FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Annual Report Under Section 13 or 15(d) of the 
Securities Exchange Act of 1934

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For Fiscal Year Ended				   	             
December 31, 1997

Commission File #0-15303

UNICO, Inc.
(Exact name of registrant as specified in its charter)
              
Delaware						          		 
(State or other jurisdiction of incorporation or organization)
					
73-1215433
(IRS Employer Identification Number)

8380 Alban Road, Springfield, VA 22150
(Address of principal executive offices )(Zip Code)

(703) 644-0200
(Registrant's telephone no., including area code)			  

(Former name, former address and former fiscal year, if changed 
since last report)

Securities registered pursuant to Section 12(b) of the Act:   
NONE 

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Warrants

Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the 
Securities Exchange Act of 1934 during the preceding 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 [ ]


Check if there is no disclosure of delinquent filers in response 
to Item 405 of Regulation S-B not contained in this form, and no 
disclosure will be contained, to the best of the registrant's 
knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-KSB or any 
amendment to this Form 10-KSB.  (X)

Revenues for year ended December 31, 1997.	     $29,147

Aggregate market value of the voting common stock held by non-
affiliates of the registrant as of April 13, 1998, was:		
                                        								    $264,884

Number of shares of the registrant's common stock outstanding as 
of April 13, 1998 was:                             2,119,077


UNICO, Inc.
FORM 10-KSB

PART I
------

Item 1.  Description of Business
--------------------------------

General
-------

UNICO, Inc., (the Company), was incorporated on April 11, 1984 
under the laws of the State of Delaware.  Initial business 
activities, associated with the sale and administration of 
cooperative direct mail advertising franchises, commenced during 
May 1984.  In September 1986, the Company filed an initial 
registration statement with the Securities and Exchange 
Commission and initiated a plan to expand Company 
operations through the acquisition of existing businesses 
operating in related fields.

The Company's Business
----------------------

Presently, the Company operates as a publicly-owned holding 
company with one active wholly-owned subsidiary, United Marketing 
Solutions, Inc., formerly United Coupon Corporation, ("United 
Marketing"), involved in cooperative advertising.  United 
Marketing is involved in cooperative direct mail advertising 
through franchising and production.  The Company also operated 
and owned a second subsidiary during 1996, Cal-Central 
Marketing Corporation ("Cal-Central").  Cal-Central was 
discontinued during 1996 and was involved in cooperative 
advertising distributed primarily through supermarkets, 
pharmacies and restaurants.  Management has adopted a plan to 
sell United Marketing to a third party.  While a purchaser is 
sought, United Marketing continues its regular operations 
including the granting of additional franchises, opening of 
additional marketing centers and introducing new products for use 
and sale by franchisees.

The Company's cooperative advertising and production business 
involves the design, layout, printing, packaging and distributing 
of public relations, marketing materials and promotional coupons 
for private businesses, usually involved in retailing goods or 
providing professional services.  Cal-Central's cooperative 
advertising process included sales of advertising through 
independent sales representatives.

Franchising activities related to this business involve the 
granting and administering of independent franchise operations to 
conduct cooperative direct mail advertising sales.  All 
activities related to franchising are conducted through United 
Marketing, which was acquired on July 17, 1987.  At year-end, 
December 31, 1997, United Marketing had approximately 65 active 
franchise operations.

The Company's Markets
---------------------

Cooperative Direct Mail Advertising
-----------------------------------

The customer base of most local retailers and professionals comes 
from within a three-mile radius of its location, therefore, it is 
difficult for them to advertise effectively and economically.  
The Company believes that direct mail is an effective advertising 
method for the local merchant and professional since they can 
target a specific area and have substantial saturation of their 
advertising message.  Radio and television advertising, in 
contrast, is costly to produce and air.  The advertiser is paying 
for broadcasting over a large metropolitan area, much of which is 
not part of its customer base.  It may not be efficient or 
affordable unless the advertiser has multiple locations.  Major 
city newspapers are also comparatively expensive since they, too, 
cover an entire city and not just the specific area relevant to 
the local retailer and professional.  In addition, newspapers 
usually contain large amounts of advertising, which may limit the 
effectiveness of small ads.

Individual direct mail programs are also expensive, when the cost 
of postage, design, envelopes, printing, and mailing lists are 
considered.  Cooperative direct mailing of advertisements for 
several businesses in one mailing, substantially reduces the 
advertisers' cost from the price of an individual direct mail 
program.  

The Company's franchisees sell cooperative direct mail 
advertising to retailers and service organizations in a given 
market area.  They assist each business owner with the design and 
content of advertisements or coupons. The Company produces and 
mails a packet of coupons (usually consisting of fifteen or more 
coupons) to thousands of homes in a targeted geographic area.  
The Company receives a majority of its revenue by providing, on a 
wholesale basis to its distributors, a complete mailing service.  
Such services include computerized design, typesetting, paste-up, 
proofing, printing, inserting, addressing, and mailing, as well 
as paper, envelopes, labels and postage.

The market segment targeted by the Company's franchisees includes 
local retailers, service businesses and professional 
organizations.  In addition, specialty mailings are conducted on 
a regular basis and major consumer products companies that market 
on a national level are solicited to advertise in the Company's 
mailings.

Franchising
-----------

The Company targets the major markets of the United States with a 
population of 500,000 or more.  Each Area franchise territory can 
consist of 50,000 to 80,000 mailable homes.  Franchise prospects 
are located through the use of local and national advertising, 
franchise shows and seminars, and a network of franchise sales 
representatives.  Sales tools consist of Company brochures, a 
franchise sales booth, and a video presentation.

The Company has also implemented a franchise sales program 
whereby the Company assists existing franchisees in selling parts 
of their respective territories.  Generally, franchise 
territories which would be involved in this program, are those 
which have more than 150,000 mailable homes.

Each franchise consists of an independent operation in an 
exclusive territory in which no competition from other Company 
franchisees is allowed.  The Company provides the franchisee with 
a thorough, individually-oriented, two-week training program 
covering all facets of the business.  In addition, the Company 
provides the franchisee with operation manuals, sales support 
materials, market softeners (direct mailings to potential 
customers), use of its trademarks and logos, WATTS telephone and 
FAX service for transferring layouts, and continuing management 
support.

Franchise fees are based upon the total number of mailable homes 
in the exclusive territory.  Area franchise fees are $21,900 for 
50,000 mailable-home territories plus $1,500 for each additional 
increment of 10,000 mailable-home territories.  Generally, the 
franchise agreements are for a period of ten years, and are 
renewable at the option of the franchisee, if certain conditions 
are met.  These agreements include a performance clause, which is 
based upon a minimum distribution standard and frequency of 
mailings over the term of the franchise agreements.

Regional franchisees, in addition to operating an Area franchise, 
are directly involved in recruiting and training Area franchisees 
within their region.  United Marketing carefully designed the 
Regional franchising program to provide substantial opportunity 
for the Regional franchisee, while maintaining appropriate 
corporate control over the approval of Area franchise grants and 
contractual agreements.  A Regional Franchisee also has an 
exclusive territory, comprised of approximately 1,000,000 
mailable homes, and supervises 15-18 Area Franchisees.  
The license fee for a Region is $51,000 to $59,000.  Regional 
Franchisees attend one additional week of training at 
the corporate headquarters.

The Company retains the right to terminate a franchise for a 
variety of reasons, including insolvency or bankruptcy, failure 
to operate the business according to prescribed standards, 
failure to pay fees, and material misrepresentation on an 
application for a franchise.
	
Set forth below is the geographical location of the franchises in 
operation as of December 31, 1997.

Alabama        2      Maryland        4	     North Carolina    3
California     5	     Massachusetts   9      Pennsylvania      6
Connecticut    2	     Minnesota       2      Texas             2
Florida        2	     New Hampshire   1      Virginia          6
Georgia        3	     New Jersey      6	
Illinois       1 	    New York       10	
Louisiana      1

Acquisition of Cal-Central Marketing Corporation
------------------------------------------------

On October 21, 1993, UNICO, Inc. (the "Company") and AEC 
Acquisitions, Inc. ("AEC"), a wholly-owned subsidiary of the 
Company, entered into a definitive Agreement for the merger of 
Cal-Central Marketing Corporation, a Florida Corporation ("Cal-
Central/Florida") into AEC.  The merger was effected on October 
27, 1993, through the issuance of 1,200,000 (300,000 after giving
effect to the one for four reverse split effective December 30, 1997)
shares of restricted Common Stock of the Company, 600 shares of 
Redeemable Preferred Stock of the Company and 1,000 shares of 
Convertible Preferred Stock of the Company. The terms of the 
Redeemable Preferred Stock provided that such shares be redeemed 
for $600,000 at the holders' option after certain profit performance 
tests are met by Cal-Central.  The shares of Convertible Preferred 
Stock were mandatorily convertible into Common Stock of the Company 
after 12 months, and after certain profit performance tests by 
Cal-Central for such period.  The Convertible Preferred Stock 
expired in October 1994, with performance tests not achieved.  In 
March 1995, 320 shares of the Redeemable Preferred Stock were 
converted into 355,556 (88,889 after giving effect to the one for
four reverse split effective December 30, 1997) shares of Common Stock 
of the Company at a conversion price of $.90 per share, in lieu of 
cash redemption.

The acquisition was accounted for as a purchase with a price of 
approximately $1,400,000.  The operating results have been 
included in the consolidated financial statements of the Company 
since October 22, 1993 until closure of Cal-Central in the fourth 
quarter of 1996.  The Company acquired assets of $1,887,242 and 
assumed liabilities of $2,687,824.  The excess purchase price 
over the fair value of the net assets acquired was recorded as 
goodwill in the Company's balance sheet and was amortized on the 
straight line method over forty years.  During 1996, the Company 
was forced to close the Cal-Central business due to lingering 
operating losses and a shortage of working capital.  Remaining 
goodwill of $1,468,453 was written off during the fourth quarter 
of 1996.

Cooperative Distribution Point Advertising
------------------------------------------

With the acquisition of Cal-Central in October 1993, the Company 
acquired several new product lines including TV Sports & Movies 
Previews, Video Previews, Family Health & Fitness, bulletin board 
displays, cash register tape coupons and take-out menus.  The 
advertising products were distributed primarily through 
supermarkets, pharmacies, restaurants and other specialty 
retailers.  Cal-Central operated a complete art development and 
printing facility in Fort Lauderdale, Florida until December 15, 
1995.  Cal-Central operations were discontinued during 1996.

Trade Names, Service Marks and Logo Types
-----------------------------------------

The United Coupon Corporation service mark was registered with 
the United States Patent Office on Principal Register, register 
number 1,310,366 on December 16, 1984.  In addition, the service 
mark was registered in the Commonwealth of Virginia on April 27, 
1984.  Franchisees of United Marketing are allowed to operate 
under the trade names of United Marketing Solutions or United 
Coupon.

Pursuant to its License Agreement, United Marketing authorizes 
franchisees to operate a cooperative direct mail, advertising 
business under the name United Coupon or United Marketing 
Solutions and in accordance with the United Marketing system.  In 
connection with the operation of a United Marketing cooperative 
direct mail advertising business, franchisees are authorized to 
use the name and service mark "UNITED COUPON" as well as 
other such service marks or commercial symbols as United 
Marketing from time to time adopts and makes a part of 
the United Marketing system.

