----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**(Mark      One)**

**x**
**      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**For      the quarterly period ended **
**January      31, 2007**

**OR**

** ̈**
**      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**For      the transition period from __________________      to __________________**

**Commission      File Number **
**000-51132**

**Universal      Capital Management, Inc.**

**(Exact      name of registrant as specified in its charter)**

| **          Delaware        **(State                or other jurisdiction ofIncorporation                or Organization) |   | **20-1568059**(I.R.S.                EmployerIdentification                No.) |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|
|                                                                                                                                                                                                                |   |                                                                            |
| **2601                Annand Drive****Suite                16****Wilmington,                DE**(Address                of principal executive offices)                                                             |   | **19808**(Zip                Code)                                              |

**x**

**x**

**x**

----

----

----

**PART        I  **FINANCIAL        INFORMATION****

**Item          1. **Financial          Statements****

|                                                                                                    |   | January                31, 2007 |      | April                30, 2006 |   |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|-------------------------------|--------|
|                                                                                                    |   | (Unaudited)                     |      | (Audited)                     |   |
| ASSETS                                                                                                  |   |                            |      |                          |   |
| Investment                in Securities, at fair value (cost: $5,733,816 and                $2,539,600) |   | $                               | 6,049,265 |                          | $      | 3,331,620 |   |
| Cash                and Cash Equivalents                                                                |   |                            | 895       |                          |   | 84,272 |   |
| Notes                Receivable                                                                         |   |                            | 95,000    |                          |   | 60,000 |   |
| Due                from Portfolio Companies                                                             |   |                            | 63,805    |                          |   | 26,873 |   |
| Miscellaneous                Receivables                                                                |   |                            | 12,505    |                          |   | - |   |
| Due                from Affiliates                                                                      |   |                            | 36,239    |                          |   | 24,646 |   |
| Prepaid                Expenses                                                                         |   |                            | 5,262     |                          |   | 7,648 |   |
| Property                and Equipment, net                                                              |   |                            | 8,754     |                          |   | 10,178 |   |
| Rent                Deposit                                                                             |   |                            | 1,100     |                          |   | 1,100 |   |
| TOTAL                ASSETS                                                                             |   | $                               | 6,272,825 |                          | $      | 3,546,337 |   |
|                                                                                                    |   |                            |      |                          |   |   |   |
| LIABILITIES                                                                                             |   |                            |      |                          |   |   |   |
| Accounts                Payable and Accrued Expenses                                                    |   |                            | 689,232   |                          |   | 195,114 |   |
| Notes                Payable                                                                            |   |                            | 425,000   |                          |   | 100,000 |   |
| Due                to Officer                                                                           |   |                            | 50,000    |                          |   | - |   |
| Deferred                Revenue                                                                         |   |                            | 899,424   |                          |   | 939,433 |   |
| Income                Taxes                                                                             |   |                            | 209,800   |                          |   | - |   |
| Deferred                Income Taxes                                                                    |   |                            | 125,400   |                          |   | 68,000 |   |
| TOTAL                LIABILITIES                                                                        |   | $                               | 2,398,856 |                          | $      | 1,302,547 |   |
|                                                                                                    |   |                            |      |                          |   |   |   |
| NET                ASSETS                                                                               |   | $                               | 3,873,969 |                          | $      | 2,243,790 |   |
|                                                                                                    |   |                            |      |                          |   |   |   |
| ANALYSIS                OF NET ASSETS:                                                                  |   |                            |      |                          |   |   |   |
| Net                Capital Paid in on Shares of Capital Stock                                           |   |                            | 3,365,937 |                          |   | 2,140,640 |   |
| Distributable                Earnings                                                                   |   |                            | 508,032   |                          |   | 103,150 |   |
| Net                Assets                                                                               |   | $                               | 3,873,969 |                          | $      | 2,243,790 |   |
|                                                                                                    |   |                            |      |                          |   |   |   |
| Equivalent                per share value based on 5,438,274 shares                                     |   |                            |      |                          |   |   |   |
| of                capital stock outstanding as of January 31, 2007                                      |   |                            |      |                          |   |   |   |
| and                4,917,634 shares of capital stock outstanding                                        |   |                            |      |                          |   |   |   |
| as                of April 30, 2006                                                                     |   | $                               | 0.71      |                          | $      | 0.46 |   |

