** **

| Class                                        | Shares                Outstanding at November 13, 2007                                    |
|----------------------------------------------|-------------------------------------------------------------------------------------------|
|                                              |                                                                                           |
| Common                Stock, $0.10 Par Value | 6,294,332                (excluding 659,900 shares held as treasury                stock) |

----

**PART      I - FINANCIAL INFORMATION**

**Item      1. Financial Statements**

|                                                                 |                                                                                                  |   |  September                            30,                                                           |       |   |                                     June 30,    |       |
|----------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|------------|--------|--------------------------------------------------------------------------------------------------------|------------|
|                                                                 |                                                                                                  |   |                                     2007     |       |   |  2007                                                                                             |       |
|                                                                 |                                                                                                  |   |  (UNAUDITED)                                                                                        |       |   |  (DERIVED                          FROM                                                           |       |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                AUDITED                                        |       |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |  STATEMENTS)                                                                                      |       |
| ASSETS                                                               |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |
| Current                            Assets                            |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |
|                                                                 | Cash                                                                                                  |   | $                                                                                                        | 81,320     |   |                                                                                                   | $          | 15,713 |   |
|                                                                 | Accounts                            receivable - net                                                  |   |                                                                                                     | 27,734,379 |   |                                                                                                   |       | 35,752,247 |   |
|                                                                 | Inventories                            - net                                                          |   |                                                                                                     | 26,165,679 |   |                                                                                                   |       | 30,364,720 |   |
|                                                                 | Prepaid                            expenses and other                                                 |   |                                                                                                     | 1,161,432  |   |                                                                                                   |       | 551,159 |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
|                                                                 |          Total                            current assets |   |                                                                                                     | 55,142,810 |   |                                                                                                   |       | 66,683,839 |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
| Property,                            plant and equipment – net |                                                                                                  |   | 1,297,587                                                                                                |       |   |                                                                                                   | 1,433,286  |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
| Goodwill                                                             |                                                                                                  |   |                                                                                                     | 25,416,087 |   |                                                                                                   |       | 25,416,087 |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
| Other                            assets                              |                                                                                                  |   | 2,503,276                                                                                                |       |   |                                                                                                   | 2,553,345  |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |   |
| Total                            assets                              |                                                                                                  | $      | 84,359,760                                                                                               |       |   | $                                                                                                      | 96,086,557 |   |
|                                                                 |                                                                                                  |   |                                                                                                     |       |   |                                                                                                   |       |   |

----

|                                                                                                                                                                              |   |  September                                    30, |       |   |  June                                    30,    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|------------|--------|------------------------------------------------------|--------|
|                                                                                                                                                                              |   |  2007                                             |       |   |  2007                                           |   |
|                                                                                                                                                                              |   |  (UNAUDITED)                                      |       |   |  (DERIVED                                  FROM |   |
|                                                                                                                                                                              |   |                                                   |       |   |  AUDITED                                        |   |
|                                                                                                                                                                              |   |                                                   |       |   |  STATEMENTS)                                    |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |
| LIABILITIES                                    & SHAREHOLDERS' EQUITY                                                                                                         |   |                                                   |       |   |                                                 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |
| Current                                    Liabilities                                                                                                                            |   |                                                   |       |   |                                                 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |
|                                                   Accounts payable and accrued expenses                     |   | $                                                      | 18,571,908 |   |                                                 | $      | 24,999,242 |   |
|                                                   Current maturities of long-term debt and                  |   |                                                   |       |   |                                                 |   |   |   |
|                                                     capitalized lease obligations                 |   |                                                   | 32,642,373 |   |                                                 |   | 37,772,069 |   |
|                                                   Income taxes payable                                      |   | -                                                      |       |   |                                                 | 15,657 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                   Total current liabilities                                 |   |                                                   | 51,214,281 |   |                                                 |   | 62,786,968 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
| Long-term                                    debt and capitalized lease obligations                                                                                               |   |                                                   | 20,361     |   |                                                 |   | 34,966 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
| Deferred                                    compensation                                                                                                                          |   |                                                   | 1,162,502  |   |                                                 |   | 1,150,000 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
| Commitments                                    and Contingencies                                                                                                                  |   |                                                   |       |   |                                                 |   |   |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
| SHAREHOLDERS'                                    EQUITY                                                                                                                           |   |                                                   |       |   |                                                 |   |   |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                  Preferred stock - authorized, 100,000 shares,                   |   |                                                   |       |   |                                                 |   |   |   |
|                                                  $10 par value; none issued                                      |   |                                                   | -          |   |                                                 |   | - |   |
|                                                  Common stock – authorized, 20,000,000 shares,             |   |                                                   |       |   |                                                 |   |   |   |
|                                                      $.10 par value; 6,954,232 shares issued |   |                                                   |       |   |                                                 |   |   |   |
|                                                  and 6,294,332 shares outstanding                                |   |                                                   | 695,423    |   |                                                 |   | 695,423 |   |
|               Additional                                    paid-in capital                                 |   |                                                   | 27,143,294 |   |                                                 |   | 27,114,567 |    |
|                                                  Retained earnings                                               |   |                                                   | 6,438,465  |   |                                                 |   | 6,619,199 |   |
|               Treasury                                    stock – 659,900 shares at cost              |   |                                                   | (2,314,566 | )      |                                                 |   | (2,314,566 | ) |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                  Total shareholders' equity                                      |   |                                                   | 31,962,616 |   |                                                 |   | 32,114,623 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |
|                                                  Total liabilities and shareholders’ equity                |   | $                                                      | 84,359,760 |   |                                                 | $      | 96,086,557 |   |
|                                                                                                                                                                              |   |                                                   |       |   |                                                 |   |   |   |