Government Regulation
---------------------

The Company is subject to regulation under the rules of the 
Federal Trade Commission regarding 
disclosure of certain information for the sale of franchises as 
well as state regulatory authorities in certain states 
where the Company does business.  Statutory provisions in certain 
states impose certain substantive requirements 
on the relationship between the franchiser and the franchisee.  
Management believes the Company is in material 
compliance with such regulatory requirements.

Competition
-----------

The advertising industry is highly competitive with many firms 
having vast resources competing for businesses' advertising 
dollars.  The Company's business, primarily cooperative 
advertising delivered through direct mail or through 
distributors, is a relatively small, but rapidly growing segment 
of the advertising industry.  The Company's major competitors in 
direct mail cooperative advertising are Val-Pak, Money Mailer, 
American Advertising Distributors and Super Coups.  Management 
estimates the Company has about 5% of that market segment.  There 
are a large number of small, independent businesses operating in 
each market segment serviced by the Company.

Employees
---------

The Company had approximately 95 employees as of December 31, 
1997.  The Company also relies upon commissioned sales 
representatives involved in the franchise sales operations and 
temporary workers during peak production periods at United 
Marketing.

Item 2. Description of Property
-------------------------------

The Company operates its corporate headquarters and its coupon 
sales and franchise activities through an office and production 
facility at 8380 Alban Road, Springfield, VA  22150.  This space 
is leased for a monthly fee of approximately $30,000 covering 
approximately 63,000 square feet.  This lease expires in April 
2005.

Item 3.  Legal Proceedings
--------------------------

The Company and its subsidiaries are involved in various legal 
actions associated with the normal conduct of business 
operations.  No such actions involve known material gain or loss 
contingencies not reflected in the consolidated financial 
statements of the Company.
 
Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

The Company's Annual Meeting of Stockholders was held on December 
30, 1997.  Mr. Steven Kronzek was nominated and elected as a 
director during the meeting, for a term of two years.  Votes 
regarding his election were 12,961,873 in favor and 113,053 
against.  The following directors continue to serve as 
directors following the meeting:

Gerard R. Bernier
Gerald Bomstad, Jr.
Leon Zajdel

In addition, the Shareholders authorized the reverse split of 
issued and outstanding shares of the Company's stock on the basis 
of one (1) share for each four (4) shares outstanding.  Voting 
regarding this matter included 12,766,961 in favor, 282,202 
against and 25,763 abstained.

Also, selection of the Company's independent accountants and 
auditors, Aronson, Fetridge & Weigle, was ratified.  Voting 
regarding this matter included 12,941,348 in favor, 85,250 
against and 48,328 abstained.
	
PART II
-------

Item 5.  Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------

On April 13, 1998, there were approximately 500 shareholders of 
record of the Company's common stock.  Based on information 
received from brokers and others in fiduciary capacity, the 
Company estimates that the total number of shareholders of the 
Company's common stock exceeds 500.  The Company's common stock 
was formerly traded on the National Association of Securities 
Dealers Automated Quotation System ("NASDAQ").  During 1997, the 
Company no longer qualified for this listing and is now available 
through electronic trading services via NASD's Electronic 
Bulletin Board.

All outstanding shares of Company stock and related options and 
warrants were reverse split on the basis of four (4) shares for 
one (1) share effective December 30, 1997.

The following table sets forth, for the periods indicated, the 
range of high and low closing bid prices for the Company's common 
stock, as reported by NASDAQ through March 1997 and as available 
through electronic trading services subsequent to such date. The 
values have not been restated for the one for four reverse split
that was effective December 30, 1997:

                                 Common Stock Bid
                            	   High            Low      
                                -------------------
1995
----
First Quarter                   $.87           $.65
Second Quarter	                  .87            .50
Third Quarter                    .75            .50
Fourth Quarter                   .56            .25

1996
----
First Quarter                    $.22           $.22
Second Quarter                    .34            .31
Third Quarter                     .38            .34
Fourth Quarter                    .25            .25

1997
----
First Quarter                    $.31           $.19
Second Quarter                    .19            .13
Third Quarter                     .07            .05
Fourth Quarter                    .05            .02


Dividends
---------

The Company has never declared a cash dividend on common stock.  
The Company intends to retain future earnings to support the 
Company's growth.  Any payment of cash dividends in the future 
will be dependent upon:  the amount of funds legally available 
therefore; the Company's earnings; financial condition; capital 
requirements; and other factors which the Board of Directors 
deems relevant.

Item 6.  Management's Discussion and Analysis of Financial 
Condition and Results of Operations
----------------------------------------------------------

Certain matters discussed herein (including the documents 
incorporated herein by reference) are forward-looking statements 
intended to qualify for the safe harbors from liabilities 
established by the Private Litigation Reform Act of 1995.  These 
forward-looking statements can generally be identified as such 
because the context of the statement will include words such as 
the Company "believes," "plans," "intends," "anticipates," 
"expects," or words of similar import.  Similarly, statements 
that describe the Company's future plans, objectives, estimates, 
or goals are also forward-looking statements.  Such statements 
address future events and conditions concerning capital 
expenditures, earnings, litigation, liquidity and capital 
resources and accounting matters.  Actual results in 
each case could differ materially from those currently 
anticipated in such statements by reason of factors such as 
future economic conditions, including changes in customer 
demands; future legislative, regulatory and competitive 
developments in markets in which the Company operates; and other 
circumstances affecting anticipated revenues and costs.

General
-------

The Company commenced operations in May 1984.  During 1985, the 
Company established its marketing office and began a concentrated 
effort of developing sales tools, procedures, and training sales 
personnel.  The first six months of operation in 1986 were 
devoted to packaging and preparing a franchise system, developing 
a sales force and documenting procedures to provide to 
franchisees.  The actual implementation of the operations as a 
franchiser commenced in October 1986.  

In July 1987, the Company acquired United Coupon Corporation, now 
United Marketing Solutions, Inc., ("United Coupon"), a franchiser 
of cooperative direct mail advertising distributorships.  On 
October 21, 1993, the Company acquired Cal-Central Marketing 
Corporation ("Cal-Central").

Liquidity and Capital Resources
-------------------------------

Management views cash, certificates of deposit, and accounts 
receivable as principle measures of liquidity.  Management also 
deems appropriately collateralized and managed bank lines of 
credit as proper means for supplementing liquidity.

In August 1994, the Company renewed a revolving and term credit 
facility with a bank, which had originally been secured to 
consolidate existing debt and to provide supplemental working 
capital for Company operations.  This renewed credit facility was 
a revolving note with a borrowing base of $600,000 at inception 
and a reducing term note with an initial borrowed amount of 
$500,000.  The term facility required monthly principal 
payments of $10,500 and both notes required monthly interest 
payments.  At December 31, 1995, the Company had borrowed 
$934,433, the maximum available on the credit facility.  The 
interest rate on the term note was 1% over bank prime and on the 
revolving note was 1.5% over bank prime.  No principal payments 
were required on the revolving note until the funds advanced on 
the facility exceeded the available borrowing base.  The loan was 
secured by accounts and notes receivable, inventory, equipment 
and other assets of the Company.  On March 4, 1996, the Company 
entered into an amended and restated credit facility, which 
extended the amount owed the bank through January of 1997.  Under 
the terms of this amended and restated agreement, the Company was 
required to make semi monthly principal payments of $20,000 plus 
accrued interest on the outstanding balance owed, beginning March 
1, 1996.  Additionally, principal payments were required to be 
made on March 1, April 1, May 1, and June 1, 1996, in that amount 
which is equal to 50% of certain Cal-Central accounts receivable 
which were collected during such periods.  For the periods July 
1, August 1, September 1, October 1, November 1, and December 1, 
1996, such additional principal payments would be made from 100% 
of the certain Cal-Central accounts receivable collected.  The 
interest rate was 1% over bank prime through June 30, 1996.  On 
July 1, 1996, the rates increased to 3% over national prime for 
the remaining term of the agreement.  The Company was required to 
maintain a collateral base equal to or greater than the balance 
outstanding on the original term note.  The Company was in 
compliance with this collateral requirement at December 31, 1995.  
On August 15, 1996, the Company entered into a consolidated 
renewal promissory note with BancFirst in the face amount of 
$721,425, with interest at the prime rate plus 1%.  The note is 
payable in monthly installments, including interest, of $22,500 
through January 15, 1997 and $27,500 through December 15, 1998.  
The note matures December 31, 1998.  The note is collateralized 
by substantially all assets of the Company.  At December 31, 
1997, the Company is in default for nonpayment in accordance with 
the terms of the loan.  The balance outstanding at December 31, 
1997 was $530,940.  As a result of on-going negotiations, during 
1997 the bank accepted payments at less than the stated terms in 
the note.

On December 31, 1991, the Company entered into a $1,250,000 
Convertible Debenture financing with Renaissance Capital 
Partners, Ltd.  The debenture was in the form of a seven-year 
note with interest only payable quarterly during years one 
through three.  Beginning in 1995, unless waived, the Company was 
to begin quarterly principal payments, plus interest, in an 
amount sufficient to amortize 50% of the outstanding principal 
balance over the final four years of the note.  The remaining 
principal amount was due and payable December 31, 1998.  
On March 4, 1996, Renaissance executed a subordination agreement 
which deferred all principal and interest payments regarding this 
debenture until July 1997 or until such time as the current 
amount owed to the bank was extended under terms which would 
allow such payments.  During 1995, Renaissance and Duncan-Smith 
Investment Co. loaned the Company an additional $298,500 under 
several notes that were convertible into common stock of the 
Company at $.25 per share.  On July 12, 1996, the Company, 
Renaissance and Duncan-Smith entered into a loan conversion 
agreement whereby the debenture, notes and accrued interest 
related thereto were exchanged for 1,712,739 (428,185 after giving
effect to the one for four reverse split effective December 30, 1997)
shares of Series C Preferred Stock of the Company.  Each share of 
Series C Preferred Stock is convertible into four shares of the 
Company's common stock at any time, at the option of the Holder.

On October 21, 1993, the Company and AEC Acquisition, Inc. 
("AEC"), a wholly-owned subsidiary of the Company, entered into a 
definitive Agreement for the merger of Cal-Central Marketing 
Corporation, a Florida Corporation ("Cal-Central/Florida") into 
AEC.  The merger was effected on October 27, 1993, through the 
issuance of 1,200,000 (300,000 after giving effect to the one for 
four reverse split effective December 30, 1997) shares of restricted 
Common Stock of the Company, 600 shares of Redeemable Preferred Stock 
of the Company, and 1,000 shares of Series A Convertible Preferred 
Stock of the Company.  The terms of the Redeemable Preferred Stock 
provided that such shares be redeemed at any time as an option of the 
Company or, at the holders' option after certain profit performance 
tests were met by Cal-Central.  The shares of Series A Convertible 
Preferred Stock of the Company were mandatorily convertible into 
Common Stock of the Company after 12 months, and after certain profit 
performance tests by Cal-Central for such period.  The conversion 
rights of the Series A Convertible Preferred Stock expired in October 
1994 with performance tests not achieved.  In March 1995, 320 shares of 
the Redeemable Preferred Stock were converted to 355,556 (88,889 after 
giving effect to the one for four reverse split effective December 30,
1997) shares of Common Stock of the Company at a conversion price of 
$.90 per share.  The terms of the remaining Redeemable Preferred Stock 
of the Company provide that the shares are redeemable by the Company at 
any time or by the holders after certain profit performance tests 
are met by Cal-Central.  Funds to be utilized in redeeming the 
remaining Redeemable Preferred Stock were to be provided through 
collection of existing notes receivable from stockholders.  
During 1996, the collectibility of these loans became doubtful 
and an allowance for the full amount of the loans was recorded.  
These loans were charged off during 1997.  The Redeemable 
Preferred Stock pledged as collateral for the loans was 
reacquired and cancelled.

