be appropriately restricted.  For information concerning sales of other
convertible debentures or shares of Unico's Common Stock by Unico which were not
registered under the Securities Act of 1933 during the fiscal years ended
February 28, 2006, February 28, 2007 and February 29, 2008 please refer to
Unico's annual reports on Form 10-KSB for the fiscal years ended February 28,
2006 and February 28, 2007, and Form 10-K for the fiscal year ended February 29,
2008, respectively.   Item 3. Defaults Upon Senior Securities.  From March 1, 2007 through February 29,
2008 Unico issued convertible debentures (Debentures) aggregating
approximately $3,764,954 to Blue Marble., approximately $1,200,000 to Compass
Capital Corporation and approximately $500,000 to Moore Investment Holdings that
were unpaid, and of which $3,965,100 are in default, as of February 29, 2008.
 From March 1, 2008 through August 31, 2008 an additional $1,290,000 of
Debentures were issued to Moore Investment Holdings.  Some of the
Debentures issued before March 1, 2008, were assigned to Blue Marble
Investments, Outboard Investments, Umbrella Holdings and Yanzu, Inc.
 Because Unico failed to pay the Debentures when due, a total of six (6)
lawsuits were filed by certain Debenture holders against Unico in the Twelfth
Circuit (State) Court in Florida from March 1, 2007 to February 29, 2008 seeking
to collect the amounts owed.  Unico entered into settlement agreements to
settle each of the lawsuits.  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


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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 March 1, 2007 until February 29,
2008, 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 3,926,315,790 pre-split shares (7,852,632 post split shares) of its common
stock.  As of August 31, 2008, Unico has approximately $6,313,408 in
outstanding debentures that were in default.  There are no pending lawsuits seeking to
collect on Debentures in default and there were no settlements made in the three
month period ended August 31, 2008.   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.
Description
Location10.119
Convertible Debenture No.
78 for $25,000 dated June 11, 2008 issued to Moore Investment Holdings,
LLC
Filed herewith10.120
Convertible Debenture No. 79 for $45,000 dated June
19, 2008 issued to Moore Investment Holdings, LLC
Filed herewith10.121
Convertible Debenture No. 80 for $25,000 dated June
30, 2008 issued to Moore Investment Holdings, LLC
Filed herewith10.122
Convertible Debenture No. 81 for $10,000 dated July
14, 2008 issued to Moore Investment Holdings, LLC
Filed herewith10.123
Convertible Debenture No. 82 for $25,000 dated July
16, 2008 issued to Moore Investment Holdings, LLC
Filed herewith10.124
Convertible Debenture No. 83 for $100,000 dated
July 18, 2008 issued to Moore Investment Holdings, LLC
Filed herewith10.125
Convertible Debenture No. 84 for $100,000 dated
July 23, 2008 issued to Moore Investment Holdings, LLC
Filed herewith10.126
Convertible Debenture No. 85 for $200,000 dated
August 7, 2008 issued to Moore Investment Holdings, LLC
Filed herewith10.127
Convertible Debenture No. 86 for $100,000 dated
August 25, 2008 issued to Moore Investment Holdings, LLC
Filed herewith31.1
Certification of Chief
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
Filed herewith31.2
Certification of Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
Filed herewith32.1
Certification of Chief
Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
Filed herewith32.2
Certification of Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
Filed
herewith


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(b)   Reports on
Form 8-K  During the quarter ended August 31, 2008,
the following Current Report on Form 8-K was filed by Unico:  1. A Current Report on Form
8-K was filed on July 28, 2008 disclosing under Item 8.01 Other Events that
Moore Investment Holdings, LLC purchased seven convertible debentures for an
aggregate purchase price of $330,000.


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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 15, 2008
/s/ Mark A. Lopez
Mark A. Lopez
Chief Executive Officer


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