----

|                                                                                  |                                                                     |   |       |       |   |   |       |
|---------------------------------------------------------------------------------------|--------------------------------------------------------------------------|--------|------------|------------|--------|--------|------------|
|                                                                                  |                                                                     |   | 2007       |       |   | 2006   |       |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| Net                                      sales                                        |                                                                     |   | $          | 49,010,330 |   |   | $          | 69,617,579 |   |
| Cost                                      of goods sold                               |                                                                     |   | 40,989,562 |       |   |   | 60,960,466 |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  | Gross                                      profit                        |   |       | 8,020,768  |   |   |       | 8,657,113 |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| Selling,                                      general and administrative expenses     |                                                                     |   | 7,572,528  |       |   |   | 7,534,992  |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  | Operating                                      profit                    |   |       | 448,240    |   |   |       | 1,122,121 |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| Interest                                      expense                                 |                                                                     |   | 615,361    |       |   |   | 846,045    |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  | (Loss)                                      earnings before income taxes |   |       | (167,121   | )      |   |       | 276,076 |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| Income                                      tax provision                             |                                                                     |   | 13,613     |       |   |   | 15,000     |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  | Net                                      (loss) earnings                 |   | $          | (180,734   | )      |   | $          | 261,076 |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| PER                                      SHARE INFORMATION                            |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| Basic                                      (loss) earnings per common share:          |                                                                     | $      | (0.03      | )          |   | $      | 0.04       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| Diluted                                      (loss) earnings per common share:        |                                                                     | $      | (0.03      | )          |   | $      | 0.04       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
| Weighted-average                                      common shares and common        |                                                                     |   |       |       |   |   |       |   |
|    equivalent                                      shares outstanding: |                                                                     |   |       |       |   |   |       |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  | Basic                                                                    |   |       | 6,294,332  |   |   |       | 6,294,332 |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  | Diluted                                                                  |   |       | 6,294,332  |   |   |       | 6,373,733 |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |
|                                                                                  |                                                                     |   |       |       |   |   |       |   |   |