As a result of the merger, the name of AEC, the surviving 
corporation, was changed to Cal-Central Marketing Corporation 
("Cal-Central").

In the fourth quarter of 1993, the Company received $250,000 in 
proceeds from the private offering of 400,000 (100,000 after giving 
effect to the one for four reverse split effective December 30, 1997)
shares of the Common Stock of the Company and $435,000 from the private
sale of five year unsecured subordinated debentures with interest at 
10.5% through October 1996, and 12% from November 1996 through 
October 1998.  These proceeds were utilized to pay Cal-Central 
acquisition costs of $52,552 to reduce debt of Cal-Central and to 
provide working capital.  Management believes it is in the best 
interest of shareholders, lenders and the Company that these 
debentures be converted in whole or in part to equity in the 
Company.  Discussions to effect such conversion, as a component 
of the overall restructuring of all long term debt for the 
Company, have been initiated.  Also, the holders of these 
debentures have been required, as a provision of the amended and 
restated loan agreement with the bank, to defer all requirements 
for receipt of principal and interest until July 1997.  
Management believes that cash flow from operations and from 
available borrowing capacity will not be sufficient to pay the 
debentures upon maturity unless a significant portion is 
converted to equity.

The acquisition of Cal-Central was accounted for as a purchase 
with a price of approximately $1,400,000.  The operating results 
have been included in the consolidated financial statements from 
October 22, 1993 through 1996 when the company was dissolved. The 
Company acquired assets of $1,887,242 and assumed liabilities of 
$2,687,824.  The excess purchase price over the fair value of the 
net assets acquired was recorded as goodwill and was initially 
amortized on the straight line method over a forty year life.

Several factors were considered in determining the purchase price 
for Cal-Central which, in management's opinion, supported a 
purchase price that was approximately $1,400,000 in excess of the 
fair value of the Cal-Central assets acquired.  These factors 
included opportunities to increase profitability by reducing 
inordinately high interest rates paid historically by Cal-Central 
on borrowed funds, reducing high bank charges paid by Cal-Central 
due to limited cash management practices, and reducing costs 
associated with services performed by third parties for Cal-
Central by bringing these functions into the Company.  Also, the 
cooperative advertising products and distribution channels of 
Cal-Central were logical compliments to those of the Company's 
subsidiary, United Marketing.

The excess purchase price of $1,400,000 over the fair value of 
the assets acquired is equal to the initial negative book equity 
of Cal-Central of approximately $800,000 plus the value of the 
restricted common stock provided of $600,000.  Only the par value 
of $16 was initially assigned to the Preferred Stock proceeds 
provided in the purchase, due to the fact that redemption of the 
preferred stock was at the Company's discretion or dependent 
upon the achieving of pre-tax operating profits of $500,000 by 
Cal-Central within a consecutive twelve month period following 
the acquisition, in order for the Redeemable Preferred Stock to 
be redeemed upon demand from the holders.  In February 1995, The 
Company converted 355,556 shares of common stock for 320 shares 
of redeemable preferred stock, in lieu of future redemption of 
such stock for $320,000 in cash.  This transaction 
resulted in the addition of $124,441 of goodwill as contingent 
purchase price proceeds related to the acquisition of 
Cal-Central. The value of the remaining Redeemable Preferred 
Stock, 280 shares, is also considered contingent purchase 
proceeds and will be reflected at par value until the stock is 
redeemed or otherwise retired.  During 1996, the Cal-Central 
operation was closed and the remaining unamortized goodwill was 
written off.

In February 1995, the Company exchanged 221,018 (55,255 after giving
effect to the one for four reverse split effective December 30, 1997)
shares of common stock at a market value of $.90 per share, in full 
payment of $198,917 of amounts owed by Cal-Central.  These shares, along 
with 355,556 (88,889 after giving effect to the reverse split) shares 
issued in exchange for redeemable preferred stock, were subsequently 
registered in April 1995 via Form S-3 Registration Statement. 

For the Period Ended December 31, 1997
--------------------------------------

At December 31, 1997, the Company's working capital position, 
current assets minus current liabilities, was a negative 
$2,809,441.  Working capital was impacted by the $916,666 loss 
from operations as well as use of $164,597 in cash and 
equivalents during the year to purchase property and equipment 
related to the United Marketing art and printing facility, and 
$49,530 for net payment of notes payable.  In addition: short 
term notes and accounts receivable declined by $360,771, as a 
result of lower levels of business activity; inventories declined 
by $20,812 due to utilization of stocks built in prior periods; 
and prepaid expenses and other assets declined by $71,024 due to 
utilization of accrued expenses and amortization of prepaid 
items.  Also, accrued liabilities and accounts payable increased 
by $85,935 and deferred rent increased by $91,594 as a result of 
accelerated recognition of deferred rental payments as current 
period expenses.

Total assets for the Company declined 23% during 1997.  This 
change reflects the changes in current assets and property 
noted above, as well as write-off of $224,932 of goodwill related 
to the election to discontinue UNICO's ownership of United 
Marketing Solutions, Inc.

Long-term liabilities decreased by $658,059 during 1997 as a 
result of required net principal payments made of $49,530 and 
reclassification of items previously classified as long term to 
short term.

Management has considered operating losses and acquisitions which 
have required substantial utilization of funds, as well as 
anticipated operating and debt service requirements for the near 
term, and believes that sufficient liquidity may not be available 
from working capital to support the requirements of continuing 
operations for the foreseeable  future.  As a result, management 
has taken steps to assure continued operation.  These actions 
include the election to seek a buyer for United Marketing 
Solutions, Inc.  Because of this election, the accompanying 
financial statements reflect the operations of United Marketing 
Solutions, Inc. as a discontinued operation.  The ultimate 
outcome from this strategic action cannot be assured at this 
time.

Results of Operations - Year Ended December 31, 1997 Compared to 
the Year Ended December 31, 1996
----------------------------------------------------------------

Total Revenues for the Company decreased by 76% during 1997, 
after restatement of both periods to reflect the plan to 
discontinue the operations of the Company's remaining operating 
subsidiary, United Marketing.  This decline reflects a decline of 
$19,049 in printing, advertising and design sales to third 
parties and a $73,521 decline in other revenue associated with 
reimbursement of expenses and non-recurring miscellaneous 
revenues.

Total expenses decreased by approximately 85% during 1997, after 
restatement of both periods to reflect the plan to discontinue 
United Marketing.  Included in total expense in 1996 is $187,661 
of non-recurring cost of sales related to cooperative advertising 
activities conducted by the Company during the initial months of 
1996, while restructuring efforts were attempted for Cal-Central.  
Included in 1996 costs is $956,913 of one-time charges related to 
closing Company locations and other one-time charges, as well as 
$1,692,710 in one-time costs associated with abandonment and re-
evaluation of assets.  General and Administrative Expenses 
declined by 33% during 1997 due to consolidation of 
administrative functions throughout the year.  In addition, 
interest expense declined during 1997 by 40% due to the 
conversion of subordinated debt to equity, as disclosed.

Loss from operations of subsidiary to be sold, United Marketing,  
was $407,244 net of a $231,000 tax benefit related thereto, for 
1997, compared to income of $163,653, net of an income provision 
of $100,200, for 1996.  Operating results of the United Marketing 
for 1997 included $5,779,440 of total revenue compared to 
$6,704,158 in 1996.  Total operating expenses for 1997 were 
$6,417,784 compared to $6,440,305 for 1996.  The decline in total 
revenue is related to a 13% decline in the subsidiary's 
commercial printing, design and advertising sales, as well as a 
40% decline in franchise fee revenue.  The decline in total 
operating expenses in 1997 is related to a 4% decline in cost of 
sales, partially offset by an 8% increase in general and 
administrative expense.

For fiscal 1997, the Company incurred a consolidated loss of 
$916,666 compared to a net loss of $3,343,449 in 1996.  This 
reduced loss reflects the net impact of operating losses and 
additional losses incurred during 1996 related to the 
abandonement and closure of Cal-Central compared to the loss from 
operation incurred during 1997 related to the discontinued 
business segment, United Marketing.

Item 7. Financial Statements
----------------------------

The financial statements of the Company, together with the report 
of auditors, are included in the report after the signature 
pages.

Item 8.   Changes In and Disagreements With Accountants on 
Accounting and Financial Disclosure
----------------------------------------------------------

None 

PART III
--------

Item 9. Directors, Executive Officers, Promoters and Control 
Persons:   Compliance With Section 16(a) of the Exchange Ad
------------------------------------------------------------

The directors and officers of the Company and its subsidiaries, 
as of April 13, 1998, are set forth below. The directors hold 
office for their respective term and until their successors are 
duly elected and qualified. Vacancies in the existing Board are 
filled by majority vote of the remaining directors. The officers 
serve at the will of the Board of Directors.

		       With Company
Name       		   Age   Since     Director/Position	
------------------------------------------------------------	
Gerard R. Bernier	   48	   1987    Chairman of the Board, 
                                   Chief Executive Officer &     
                                   President

Gerald Bomstad, Jr.  70    1993    Director

Leon Zajdel          50    1990    Director

Steven Kronzek       48    1997    Director

Subhash Ghei         54    1994    Corporate Secretary and  
                                   Treasurer, Chief Financial 
                                   Officer

Business Experience
-------------------

Gerard R. Bernier was founder and has been a Director of United 
Marketing Solutions, Inc., formerly United Coupon Corporation, of 
Springfield, Virginia, since November 1981, and Chief Executive 
Officer since August 1985.   Mr.  Bernier has held the position 
of Vice President and Vice Chairman of the Board of Directors 
of UNICO, Inc. since November, 1991. He was elected Chief 
Executive Officer & President effective April 1, 1996.  Prior to 
1981, Mr. Bernier was an executive with various advertising and 
manufacturing companies.

Gerald Bomstad, Jr. has been an investor and a Director of Cal-
Central Marketing Corporation since its inception in 1983. Mr. 
Bomstad held various positions with Automation Industries, Inc., 
from 1951 to 1986. In 1951, he began his career as a staff 
accountant. In 1960, he became the General Manager of the 
Aerospace Division. In 1962, he was appointed Vice President, 
Treasurer and Controller. From 1968 to 1978, he served as 
Senior Vice President and Controller. From 1978 to 1986, after 
Automation Industries became a subsidiary of Penn Central 
Corporation, Mr. Bomstad served as President of the Manufactured 
Productions Group. In 1986, he led a group of investors and 
management in a spin-off of three divisions of Penn Central and 
was appointed President and Chief Executive Officer of the new 
operation. He has been active as a consultant, investor and 
director for various enterprises.  He became a Director of the 
Company on October 26, 1993, when the Company acquired Cal-
Central Marketing Corporation.

Leon Zajdel was founder and has served as President of Energy 
Guard Corp., a manufacturer and retailer of replacement windows, 
located in Beltsville, Maryland, since 1972. Mr. Zajdel served as 
a director of United Coupon Corporation from April, 1985 to 
November, 1991, and has served as a director of the Company since 
July, 1990.

Steven Kronzek  was a founding partner in November 1977 and has 
continued as partner of the accounting firm of Kronzek & Company, 
located in Washington, DC.  Mr. Kronzek was elected to the 
Company's Board of Directors in June 1997.  He has served as an 
independent accountant for the Company's wholly-owned 
subsidiary, United Marketing Solutions, Inc., since January 1982.

Subhash Ghei, Controller, Secretary and Treasurer of United 
Coupon Corporation since 1994, was appointed Chief Financial 
Officer, Secretary and Treasurer of UNICO, Inc. and subsidiaries 
effective August 8, 1996.  Prior to joining the Company he was 
employed with several organizations in management, accounting and 
administrative positions.  He earned his Bachelors Degree with 
emphasis in accounting and economics from the University of Delhi 
in 1972 and another Bachelors Degree in Business Administration 
from the University of Phoenix in 1987.  He also holds a Masters 
Degree in Business Administration from Averett College.

Certain Legal Proceedings
-------------------------

No director; nominee for director, or executive officer of the 
Company has appeared as a party in any legal proceeding material 
to an evaluation of his ability or integrity during the past five 
years.

Item 10. Executive Compensation
-------------------------------

The following information relates to compensation received by the 
executive officers who were serving as of December 31, 1997, 
whose salary and bonus during fiscal 1997 exceeded $100,000.

Summary Compensation Table
Annual Compensation
---------------------------

Name and Principal Position      Year      Salary      Bonus(l)
----------------------------------------------------------------
Gerard R. Bernier                1997    $156,668 (2)       $0
Chief Executive Officer          1996    $125,000           $0
and President                    1995    $124,403      $50,347

(1) Bonus amounts are reflected in the year received by the 
employee. All bonus payments relate to services performed, and 
incentive goals met by the employee during the prior year. 
Expenses for such compensation are accrued and reflected in the 
operating statements of the year such services are performed.

(2) Includes payment of $30,000 for accrued, unused vacation time 
as approved by the board of directors.


Aggregated Option Exercises in Fiscal Year Ending December 31. 
1996 and Fiscal Year-End Option Values
--------------------------------------------------------------
                                                    Value of
                                               Number of        Unexercised
                                               Unexercised      In-the-Money  
                                               Options at       Options at
                                               12-31-97(1)      12-31-97(2)
                  Shares Acquired   Value      Exercisable/     Exercisable/
                  on Exercise (#)   Realized   Unexercisable    Unexercisable
                  ---------------   --------   -------------    -------------
Gerard R. Bernier	      -              -        46,250 Exer.    $0 Exer.(2)

---------------------------

(1) There were no options granted to Officers or Directors during 
fiscal year 1997.

(2) This amount reflects the difference between the market value 
of the Company's Common Stock on December 31, 1997 and the 
exercise price.

Compensation Pursuant to Plans - Omnibus Equity Compensation 
Plan. The Company has adopted an Omnibus Equity Compensation Plan 
(the "Plan") under which 250,000 shares of Common Stock have been 
reserved for issuance upon exercise of options granted pursuant 
to the Plan. Under the Plan, incentive stock options may be 
granted to employees, and non-qualified stock options may be 
granted to employees, Directors, Franchisees, and other persons, 
as the Compensation Committee determines will assist the 
Company's business endeavors, at exercise prices equal to at 
least 100% of the fair market value of the Common Stock on the 
date of grant. In addition to selecting the options, the 
Compensation Committee determines the number of shares subject 
to each option and otherwise administers the Plan. Options 
granted under the Plan are not exercisable until six months after 
grant and expire a minimum of three years or maximum of five 
years after the date of grant, provided employment is continued. 
As of April 13, 1998, options to purchase 71,211 shares are 
outstanding under the Plan, including options for 46,250 shares 
to officers of the Company. These options have been granted at 
exercise prices ranging from $1.00 to $4.64. The average exercise 
price for all outstanding options is approximately $1.80 per 
share. The shares underlying the options were registered during 
1994.

Employment Agreements. The Company's subsidiary United Marketing 
Solutions, Inc. has entered into an Employment Agreement with 
Gerard R. Bernier to serve as the Chief Executive Officer and 
President of that Company.  The major terms of this Agreement 
provide for a base salary of $125,000 plus a company provided 
automobile or monthly allowance, and an incentive bonus based 
upon the pre-tax profitability of United Marketing. The Agreement 
provides for an annual cost of living increase based upon annual 
increases in the Consumer Price Index of the general area 
surrounding the home office of United Marketing.  The Agreement 
was entered into on April 1, 1996 and extended through March 31, 
1999.

Item 11. Security Ownership of Certain Beneficial Owners and 
Management
------------------------------------------------------------

The following table sets forth as of April 1, 1997, information 
with respect to the beneficial ownership of the Company's Common 
Stock by (i) each person known by the Company to own beneficially 
5% or more of such stock, (ii) each Director of the Company who 
owns any Common Stock, and (iii) all Directors and Officers as a 
group, together with their percentage of beneficial holdings of 
the outstanding shares. 

            
                              Number of Shares of
Name of Beneficial Owner/	      Common Stock  	    % of Beneficial
   Identity of Group 	        Beneficially Owned 	   Ownership (1)
-------------------------    -------------------   ---------------
Renaissance Capital             1,589,220 (2)  	        42.85%
Partners, Ltd. 	
8080 North Central Expressway
Suite 210 LB 59
Dallas, TX 75206-1857

Gerard R. Bernier                 215,682 (3)            9.68%
8380 Alban Road
Springfield, VA 22150

Gerald Bomstad, Jr.     	         205,900 (4)            9.65%
422 Montigue, Suite 6
Greenwood, SC 29649

Duncan Smith Company              182,099 (6)            7.91%
311 Third
San Antonio, TX  78205

Officers and Directors      	     427,832 (3)(4)(5)	19.04%
As a Group

------------------

(1) Percent is rounded to one decimal place.

(2) Includes 1,589,220 shares, the current maximum amount that 
Renaissance is entitled to receive upon conversion of the Series 
C Preferred Stock issued in July 1996.  Such preferred shares are 
convertible at the option of the Holder at any time.

(3) Includes 46,250 shares which may be purchased at $1.00 per 
share pursuant to the Company's Omnibus Equity Compensation Plan 
and 62,500 shares which have been granted to Mr. Bernier subject 
to continued employment for a specified period.

(4) Includes 12,500 shares which may be purchased at $3.88 per 
share pursuant to the Company's Omnibus Equity Compensation Plan 
and 13,750 shares which are issued, but restricted from sale 
until certain profit performance tests are met by Cal-Central 
Marketing Corporation.

(5) Includes shares underlying stock options granted to Mr. 
Bernier and Mr. Bomstad, as well as, 6,250 shares which may be 
purchased at $1.00 per share by Leon Zajdel, a Director of the 
Company, pursuant to the Company's Omnibus Equity Compensation 
Plan.

(6) Includes 168,349 shares, the current maximum amount that 
Duncan-Smith is entitled to receive upon conversion of the Series 
C Preferred Stock issued in July 1996, plus 13,750 stock purchase 
warrants which entitle the holder to purchase common stock at a 
minimum of $3.60 per share.

Item 12. Certain Relationships and Related Transactions
-------------------------------------------------------

Transactions with Management and Others
---------------------------------------

No business relationship between the Company and any business or 
professional entity, for which a director of the Company has 
served during the last fiscal year or currently serves as an 
executive officer of, or has owned a 10% record or beneficial 
interest in, has existed since the beginning of the Company's 
last fiscal year, or currently exists, which represented or will 
represent payments for property or services in excess of 5% of 
the Company's gross revenues for its last full fiscal year or of 
the other entity's consolidated gross revenues for its last 
full fiscal year.

In addition, except as noted below, the Company did not owe, at 
the end of its last fiscal period, to any business or 
professional entity for which a director of the Company has 
served during the last fiscal year or currently serves as an 
executive officer, or has owned during the last fiscal year or 
currently owns a 10% record or beneficial interest in, an 
aggregate amount in excess of 5% of the Company's total assets at 
the end of its last fiscal period.  No director of the Company 
has served as a partner or executive officer of any investment 
banking firm that performed services for the Company during the 
last fiscal year or that the Company proposes to have perform 
services during the current year, except as noted below.

During 1997, the President of the Company and his wife pledged a 
personal $75,000 certificate of deposit and a personal gurantee 
for $25,000 to a bank as collateral for a $100,000 line of credit 
extended to the Company.  There were no borrowings on the line 
during 1997.

At the end of the last fiscal year and at April 13, 1998, the 
Company has 397,305 shares of Series C Preferred Stock issued to 
Renaissance Capital Partners, Ltd.  Russell Cleveland, who served 
as a Director of the Company until the Annual Meeting of 
Shareholders on December 2, 1996, is a major owner and Managing 
General Partner of Renaissance Capital Partners, Ltd.  The Series 
C Preferred Stock was issued to Renaissance upon conversion of a 
$1,250,000 Convertible Debenture entered into with Renaissance in 
1991 and a Subordinated Convertible Note in the amount of 
$149,250 entered into with Renaissance during 1995.  Mr. 
Cleveland did not serve as a Director of the Company at the time 
that the Convertible Debenture was issued.  Mr. Cleveland was a 
director in 1995, when the Company entered into the Subordinated 
Convertible Note with Renaissance, to provide interim financing 
to support the working capital requirements.  This note was 
deemed to be in the best interests of the Company and its 
shareholders and was entered into on an arms length basis, at the 
request of Company management.

The Company advanced $280,000, in prior periods, to two former 
officers of its subsidiary, Cal- Central Marketing Corporation, 
Jack Brown, formerly President, and Gerald Bomstad, Jr., formerly 
Executive Vice President.  These advances were evidenced by notes 
which were payable on demand by the Company.  These notes 
originally bore interest at 4%, but subsequent to October 26, 
1995, bore an annual interest rate of 10%.  Redeemable preferred 
stock, with cash redemption value of an amount equal to the 
principal value of these advances, was pledged as security for 
the advances.  These notes were deemed uncollectible and were 
fully reserved during 1996.  They were charged off during 1997.

The Company believes the terms of these transactions are as 
favorable as it might have obtained from unaffiliated parties.

PART IV
-------

Item 13. Exhibits and Reports on Form 8-K
-----------------------------------------

(a)   The following documents are filed as part of this report: 

1.  Financial statements; see index to financial statement and 
schedules immediately following the signature pages of this 
report. 

2.  Financial statement schedules; see index to financial 
statements and schedules immediately following the signature 
pages of this report. 

3.  Exhibits:

The following exhibits are filed with this Form 10-KSB and are 
identified by the numbers indicated; see index to exhibits 
immediately following financial statements and schedules of this 
report.