----

| FORM                                          10-Q                                                                                                                                                |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   | September                                          30, 2007 |      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|-----------|--------|--------------------------------------------------------------------------------------------------|--------|---------|------------|--------|--------|------------|--------|--------|-------------------------------------------------------------|-----------|
| Page                                          5                                                                                                                                                   |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
| JACO                                          ELECTRONICS, INC. AND SUBSIDIARIES                                                                          |   |
| CONDENSED                                          CONSOLIDATED STATEMENT OF CHANGES                                                                           |   |
| IN                                          SHAREHOLDERS' EQUITY                                                                           |   |
| FOR                                          THE THREE MONTHS ENDED SEPTEMBER 30, 2007                                                                    |   |
| (UNAUDITED)                                                                                                                                |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    | Additional |   |   |       |   |   |                                                        |      |   | Total |   |
|                                                                                                                                                                                              |   | Common                                          stock |      |   | paid-in                                                                                          |   |    | Retained   |   |   | Treasury   |   |   | shareholders'                                               |      |
|                                                                                                                                                                                              |   | Shares                                                |      |   |                                                   Amount |   |    | capital    |   |   | earnings   |   |   | stock                                                       |      |   | equity |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
| Balance                                          at July 1, 2007                                                                                                                                  |   |                                                  | 6,954,232 |   |                                                                                             | $      | 695,423 |       |   | $      | 27,114,567 |   |   | $                                                           | 6,619,199 |   |   | $ | (2,314,566 | ) |   | $ | 32,114,623 |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
| Stock                                          based compensation                                                                                                                                 |   |                                                  | -         |   |                                                                                             |   | -       |       |   |   | 28,727     |   |   |                                                        | -         |   |   |   | - |   |   |   | 28,727 |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
| Net                                          loss                                                                                                                                                 |   |                                                  | -         |   |                                                                                             |   | -       |       |   |   | -          |   |   |                                                        | (180,734  | ) |   |   | - |   |   |   | (180,734 | ) |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
| Balance                                          at September 30, 2007                                                                                                                            |   |                                                  | 6,954,232 |   |                                                                                             | $      | 695,423 |       |   | $      | 27,143,294 |   |   | $                                                           | 6,438,465 |   |   | $ | (2,314,566 | ) |   | $ | 31,962,616 |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                              |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |                                                        |      |   |   |   |   |   |   |   |   |   |
| See                                          accompanying notes to condensed consolidated                                          financial                                          statements. |   |                                                  |      |   |                                                                                             |   |    |       |   |   |       |   |   |

----

| FORM                                        10-Q                                                                                                                                   |   |    September                                      30, 2007 |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|-------------|
| Page                                        6                                                                                                                                      |   |                                                                      |        |   |   |   |
| Jaco                                        Electronics, Inc. And Subsidiaries                                                                  |   |
| Condensed                                        Consolidated Statements of Cash Flows                                                               |   |
| For                                        The Three Months Ended September 30                                                                       |   |
| (UNAUDITED)                                                                                                                                |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |
|                                                                                                                                                                               |   | 2007                                                                      |        |   | 2006 |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
| Cash                                        flows from operating activities                                                                                                        |   |                                                                      |        |   |   |   |   |   |
|       Net                                        (loss) income                                                                                       |   | $                                                                         | (180,734    | ) |   | $ | 261,076 |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
| Adjustments                                        to reconcile net (loss) income to net                                                                                           |   |                                                                      |        |   |   |   |   |   |
|      cash                                        provided by (used in) operating activities                                                               |   |                                                                      |        |   |   |   |   |   |
|           Depreciation  and                                        amortization                                        |   |                                                                      | 178,455     |   |   |   | 184,545 |   |
|           Deferred                                        compensation                                                           |   |                                                                      | 12,502      |   |   |   | 12,502 |   |
|           Stock-based                                        Compenstion                                                         |   |                                                                      | 28,727      |   |   |   |   |   |
|           Provision                                        for doubtful accounts                                                 |   |                                                                      | 406,385     |   |   |   | (89,500 | ) |
|           Changes                                        in operating assets and liabilities                                     |   |                                                                      |        |   |   |   |   |   |
|           Decrease                                        (Increase) in operating assets - net                                   |   |                                                                      | 11,207,564  |   |   |   | (1,256,062 | ) |
|          (Decrease)  Increase                                        in operating liabilities – net                   |   |                                                                      | (6,442,991  | ) |   |   | 219,380 |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|           Net                                        cash provided by (used in) operating activities                             |   |                                                                      | 5,209,908   |   |   |   | (668,059 | ) |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
| Cash                                        flows from investing activities                                                                                                        |   |                                                                      |        |   |   |   |   |   |
|                                                  Capital expenditures                                                                 |   |                                                                      | -           |   |   |   | (22,792 | ) |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|           Net                                        cash used in investing activities                                           |   |                                                                      | -           |   |   |   | (22,792 | ) |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
| Cash                                        flows from financing activities                                                                                                        |   |                                                                      |        |   |   |   |   |   |
|           Borrowings                                        under line of credit                                                 |   |                                                                      | 50,930,056  |   |   |   | 69,126,219 |   |
|                                                 Repayments under line of credit                                                            |   |                                                                      | (56,061,822 | ) |   |   | (68,421,764 | ) |
|                                                 Principal payments under equipment financing                                               |   |                                                                      | (12,535     | ) |   |   | (10,759 | ) |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                 Net cash (used in) provided by financing                                        activities |   |                                                                      | (5,144,301  | ) |   |   | 693,696 |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                 Net Increase in cash                                                                       |   |                                                                      | 65,607      |   |   |   | 2,845 |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
| Cash                                        at beginning of period                                                                                                                 |   |                                                                      | 15,713      |   |   |   | 29,211 |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
| Cash                                        at end of period                                                                                                                       |   | $                                                                         | 81,320      |   |   | $ | 32,056 |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
|                                                                                                                                                                               |   |                                                                      |        |   |   |   |   |   |
| Supplemental                                        disclosures of cash flow information:                                                                                          |   |                                                                      |        |   |   |   |   |   |
|      Cash                                        paid during the year for:                                                                                |   |                                                                      |        |   |   |   |   |   |
|              Interest                                                                                             |   | $                                                                         | 615,000     |   |   | $ | 847,000 |   |
|              Income                                        taxes                                                  |   |                                                                      | 28,000      |   |   |   | 13,000 |   |