2  Plan of Reorganization and Agreement of Merger among UNICO, 
Inc., AEC Acquisitions, Inc. and Cal-Central Marketing 
Corporation(1)

3.1  Certificate of Incorporation, as amended(2)

3.2  Bylaws, as amended(2)

3.3  Amendment to the Certificate of Incorporation to increase 
the authorized shares of Common Stock(3)

3.4  By-laws, as amended (8)

4.1  Form of Common Stock Purchase Warrant, dated September 11, 
l986(4)

4.2  Form of Class B Common Stock Purchase Warrant dated November 
1, 1993(3)

4.3  Form of Subordinated Debenture dated October 26, 1993, 
offered through Duncan Smith Co.(3)

4.4  Certificate of Designations, Preferences, and Rights of 
Series A Convertible Preferred Stock(3)

4.5  Certificate of Designations, Preferences, and Rights of 
Series A Redeemable Preferred  Stock(3)

4.6  Certificate of Designations, Preferences, and Rights of 
Series B Redeemable Preferred Stock(3)

4.7  Certificate of Designations, Preferences, and Rights of 
Series C Preferred Stock (8)

10.1  Employment Agreement between Cal-Central Marketing 
Corporation and Jack Brown. (1)

10.2  Employment Agreement between Cal-Central Marketing 
Corporation and Gerald Bomstad, Jr. (1)

10.3  Lease of executive offices at 1101-B Sovereign Row, 
Oklahoma City, OK 73108. (3)

10.4  Form of Common Stock Purchase Warrant dated October 26, 
1993 offered through Duncan-Smith Co. (3)

10.5  Second Amendment to Lease Agreement Cal-Central Marketing 
Corporation.(3)

10.6  United Coupon Corporation Franchise Agreement. (2)

10.7  Employment Agreement between United Coupon Corporation and 
Gerard R. Bernier, as amended January 1, 1995. (5) 

10.8  Employment Agreement between UNICO, Inc. and W. Douglas 
Frans. (2)

10.9  Credit Agreement by and Between UNICO, Inc., and its 
subsidiaries and BancFirst. (2)

10.10  Purchase Agreement with Concord Video. (2)

10.11  Omnibus Equity Compensation Plan. (2)

10.12  Convertible Debenture Loan Agreement by and between UNICO, 
Inc. and its subsidiaries, United Coupon Corporation and AEC 
Acquisitions, Inc. and Renaissance Capital Partners, Ltd. Dated 
December 31, 1991.(2)

10.13  Amended and Restated Loan Agreement by and between UNICO, 
Inc. and its subsidiaries and BancFirst as amended August 31, 
1994. (5) 

10.14  Promissory Note of Jack Brown. (3)

10.15  Promissory Note of Gerald Bomstad, Jr. (3)

10.16  Novation(3)

10.17  Restructure Agreement Among UNICO, Inc., Cal-Central 
Marketing Corporation, and The American Education Corporation, 
dated as of December 31, 1993. (3)

10.18  United Coupon Corporation Lease Agreement. (5)

10.19  Master Agreement and Schedules of Indebtedness 1 and 2 
between CIT Group and United Coupon Corporation. (5)

10.20  Machinery Contract between MAN Roland, Inc. and Cal-
Central Marketing Corporation. (5) 

10.21  Exchange Agreement between Gerald Bomstad and the Company 
dated February 22, 1995. (6)

10.22  Exchange Agreement between Jack Brown and the Company 
dated February 22, 1995. (6)

10.23  Debt Exchange Agreement between Graphic Rolls Unlimited 
and the Company dated February 22, 1995. (6)

10.24  Debt Exchange Agreement between McCollum & Bunch and the 
Company dated February 22, 1995. (6)

10.25  Debt Exchange Agreement between Walter Rose and the 
Company dated February 22, 1995. (6)

10.26  Debt Exchange Agreement between Ronald Martin and the 
Company dated February 22, 1995. (6)

10.27  Subordinated Loan Agreement dated June 30, 1995, among 
UNICO, Inc. and Cal-Central Marketing Corporation and the Harlon 
Morse Fentress Trust, Philip M. Stevenson, Jr., RHOJOAMT 
Partnership, Ltd., CITCAM Stock Co., Barbara T. Grinnan, and 
Goose Creek.  (7)

10.28  Form of Common Stock Purchase Warrant, dated June 30, 
1995.  (7)

10.29  Subordinated Convertible Debt Loan Agreement dated 
October, 1995, and schedule of advances, among UNICO, Inc., 
United Coupon Corporation, and Cal-Central Marketing Corporation 
and Renaissance Capital Group, Inc. and Duncan-Smith Company.  
(7)

10.30  Debt Exchange Agreement among UNICO, Inc., Renaissance 
Capital Partners, Ltd. and Duncan-Smith Investment Co. dated July 
1996. (8)

10.31  Debt Exchange Agreement among UNICO, Inc., Renaissance 
Capital Partners, Ltd and Duncan-Smith Investment Co., dated July 
1996. (8)

10.32  Employment Agreement Between United Coupon Corporation and 
Gerard R. Bernier dated April 1, 1996. (7)

10.33  Modification and Extension to the Third Restated Loan 
Agreement between UNICO, Inc., United Coupon Corporation, Cal-
Central Marketing Corporation and BancFirst dated August 15, 
1996. (10)

10.34  Consolidated Renewal Promissory Note between UNICO, Inc., 
United Coupon Corporation, Cal-Central Marketing Corporation and 
BancFirst dated August 15, 1996. (10)

10.35  Loan Conversion Agreement between UNICO, Inc. and Kurt 
H.C. Bottcher dated September 30, 1996. (10)

16  Letter from Arthur Andersen, LLP to Securities & Exchange 
Commission dated December 3, 1996. (9)

21  List of Subsidiaries(3)

27  Financial Data Schedule - Pursuant to EDGAR filing 
requirements for the period ended December 31, 1997, filed 
herewith this Form 10-KSBA dated April 15, 1998. 

(b)  Reports on Form 8-K. - None.

-------------------

(1)  Incorporated by reference to the Registrant's Form 8-K,  
October 27, 1993 (SEC File No. (0-15303).

(2)  Incorporated by reference to the Registrant's Form 10-K for 
the fiscal year ending December 31, 1992 (SEC File No. 0-15303).

(3)  Incorporated by reference to the Registrant's Form 1O-KSB 
for the fiscal year ending December 31, 1993 (SEC File No. 0-
15303).

(4)  Incorporated by reference to the Registrant's Form S-18 
registration statement (SEC File No. 33-73 10-FW).

(5)  Incorporated by reference to the Registrant's Form 10-KSB 
for the fiscal year ended December 31, 1994, (SEC File No. 0-
15303).

(6)  Incorporated by reference to the Registrant's Form S-3 dated 
April 28, 1995 (SEC File No. 33-91270).

(7)  Incorporated by reference to the Registrant's Form 10-KSB 
dated April 15, 1996 (SEC File No. 0-15303).

(8)  Incorporated by reference to the Registrant's Form 8-K dated 
July 30, 1996 (SEC File No. 0-15303).

(9)  Incorporated by reference to the Registrant's Form 8-K/A 
dated December 12, 1996 (SEC File No. 0-15303).

(10)  Incorporated by reference to the Registrant's Form 10-KSB 
dated April 15, 1997 (SEC File No. 0-15303).


SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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, Inc.


April 15, 1998                              	

By:	/s/Gerard R. Bernier
    Chief Executive Officer and President

         
Pursuant to the requirements of the Securities Exchange Act of 
1934, this report has been signed below by the following persons 
on behalf of the registrant and in the capacities and on the 
dates indicated.	
	

Name 	                         Title	                    Date
----                           -----                     ----

/s/Gerard R. Bernier      Chief Executive Officer    April 15, 1998
                          Chairman of the Board

/s/Subhash Ghei           Chief Financial officer    April 15, 1998


/s/Gerald Bomstad, Jr.    Director	                  April 15, 1998


/s/Leon Zajdel            Director                   April 15, 1998


/s/Steven Kronzek         Director                   April 15, 1998


UNICO, Inc.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                        Page
                                                        ----
Report of Independent Public Accountants - 1997          22

Consolidated Financial Statements:
Consolidated of Financial Condition, December 31, 1997   23
Consolidated Statements of Operations for the 
Years Ended December 31, 1997 and 1996                   25
Consolidated Statements of Stockholders' Equity 
Deficiency for the Years Ended 
December 31, 1997 and 1996                               27
Consolidated Statements of Cash Flows for the				
Years Ended December 31, 1997 and 1996                   28
Notes to Consolidated Financial Statements               30


All other schedules are omitted because of the absence of the 
condition under which they are required or because the 
information is included in the financial statements or notes 
thereto.

Independent Auditor's Report

Board of Directors and Stockholders
UNICO, INC. AND SUBSIDIARIES
Springfield, Virginia


We have audited the accompanying Consolidated Statement of Financial 
Condition of UNICO, INC. AND SUBSIDIARIES as of December 31, 1997, 
and the Consolidated Statements of Operations, Stockholders' Equity 
(Deficiency) and Cash Flows for the years ended December 31, 1997 and 
1996.  These financial statements are the responsibility of the Company's 
management.  Our responsibility is to express an opinion on these 
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are 
free of material misstatement.  An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial 
statements.  An audit also includes assessing the accounting principles 
used and significant estimates made by management, as well as 
evaluating the overall financial statement presentation.  We believe that 
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of UNICO, INC. AND SUBSIDIARIES as of December 31, 1997, and the 
consolidated results of their operations and their cash flows for the years 
ended December 31, 1997 in conformity with generally accepted 
accounting principles.

The accompanying financial statements have been prepared assuming 
that the Company will continue as a going concern.  As discussed in Note 
17 to the financial statements, the Company has suffered losses from 
operations in 1997 and 1996, its consolidated current liabilities  exceeded 
its consolidated current assets by approximately $2,810,000 and the 
Company is in default of its bank loan as of December 31, 1997.  These 
conditions raise substantial doubt about the Company's ability to continue 
as a going concern.  Management's plans regarding these matters are 
also described in Note 17.  The financial statements do not include any 
adjustments that might result from the outcome of this uncertainty.


ARONSON, FETRIDGE & WEIGLE

Rockville, Maryland
February 11, 1998


UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1997

ASSETS

CURRENT ASSETS
Cash and cash equivalents (Note 1)                    $  129,860
Accounts and notes receivable - trade 
(net of allowance for doubtful accounts 
of $60,000)                                              292,003
Other receivables                                          2,877
Inventory (Note 1)                                       119,203
Prepaid expenses                                           9,140
                                                   -------------
Total current assets                                     553,083
                                                   ------------- 
PROPERTY AND EQUIPMENT, AT COST 
(NOTES 1 AND 2)
Printing and office equipment                          3,428,274
Computer equipment and software                          604,591
Transportation equipment                                 138,693
Leasehold improvements                                    63,063
                                                   -------------    
Total                                                  4,234,621
Less:  Accumulated depreciation                       (2,166,065)
                                                   ------------- 
Net property and equipment                             2,068,556
                                                   -------------  
DEPOSITS AND OTHER ASSETS                                 18,302
                                                   -------------
TOTAL ASSETS                                       $   2,639,941

The accompanying Notes to Financial Statements are an integral part of 
these financial statements.

LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                   $  1,307,198
Accrued liabilities (Note 3)                            485,433
Current portion of long-term liabilities 
(Note 2)                                              1,449,384
Deferred revenue (Note 1)                               120,509
                                                   ------------
Total current liabilities                             3,362,524

LONG-TERM LIABILITIES
Notes payable (Note 2)                                  360,622
Deferred rent (Note 4)                                  320,874
                                                   ------------
Total long-term liabilities                             681,496
                                                   ------------
Total liabilities                                     4,044,020
                                                   ------------
COMMITMENTS AND CONTINGENCIES 
(NOTES 4, 5, 16, 17 AND 19)

DEFICIENCY IN STOCKHOLDERS' EQUITY (NOTE 6)
Preferred stock, $.01 par value; 5,000,000 
shares authorized, designated as:
Redeemable preferred; 70 shares issued and 
outstanding (adjusted for the 1 for 4 reverse 
split in December 1997)                                       1
Series A Convertible Preferred                            -      
Series B Preferred                                        -      
Series C Preferred stock - $.01 par value; 
voting on the basis of 4 votes to 1 vote for 
the common stock, preferred in liquidation 
at $1 per share over common stockholders, 
convertible into common stock on the basis 
of 4 common shares for each preferred 
share with automatic conversion on 
August 1, 1998; 2,000,000 shares authorized, 
428,185 shares issued and outstanding, 
(adjusted for the 1 for 4 reverse split in 
December 1997) (Note 7)                                   4,282
Common stock - $.01 par value; 20,000,000 
shares authorized, 2,119,077 shares issued 
and outstanding (adjusted for the 1 for 4 
reverse split in December 1997) (Notes 8, 9, 
10, 11 and 12)                                           21,191
Additional paid-in capital                            6,801,008
Deferred compensation (Note 10)                          (4,557)
Accumulated deficit                                  (8,226,004)
                                                   -------------
Total deficiency in stockholders' equity             (1,404,079)
                                                   -------------
TOTAL LIABILITIES AND DEFICIENCY IN 
STOCKHOLDERS' EQUITY                               $  2,639,941
                                                   -------------

UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

                                               1997  	        1996
                                              -------        -------
REVENUE (NOTES 1 AND 16)
Printing, design and advertising 
sales, net of discounts and allowances       $	   -        $   19,049
Other                                           29,147        102,668
                                             ---------     ----------
Total revenue                                   29,147        121,717

EXPENSES
Cost of sales                                     -            187,661
General and administrative                     401,959         600,029
General and administrative associated 
with closed locations and other one 
time charges                                      -            956,913
interest expense - affiliate	                     -             87,514
Interest expense - other                       173,964         204,192
Loss on abandonment and 
revaluation of assets (Note 15)                   -          1,692,710
                                             ----------    ------------
Total expenses                                 575,923       3,729,019
                                             ----------    ------------
LOSS BEFORE INCOME TAXES, 
DISCONTINUED OPERATIONS AND 
EXTRAORDINARY GAIN                            (546,776)     (3,607,302)

INCOME TAX PROVISION (BENEFIT) 
(NOTE 13)                                      129,100        (100,200)
                                             ----------    -------------
LOSS BEFORE DISCONTINUED 
OPERATIONS AND EXTRAORDINARY GAIN             (675,876)     (3,507,102)

GAIN (LOSS) FROM OPERATIONS TO 
BE DISCONTINUED (NOTE 16)
(Loss) income from operations of 
subsidiary to be sold, net of an 
income tax benefit of $231,000 
in 1997 and an income tax 
provision of $100,200 in 1996 (Note 16)       (407,244)        163,653
Loss on disposal of subsidiary, 
net of income tax benefit of 
$85,500 (Note 18)                             (139,432)           -      
                                            ------------    ------------
LOSS BEFORE EXTRAORDINARY GAIN              (1,222,552)     (3,343,449)

EXTRAORDINARY GAIN FROM 
TERMINATION OF OBLIGATIONS, 
NET OF INCOME TAXES OF $187,500 
(NOTE 18)                                      305,886            -
                                            ------------    -------------
NET LOSS                                    $ (916,666)     $(3,343,449)

The accompanying Notes to Financial Statements are an integral part of 
these financial statements.

UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

                                                                        
                                                 1997	          1996
                                                -------        -------
BASIC NET LOSS PER COMMON SHARE
Weighted average common shares outstanding     2,119,077       2,047,618
                                              -----------     -----------
Loss from continuing operations               $    (.32)      $   (1.71)
(Loss) income from discontinued operations         (.26)            .08
                                              -----------     -----------
Loss before extraordinary gain                     (.58)          (1.63)
Extraordinary gain                                  .15               -
                                              -----------     -----------
Net loss                                      $    (.43)      $   (1.63)

The accompanying Notes to Financial Statements are an integral part of 
these financial statements.

<TABLE>
UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
(DEFICIENCY) FOR THE YEARS ENDED 
DECEMBER 31, 1997 AND 1996
<CAPTION>

                                             Preferred Stock  
                        Redeemable               Series A         Series C        
                   Shares      Amount      Shares    Amount    Shares   Amount  
                  --------------------    ----------------    ----------------  
<S>               <C>         <C>         <C>       <C>       <C>      <C>     
BALANCE,
JANUARY 1, 1996         70    $    1          -     $   -          -   $   -     

ISSUE OF COMMON 
STOCK AS COMPENSATION 
(NOTE 10)                -         -          -         -          -        -       

CONVERSION OF DEBT TO
PREFERRED STOCK 
(NOTE 8)                 -          -           -        -       428,185    4,282      

CONVERSION OF DEBT TO 
COMMON STOCK 
(NOTE 9)                 -          -           -         -          -        -    

NET LOSS FOR 1996        -          -           -         -          -        -         
                      --------   ---------    --------  -------   --------  ------- 
BALANCE, 
DECEMBER 31, 1996        70           1          -         -      428,185    4,282  

AMORITZATION OF 
DEFERRED COMPENSATION 
(NOTE 10)                -           -           -         -         -        -     

NET LOSS FOR 1997        -           -           -         -         -        -        
                      --------  ---------     -------  -------   --------  -------- 
BALANCE, 
DECEMBER 31, 1997        70     $     1          -     $   -      428,185  $ 4,282  

</TABLE>

<TABLE>
UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
CONTINUED
<CAPTION>        

                                                ADDITIONAL
                            COMMON STOCK          PAID-IN      DEFERRED    ACCUMULATED
                        SHARES        AMOUNT      CAPITAL    COMPENSATION    DEFICIT      TOTAL
                        --------------------     ---------   ------------  -------------  -----
<S>                     <C>         <C>         <C>          <C>           <C>            <C>      
BALANCE, 
JANUARY 1, 1996         1,970,774   $  19,708   5,033,158    $      -       $(3,965,889)  $ 1,086,978

ISSUE OF COMMON STOCK
AS COMPENSATION 
(NOTE 10)                  65,500         675      28,857      (18,230)           -           11,302

CONVERSION OF DEBT TO
PREFERRED STOCK 
(NOTE 8)                      -            -     1,708,457          -              -        1,712,739

CONVERSION OF DEBT TO 
COMMON STOCK (NOTE 9)      80,803          808      30,536          -              -           31,344

NET LOSS FOR 1996             -             -         -             -        (3,343,449)   (3,343,449)
                        ----------    ----------  ---------    ----------    -----------   -----------
BALANCE,
DECEMBER 31, 1996        2,119,077       21,191    6,801,008     (18,320)    (7,309,338)     (501,086)

AMORTIZATION OF 
DEFERRED COMPENSATION
(NOTE 10)                     -              -          -         13,673           -           13,673

NET LOSS FOR 1997             -              -          -            -         (916,666)     (916,666)
                         ----------    ---------  ----------    ---------    -----------   -----------
BALANCE,
DECEMBER 31, 1997        2,119,077     $  21,191  $6,801,008    $  (4,557)   $(8,226,004)  $(1,404,079)

</TABLE>

The accompanying Notes to Financial Statements are an integral part of 
these financial statements.


                                                     1997	         1996	
                                                   -------        -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                         $ (916,666)   $ (3,343,449)
Adjustments to reconcile net 
loss to net cash provided by 
operating activities
Depreciation and amortization                       414,115         414,454
Provision for bad debts                            (295,000)        (17,606)
Loss on disposal of subsidiary                      224,932       	-  
Write-off of assets from closure 
of offices                                             -          1,944,310
Amortization of deferred 
compensation                                         13,673          11,302
Changes in assets and liabilities
Inventory                                            20,812         114,490
Accounts and notes receivable                       360,771         901,034
Other receivables                                    (2,877)       	-      
Prepaid expenses                                     13,496         148,567
Deposits and other assets                            57,528           3,162
Accounts payable                                     28,594          19,836
Accrued liabilities                                  57,341         280,831
Deferred revenue                                     (4,279)         13,867
Deferred rent                                        91,594         229,280
Other                                                  -            (91,933)
                                                  ----------     -----------
Net cash provided by operating activities            64,034         628,145
                                                  ----------     ----------- 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                (164,597)       (232,795)
Proceeds from landlord as reimbursement 
for leasehold improvements                           45,982             -   
                                                  ----------     -----------   
Net cash used by investing activities              (118,615)       (232,795)
                                                  ----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable                         236,000          93,599
Payment of notes payable                           (285,530)       (555,799)
                                                  ----------     -----------
Net cash used by financing activities               (49,530)       (462,200)
                                                  ----------     -----------
DECREASE IN CASH AND CASH EQUIVALENTS              (104,111)        (66,850)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR        233,971         300,821
                                                  ----------     -----------
CASH AND CASH EQUIVALENTS, END OF YEAR            $ 129,860      $  233,971

The accompanying Notes to Financial Statements are an integral part of 
these financial statements.

UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

                                                     1997           1996	
                                                   --------       --------
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid for interest                            $   89,738     $  338,357
                                                  ==========     ==========
SUPPLEMENTAL DISCLOSURE OF NONCASH 
FINANCING ACTIVITIES
Exchange of common and preferred stock for debt 
and other liabilities at fair value on 
date of exchange                                                $ 1,744,083
                                                                ===========
Common stock issued (67,500 shares) for 
compensation at an estimated fair value at 
the date of issue of                                            $    29,532
                                                                ===========

The accompanying Notes to Financial Statements are an integral part of 
these financial statements.

UNICO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT 
ACCOUNTING POLICIES

(A)	Nature of operations

UNICO, Inc. (the "Company") was incorporated on April 11, 1984 in the 
State of Delaware.  The Company's primary business, cooperative direct 
mail advertising, involves the designing, printing, packaging, and 
distributing of public relations and marketing materials and coupons for 
retailers who provide goods and services.  Sales are conducted primarily 
through franchise operations.  The Company's customers are primarily 
located in the eastern, southeastern, midwestern and western United 
States.  During 1997, the Company decided to dispose of its only 
remaining operating subsidiary, United Marketing Solutions, Inc.(formerly 
United Coupon Corporation).  The activities of this subsidiary are 
presented as discontinued operations in the Statement of Operations and 
detailed in Note 16).

(B)	Basis of consolidation

The consolidated financial statements include the accounts of the 
Company and its wholly-owned subsidiaries, United Marketing Solutions, 
Inc., Cal-Central Marketing Corporation (a dormant corporation whose 
charter was terminated in 1997) and Greenleaf Catalogue, Inc. (a 
dormant corporation).  All material intercompany accounts and 
transactions have been eliminated in consolidation.

(C)	Use of accounting estimates

The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates 
and assumptions that affect the reported amounts of assets and liabilities 
and disclosure of contingent assets and liabilities at the date of the 
financial statements and the reported amounts of revenues and expenses 
during the reporting period.  Actual results could differ from those 
estimates.