----

----

----

----

**Summary      of Stock Option Activity**

|                                                              |   |                                    |                                                     |                                        |                                          |   |                         |                                                                                     |   |   |   |
|-------------------------------------------------------------------|--------|-----------------------------------------|----------------------------------------------------------|---------------------------------------------|-----------------------------------------------|--------|------------------------------|------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                              |   |                                    | **Options    **** Outstanding** |                                        | **Weighted-****Average****Exercise****Price** |   |                         | **Weighted-****Average****Remaining****Contractual****Term                    (months)** |
|                                                              |   |                                    |                                                          |                                        |                                               |   |                         |                                                                                          |
|                                                              |   |                                    |                                                     |                                        |                                          |   |                         |                                                                                     |
|                                                              |   |                                         |                                                     |                                             |                                          |   |                              |                                                                                     |
| **Employee                    Stock Option Plans:**               |   |                                    |                                                     |                                        |                                          |   |                         |                                                                                     |   |   |
| Options                    outstanding at June 30, 2007      |   |                                    | 624,250                                                  |                                        |                                          | $4.74  |                         |                                                                                     |   |   |
| Granted                                                           |   |                                    | -                                                        |                                        |                                          | -      |                         |                                                                                     |   |   |
| Exercised                                                         |   |                                    | -                                                        |                                        |                                          | -      |                         |                                                                                     |   |   |
| Canceled                                                          |   |                                    | -                                                        |                                        |                                          | -      |                         |                                                                                     |   |   |
|                                                              |   |                                    |                                                     |                                        |                                          |   |                         |
| Options                    outstanding at September 30, 2007 |   |                                    | 624,250                                                  |                                        |                                          | $4.74  |                         |                                                                                     |   | 71     |
| Options                    exercisable at September 30, 2007      |   |                       434,750 |                                                     |                        $5.30 |                                          |   |                      54 |

|                                                                                                                          | 2007                                                                                                                  |   | 2006                                       |
|-------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|
|                                                                                                                          |                                                                                                                       |   |                                            |
| Weighted                average common shares outstanding net of treasury shares, for basic                earnings per share |                   6,294,332 |   |  6,267,832                            |
|                                                                                                                          |                                                                                                                  |   |                                       |
| Effect                of dilutive securities                                                                                  | -                                                                                                                     |   |       79,401 |
|                                                                                                                          |                                                                                                                  |   |                                       |
|                                                                                                                          |                                                                                                                       |   |                                            |
| Weighted                average common shares outstanding for diluted earnings per                share                       |                  6,294,332       |   |     6,373,733          |
|                                                                                                                          |                                                                                                                       |   |                                            |