(D)	Property and equipment

Property is recorded at cost and is depreciated over the estimated useful 
lives of the individual assets, which are ten to fourteen years using the 
straight-line method.  Leasehold improvements are amortized over their 
estimated useful life or the term of the lease, whichever is shorter.

(E)	Revenue recognition

The Company recognizes revenue from the design, production and 
printing of coupons on a percentage of completion basis as stages of the 
production process are completed.  Revenue from initial franchise fees 
are recognized when substantially all services or conditions relating to 
the sale have been substantially performed.  Franchise support and other 
fees are recognized when billed to the franchisee.  Franchise fees of 
United Marketing Solutions, Inc. (UMS) recognized as revenue in 1997 
includes $89,165 of initial franchise fees.  Franchise fee revenue has 
been reduced in 1997 by $106,800 in credits granted to franchisees who 
have returned portions of franchise territories.  Amounts billed or 
collected in advance of final delivery or shipment are reported as deferred 
revenue in the Balance Sheet.

(F)	Inventory

Inventory consists primarily of paper, envelopes and printing materials 
and is stated at the lower of cost or market, with cost determined on the 
first-in, first-out method.

(G)	Basic net loss per common share

In 1997, the Company adopted Statement of Financial Accounting 
Standard No. 128, Earnings Per Share.  The adoption of this Standard 
had no effect on current period or previously reported net loss per share.  
The basic net loss per common share is computed by dividing the net 
loss by the weighted average number of common shares outstanding 
during the period.  Because the Company has incurred losses, fully 
diluted per share amounts are not presented. The weighted average 
shares outstanding reflect the 1 for 4 reverse split in 1997.

(H)	Cash and cash equivalents

The statements of cash flows are prepared on the basis of cash on hand 
and in banks which are subject to withdrawal on demand.  The Company 
considers all investments that have an original maturity of three months or 
less to be cash equivalents.

The Company maintains cash balances which may exceed Federally 
insured limits.  The Company does not believe that this results in any 
significant credit risk.

(I)	Income taxes

The Company files a consolidated federal income tax return.  Deferred 
income taxes are provided for temporary differences between the 
financial reporting and tax bases of the Company's assets and liabilities 
and for all loss and tax credit carryforwards, less valuation allowances as 
applicable.

(J)	Fair value of financial instruments

The fair value of the financial instruments included in the consolidated 
financial statements, except as otherwise discussed in the notes to 
financial statements, approximates their carrying value.

(K)	Impairment of long-lived assets

It is the Company's policy to periodically evaluate the economic 
recoverability of all of its long-lived assets.  In accordance with that 
policy, when the Company determines that an asset has been impaired, it 
recognizes the loss on the basis of the discounted future cash flows 
expected from the asset.

(L)	Accounting pronouncements

In October 1995, the Financial Accounting Standards Board (FASB) 
issued Statement of Financial Accounting No. 123, Accounting for Stock 
Based Compensation (SFAS No. 123).  That Standard recommends the 
use of a fair market valuation method for recognizing compensation from 
stock options and similar equity instruments.  However, SFAS No. 123 
permits the continued measurement of compensation using the intrinsic 
value based method as prescribed by Accounting Principle Board Opinion 
No. 25, Accounting for Stock Issued to Employees (APB No. 25), 
provided that financial statements disclose the effect of applying SFAS 
No. 123 had it been adopted.  This pronouncement was effective for 
transactions entered into in fiscal years that began after December 15, 
1995.  In that regard, the Company has elected to continue to measure 
stock based compensation on the basis of APB No. 25.  Had the 
Company adopted SFAS No. 123, the effect on the loss reported for 1997 
and 1996 would have been insignificant.

In June 1997, the FASB issued SFAS No. 130 Reporting Comprehensive 
Income.  This standard requires the reporting of the components of 
comprehensive income, which includes net income, and is effective for 
years beginning after December 15, 1997.  The Company believes that 
had the standard been adopted for the year ended December 31, 1997, 
that the presentation would not differ significantly from the presentation 
contained in its Statement of Operations.

(M)	Reclassifications

Certain amounts in the 1996 financial statements as reported herein have 
been reclassified to conform with the 1997 presentation.  These 
reclassifications relate primarily to reporting discontinued operations 
(Note 16).  These reclassifications had no effect on the net loss, total 
current assets or total current liabilities as previously reported.


NOTE 2 - NOTES PAYABLE

Notes payable at December 31, 1997 consisted of the following:

BancFirst - consolidated renewal promissory note 
dated August 15, 1996 in the face amount of 
$721,425 with interest at the prime rate plus 
1%. The note is collateralized by substantially 
all assets of the Company. The note is payable 
in monthly installments of $22,500 through 
January 15, 1997, and $27,500 through 
December 15, 1998, including interest, with 
the entire unpaid balance due on December 31, 
1998. As a result of ongoing negotiations, 
during 1997 the bank accepted payments 
at less than the stated terms in the note.  
At December 31, 1997, the Company is in default 
for nonpayment in accordance with the terms of 
the loan.                                              $  530,940

Duncan-Smith Company - eighteen notes due in 
October 1998 bearing interest at 12%.  This 
note has been subordinated as to payment to the 
BancFirst note.  This note is classified as a 
current liability at December 31, 1997 because 
of the current status of the BancFirst note.           $  460,000

Humphrey Group - four notes for $25,000, one 
note for $50,000 and one note for $150,000 that 
bear interest at 12%, and due in quarterly 
installments of principal commencing March 31, 
1997 of $25,000, with a final payment of 
$225,000 on December 31, 1997.  This note has 
been subordinated as to payment to the 
BancFirst note.  This note has been classified 
as current at December 31, 1997 as a result of 
the current status of the BancFirst note.              $  300,000

CIT Group - two installment notes bearing 
interest at approximately 10% and requiring 
monthly payments, in aggregate, of $8,989 
including interest.  Final payments on the 
notes are scheduled for 1999 and 2000.  The 
proceeds of these loans were used to purchase 
specific equipment and are collateralized by 
the equipment.                                         $  220,134

Renaissance Capital Partners, Ltd. - four 
notes dated from August 13, 1996 to March 
24, 1997 requiring interest at 9.25% to 10% 
payable monthly, with principal due at dates 
from December 31, 1998 to March 1999.  The notes 
are subordinate in payment to the BancFirst note 
described above.  Renaissance Capital Partners, 
Inc. are the holders of all of the Company's 
Series C Preferred Stock, and a principal of 
Renaissance is also a common stockholder.              $  274,000

Unsecured loan from a member of the Board of 
Directors with no specific terms.  Interest 
is being accrued by the Company at 10%.                $   12,000

Note payable to a bank bearing interest at 8.75%, 
due in monthly installments of principal and 
interest of $589, with final payment due in 
1999.  The note is collateralized by an automobile.    $   12,932
                                                       ----------
                               Total notes payable      1,810,006
                            Less:  Current portion      1,449,384
                                                       ----------
                                 Long-term portion     $  360,622
                                                       ==========

Future maturities of notes payable at December 31, 1997, based upon 
their terms, are as follows:

Year Ending
December 31	                                           Amount	
-----------                                          ----------
1998                                                $  1,449,384
1999                                                     323,300
2000                                                      37,322
                                                    ------------
                                         Total      $  1,810,006


NOTE 3 - ACCRUED LIABILITIES

Accrued liabilities at December 31, 1997 were as follows:

Interest                        $  245,540
Sales tax                           96,418
Payroll                             88,760
Franchise buyback credits           30,125
Other                               24,590
                                ----------
Total                           $  485,433

NOTE 4 - LEASES

The Company leases its main office and printing facility under an 
agreement last amended by restatement in September 1994.  The lease 
has a term of 10 years and requires payment of base rent which includes 
scheduled rent increases plus increases in the annual operating costs 
and real estate taxes applicable to the property.  The lease provides for 
an eighteen month abatement of rent during the initial period for a portion 
of the space leased.  The Company has an option to renew the lease for 
a five year period at the end of the base term at the then current fair 
rental value of the property.  The minimum payments required under the 
lease, which takes into account the rent abatement and scheduled 
increases in base rent, are recognized as expense on a straight-line 
basis over the life of the lease, with a liability recognized in the balance 
sheet to the extent that expense to date exceeds the minimum lease 
payments to date.

Scheduled future minimum payments required under the lease are as 
follows:

Year Ending
December 31	                        Amount	
-----------                        --------
1998                              $  383,799
1999                                 415,088
2000                                 444,290
2001                                 474,534
2002                                 505,823
Thereafter                         1,298,452
                                  ----------
Total                             $3,521,986

Rent expense for the years ended December 31, 1997 and 1996 was 
$675,576 and $652,659, respectively.

UNICO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997

NOTE 5 - PROFIT SHARING PLAN

The Company has a defined contribution plan that is qualified under 
401(k) of the Internal Revenue Code.  Employees may elect to contribute 
up to 15% of their salary before income taxes subject to an annual limit 
provided for in the Code, which was $9,500 for 1996 and 1997.  The 
Company matches employee contributions up to 3% of gross wages.  All 
employees who are at least 18 years of age are eligible to participate in 
the plan.  Contributions to the plan by the Company were $22,662 and 
$27,578 in 1997 and 1996, respectively.


NOTE 6 - 1 FOR 4 REVERSE SPLIT OF COMMON STOCK

At its meeting on December 30, 1997, the stockholders approved a 
reverse split of all of the Company's outstanding common and preferred 
shares on a one-for-four basis.  All share amounts presented in the 
financial statements have been adjusted to reflect this reverse split.

NOTE 7 - REDEEMABLE PREFERRED STOCK

In the Company's 1993 acquisition of Cal-Central Marketing Corporation 
(CCMC), 150 shares of redeemable preferred stock were issued.  These 
shares were redeemable at $4,000 per share at the option of the holder 
after the attainment of certain profit performance tests by CCMC.  On 
April 20, 1995, holders exchanged 80 of these shares for 88,889 shares 
of common stock at an exchange rate of $3.60 per common share.  (All 
shares and exchange rate adjusted for the 1 for 4 reverse stock split in 
1997).  The profit performance tests of CCMC were never achieved, and 
in 1995 CCMC's operations were discontinued except for fulfillment of 
work in process.  This stock was pledged as collateral for loans totaling 
$280,000 by two former officers of CCMC (Note 14).

NOTE 8 - SERIES C PREFERRED STOCK

Prior to 1996, the Company had issued a 12.5% Convertible Debenture to 
Renaissance Capital Partners, Ltd. in the face amount of $1,250,000.  
During 1995, Renaissance and Duncan-Smith Investment Co. loaned the 
Company $298,500 under several notes that were to be convertible into 
common stock of the Company.  On July 12, 1996, the Company, 
Renaissance and Duncan-Smith entered into a loan conversion 
agreement whereby the debenture and notes plus accrued interest were 
exchanged for 428,185 shares of the Company's newly authorized Series 
C Preferred Stock.  Each share of the Series C Preferred Stock is 
convertible into one share of the Company's common stock at any time at 
the option of the holders, with conversion to occur automatically on 
August 1, 1998.  The agreement further provides that if and whenever 
any additional shares of common stock are issued by the Company for a 
net consideration of less than $1.00 per share then in each such case the 
conversion price shall be reduced to the net consideration received per 
share and the number of shares issuable to the holders of the Series C 
Preferred Stock shall be proportionality increased.  In addition, the 
agreement provides for adjustment of the conversion ratio in the event the 
number of shares of common stock outstanding is changed as the result 
of a subdivision or combination in manner of the common stock or the 
making of a stock dividend.  The shares and share amounts reported 
above have been adjusted for the 1 for 4 reverse stock split in 1997.

NOTE 9 - CONVERSION OF DEBT TO COMMON STOCK

Effective September 30, 1996, the holder of a debenture issued by the 
Company prior to 1996 agreed to exchange the debenture and all 
accrued interest for 80,803 shares of the Company's common stock (as 
adjusted for the 1 for 4 reverse stock split in 1997).  The Company 
recognized a gain on the conversion of $45,250 representing the 
difference in the fair value of the stock at the date of the exchange and 
the amount of the debt.  The gain is included in income in the 
Consolidated Statement of Operations as other revenue.

NOTE 10 - COMMON STOCK ISSUED FOR COMPENSATION

Pursuant to an action by the Board of Directors, during 1996 the 
Company issued 5,000 shares of its common stock (as adjusted for the 1 
for 4 reverse stock split in 1997) to its former Chief Financial Officer as 
compensation.  The estimated value of the stock at the date of issue was 
$2,188, which is recognized as a general and administrative expense in 
the Statement of Operations.

Effective April 1, 1996, the Board of Directors adopted a resolution to 
issue 62,500 shares of the Company's common stock (as adjusted for the 
1 for 4 reverse stock split in 1997) to the newly appointed President and 
Chief Executive Officer of the Company as compensation for his services 
during the initial two year term of his appointment.  Under the resolution, 
the shares shall be subject to forfeiture of a ratable amount of such 
shares in the event the officer does not serve the full two years of the 
initial term.  The Board further  resolved to issue 25,000 shares of the 
Company's common stock for each successive one year term which the 
officer is so appointed by the Board.  The 62,500 shares issued were 
estimated to have a fair value of $27,344 at the date of the award and are 
being recognized over the two year period.  As a result, $13,673 and 
$9,114 have been recognized as an expense in 1997 and 1996, 
respectively.  Deferred compensation in the amounts of $4,557 and 
$18,230 is reported in the Statements of Stockholders' Equity (Deficiency) 
as of December 31, 1997 and 1996, respectively.

NOTE 11 - STOCK PURCHASE WARRANTS

In connection with a financing arrangement entered into in October 1993 
and January 1994, the Company issued 57,500 common stock purchase 
warrants to the lenders, known as the D.S. Warrants, and 7,500 warrants 
to Duncan-Smith Co., the investment banker that arranged the private 
placement.  The warrants entitle the holder to purchase one share of 
common stock per warrant at prices which range from $3.60 to $5.60.  
The warrants expire in 1998.

In February 1994, the Company issued warrants to the owner of Duncan-
Smith Co. to purchase 6,250 shares of common stock at a price of $5 per 
share.  These warrants are exercisable over a five year period from the 
date granted.  These warrants were issued in connection with a financing 
arrangement.

In June 1995, in connection with a lending arrangement, the Company 
issued warrants to purchase 112,500 shares of common stock at $3.60 
per share.  These warrants expire, if not exercised earlier, on December 
31, 2000.

Certain of the above mentioned warrants contain anti-dilution provisions 
and require the Company to register the warrants under certain 
conditions.  The Company has reserved 182,500 shares of its unissued 
common stock for exercise of these warrants.  All of the above shares and 
per share amounts have been adjusted for the 1 for 4 reverse stock split 
in 1997.

NOTE 12 - STOCK OPTION PLAN

The Company has reserved 250,000 shares of its common stock for 
issuance to directors, key employees, franchisees, and others 
contractually related to the Company, pursuant to an Omnibus Equity 
Compensation Plan adopted by the Company in 1989.  The Plan provides 
for the granting of both incentive and non-qualified stock options.  The 
exercise price of the options is not less than the market value of the stock 
on the date of grant.  Options granted become exercisable at the date of 
grant or at such other time as the compensation committee may 
determine, and expire in a maximum of five years.  The following table 
reflects a summary of stock option activity (adjusted for the 1 for 4 reverse 
stock split n 1997) for 1997 and 1996.


                                                     1997	     1996	
                                                   --------    --------
Shares available for grant at beginning of year     105,691      82,918
Options granted during the year                        -           -      
Options forfeited or canceled                        62,776      22,773
                                                   --------    --------
Shares available for  grant at the end of the year  168,467     105,691
                                                   ========    ========
Shares under option at the end of the year at 
option prices of $1.00 to $4.64                      71,211     133,987
                                                   ========    ========
Options exercised since inception of the plan        10,322      10,322
                                                   ========    ========
NOTE 13 - INCOME TAXES

The Company accounts for income taxes in accordance with the 
provisions of Statement of Financial Accounting Standards No. 109, 
"Accounting for Income Taxes" ("SFAS 109"), which requires an asset 
and liability approach to accounting for income taxes.  Under SFAS 109, 
deferred tax assets or liabilities are computed on the difference between 
the financial statement and income tax basis of assets and liabilities 
("temporary differences") using the enacted marginal tax rate.  Deferred 
income tax expenses or benefits are based on the changes in the 
deferred tax asset or liability from period to period.

The Company has a deferred tax asset at December 31, 1997 of 
approximately $2,300,000 that is principally the result of income tax net 
operating loss carryforwards of approximately $6,000,000.  Because of 
the uncertainty that the Company will be able to utilize these losses, 
which expire in years 2010 through 2012, a valuation allowance for the 
full amount of the deferred tax asset has been provided at December 31, 
1997.  The income tax benefit reported for 1997 represents the effect of 
reducing the net loss from discontinued operations and the extraordinary 
gain by the applicable tax effects and to which no valuation allowance is 
applied.

NOTE 14 - LOANS TO OFFICERS

At the time the Company acquired its Cal-Central Marketing Corporation 
subsidiary in October 1993, the Company loaned two of the officers of 
CCMC $280,000 on notes that matured in October 1995.  The Company's 
70 shares of Redeemable Preferred Stock were pledged as collateral for 
these loans. During 1996, the Company determined that collectibility of 
these loans was doubtful and provided an allowance for the full amount of 
the loans.  This loss has been charged to general and administrative 
expense in the 1996 Consolidated Statement of Operations.  During 
1997, the Company wrote-off the loans against the allowance.

NOTE 15 - FOURTH QUARTER ADJUSTMENTS

During the first and second quarters of 1996, the Company continued the 
corporate restructuring plan it initiated in 1995 by closing its headquarters 
office in Oklahoma City, Oklahoma, and transferring these activities to its 
expanded and modernized Springfield, Virginia facility.  These actions, 
designed to realize long-term benefits for the Company, resulted in a one-
time charge of $224,257 in costs in 1996.  In furtherance of the 
restructuring plan, management determined that it was in the best 
interests of the stockholders and the Company to discontinue the minimal 
remaining operations of its Cal-Central subsidiary.  As a result, the 
Company determined that previously capitalized and unamortized 
goodwill associated with the acquisition of Cal-Central should be written-
off concurrent with the elimination of that business segment.  That 
adjustment, in the amount of $1,468,453, was also recorded in the fourth 
quarter of 1996.

NOTE 16 - DISCONTINUED OPERATIONS OF SUBSIDIARY

During 1997, the Company decided to dispose of its principal operating 
subsidiary United Marketing Solutions, Inc. (formerly United Coupon 
Corporation), by sale if a suitable purchaser could be obtained.  
Accordingly, the results of operations for 1997 and 1996 have been 
presented showing the results of continuing operations and discontinued 
operations net of applicable income taxes (income tax benefits).  In 
addition, the Company has recorded a loss on disposition, in the amount 
of $139,432 net of income taxes, resulting from a write-off of the 
unamortized goodwill attributable its original acquisition of the subsidiary.  
A summary of the subsidiary's operations for 1997 and 1996 are as 
follows:


                                                   1997         1996	
                                                 --------     --------
REVENUE
Printing, design and advertising sales, net     $5,541,214   $6,391,769
Franchise fees                                     110,667      185,708
Other                                              127,559      126,681
                                                ----------   ----------
Total revenue                                    5,779,440    6,704,158

EXPENSES
Cost of sales                                   $3,851,427   $4,017,499
Franchise development                              356,944      360,719
General and administrative                       2,177,411    2,016,583
Interest                                            32,002       45,504
                                                ----------    ---------
Total expenses                                   6,417,784    6,440,305
                                                ----------    ---------
NET (LOSS) INCOME BEFORE INCOME TAX 
BENEFIT (PROVISION)                               (638,344)     263,853

INCOME TAX BENEFIT (PROVISION)                     231,100     (100,200)
                                                -----------  -----------
NET (LOSS) INCOME                               $ (407,244)  $  163,653

Summarized balance sheets of the subsidiary to be discontinued, 
exclusive of intercompany accounts, are as follows:

                                                   1997         1996	
                                                 -------      --------
ASSETS      
Cash and cash equivalents                      $  129,639    $  225,944
Accounts and notes receivable, net                294,880       357,774
Inventory                                         119,203       140,015
Prepaid expenses                                    9,140        22,636
                                               ----------    ----------
Total current assets                              552,862       746,369
Property and equipment, net                     2,068,556     2,356,581
Other assets                                        8,105        56,188
                                               ----------    ----------
Total assets                                  $ 2,629,523   $ 3,159,138
                                              ===========   ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued liabilities      $ 1,545,204  $  1,119,070
Current portion of long term liabilities           96,444       143,364
Deferred revenue                                  120,509       124,788
                                              -----------  ------------
Total current liabilities                       1,762,157     1,387,222
Long-term liabilities                             457,496       462,430
Stockholder's equity                              409,870     1,309,486
                                              -----------  ------------
Total liabilities and stockholders equity     $ 2,629,523  $  3,159,138

NOTE 17 - FINANCIAL CONDITION

The Company has a deficiency in stockholder's equity at December 31, 
1997 of approximately $1,404,000 and a deficit in working capital of 
approximately $2,810,000.  These conditions result from losses from 
operations in recent years.  The Company continues to work with its 
creditors to restructure its obligations and, as discussed in Note 16, plans 
to sell its principal operating subsidiary in the near future.  The Company 
believes that these actions will enable it to satisfy its obligations in the 
future.  However, the ability to continue operating during 1998 is 
dependent upon the forbearance of certain creditors of the Company and 
the availability of short-term credit on an as-needed basis.  While 
management believes it can work through these issues, there can be no 
assurance it will be successful, in which event, the Company may not be 
able to continue as a going concern.

NOTE 18 - EXTRAORDINARY GAIN

The extraordinary gain results from liabilities of the Company's Cal-
Central Marketing subsidiary that had its charter terminated during 1997, 
and which had the effect of discharging those obligations as they pertain 
to the Company.  The obligations discharged totaled $493,386 and are 
presented in the Consolidated Statement of Operations as an 
extraordinary gain net of applicable income taxes of $187,500.

NOTE 19 - LINE OF CREDIT

During 1997, the Company obtained a $100,000 line of credit from a bank 
that expires in September 1998.  Borrowings on the line bear interest at 
the prime rate.  The President of the Company has pledged as collateral 
a $75,000 certificate of deposit that is personally held, and he and his 
spouse have executed a personal guarantee for the remaining $25,000 
on the line.  There were no borrowings on the line during 1997.