----

*”,*

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations.**

**Critical      Accounting Policies and Estimates**

----

**New      Accounting Standards**

*”,*

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|                                                                                                                                            |   | Three                                                Months EndedSeptember                                                30,                                                |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                            |   |                                                                     2007 |   |   |                                                               2006 |
|                                                                                                                                            |   |                                                                                                                                                                         |   |   |   |   |
| Net                                                sales                                                                                        |   |                                                                                                                                                                         | 100.0  | % |   | 100.0 | % |
| Cost                                                of goods sold                                                                               |   |                                                                                                                                                                         | 83.6   |   |   | 87.6 |   |
|                                                                                                                                            |   |                                                                                                                                                                         |   |   |   |   |   |
| Gross                                                profit                                                                                     |   |                                                                                                                                                                         | 16.4   |   |   | 12.4 |   |
| Selling,                                                general and administrative                                                expenses |   |                                                                                                                                                                         | 15.5   |   |   | 10.8 |   |
|                                                                                                                                            |   |                                                                                                                                                                         |   |   |   |   |   |
| Operating                                                profit                                                                                 |   |                                                                                                                                                                         | .9     |   |   | 1.6 |   |
| Interest                                                expense                                                                                 |   |                                                                                                                                                                         | 1.3    |   |   | 1.2 |   |
|                                                                                                                                            |   |                                                                                                                                                                         |   |   |   |   |   |
| (Loss)                                                earnings before income taxes                                                              |   |                                                                                                                                                                         | (0.4   | ) |   | 0.4 |   |
| Income                                                tax provision (benefit)                                                                   |   |                                                                                                                                                                         | 0.0    |   |   | 0.0 |   |
|                                                                                                                                            |   |                                                                                                                                                                         |   |   |   |   |   |
| Net                                                (loss) earnings                                                                              |   |                                                                                                                                                                         | (0.4   | )% |   | 0.4 | % |
|                                                                                                                                            |   |                                                                                                                                                                         |   |   |   |   |   |

**COMPARISON      OF THE THREE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30,      2006**

----

----

----

|   | **Contractual                Obligations** |
|--------|--------------------------------------------|

|                           | **Total**         | **<                1 Year** | **1                to 3 Years** | **3                to 5 Years** | **>                5 Years** |
|--------------------------------|-------------------|--------------------------------|---------------------------------|---------------------------------|---------------------------------|
|                           |                   |                                |                                 |                                 |                                 |
|                           |              |                           |                            |                            |                            |
| Bank                Debt       | $32,586,777       | $32,586,777                    |                            |                            |                            |
| Capital                Lease   | 75,957            | 55,596                         | $20,361                         |                            |                            |
| Operating                Lease | 6,352,627         | 1,080,389                      | 3,032,840                       | $2,239,398                      | -                               |
|                           |                   |                                |                                 |                                 |                            |
|  Total                    |  $39,015,361 |  $33,722,762              |  $3,053,201                |  $2,239,398                |                            |
|                           |                   |                                |                                 |                                 |                            |

**Inflation      and Seasonality**

** **

|   | **Item                3. Quantitative and Qualitative Disclosures About Market                Risk.** |
|--------|-------------------------------------------------------------------------------------------------------|

**Item      4. Controls and Procedures.**

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**PART      II – OTHER INFORMATION**

**Item      1.              Legal      Proceedings**

**Item      1A.          Risk      Factors**

**              **

**Item      6.             Exhibits.**

Exhibit        10.27.7 - 

 Exhibit      31.1      -

Exhibit      31.2

Exhibit      32.1      -

Exhibit      32.2

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**S      I G N A T U R E**

**JACO      ELECTRONICS,      INC.**