----

|                                                                                                                                                                 |   |     |                                                          | %                of |   | Number                of |   |                      |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|---------------------------------------------------------------|---------------------|--------|--------------------------|--------|---------------------------|------------|
| Common                Stocks & Other Investments United States - 100%                                                                                            |   | Business |                                                          | Portfolio           |   | Shares                   |   | Fair                Value |       |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |
| BF                Acquisition Group V, Inc.*                                                                                                                         |   |     | Inactive                company                               |                |   | 0.03                     | %      |                      | 100,000    | ** | $ | 1,625 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| AccelaPure                Corporation*                                                                                                                               |   |     | Bio-Pharma                and purification services           |                |   | 16.53                    | %      |                      | 1,000,000  | ** |   | 1,000,000 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                          |   |                      |       |   |   |  |   |
| Creative                Energy Solutions, Inc.*                                                                                                                      |   |     | Develops                alternative energy technologies       |                |   | 16.53                    | %      |                      | 2,000,000  | ** |   | 1,000,000 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Extreme                Visual Technologies, Inc.*                                                                                                                    |   |     | Develops                unique graphics imaging technologies  |                |   | 33.06                    | %      |                      | 2,000,000  | ** |   | 2,000,000 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| SIVOO,                Inc.* (formerly BroadRelay Holdings, Inc.)                                                                                                     |   |     | High                speed internet media                      |                |   | 13.54                    | %      |                      | 1,364,4010 | ** |   | 818,640 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Warrants                to purchase 200,000 shares of SIVOO, Inc.* at an exercise price of                $0.65                per share expiring December 15, 2010. |   |     | High                speed internet media                      |                |   | 1.70                     | %      |                      |       |   |   | 103,000 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Warrants                to purchase 200,000 shares of SIVOO, Inc.* at an exercise price of                $0.65                per share expiring November 11, 2011. |   |     | High                speed internet media                      |                |   | 1.77                     | %      |                      |       |   |   | 107,000 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Subtotal                affiliated companies                                                                                                                         |   |     |                                                          |                |   | 83.16                    | %      |                      |       |   |   | 5,030,265 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| IPI                Fundraising, Inc.                                                                                                                                 |   |     | Sales                and distribution of fundraising products |                |   | 0.00                     | %      |                      | 575,000    |   |   | - |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Gelstat                Corporation                                                                                                                                   |   |     | Consumer                health care                           |                |   | 0.31                     | %      |                      | 221,429    |   |   | 18,821 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Neptune                Industries, Inc.                                                                                                                              |   |     | Seafood                production                             |                |   | 0.10                     | %      |                      | 47,619     |   |   | 6,190 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Third                Order Nanotechnologies, Inc. (formerly PSI-TEC Holdings,                Inc.)                                                                   |   |     | Plastics                engineering                           |                |   | 8.91                     | %      |                      | 787,500    | *** |   | 539,000 |   |
|  Theatre                Xtreme Entertainment Group, Inc.                                                                                                        |   |     | Home                theater sales/installation                |                |   | 7.52                     | %      |                      | 575,936    |   |   | 454,989 |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
|                                                                                                                                                                 |   |     |                                                          |                |   |                     |   |                      |       |   |   |   |   |
| Total                (aggregate cost $5,733,816)                                                                                                                     |   |     |                                                          |                |   | 100.00                   | %      |                      |       |   | $ | 6,049,265 |   |

| * | Each                portfolio company in which the Company owns 5% or more of the outstanding                voting securities is deemed an affiliated                company. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ** | restricted |
|----|------------|

| *** | 200,000                of such shares are restricted |
|-----|------------------------------------------------------|

----

|                                                                                          |   | Three                months ended |     | Three                months ended |   | Nine                months ended |   | Nine                months ended |      |
|-----------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|-----------------------------------|--------|----------------------------------|--------|----------------------------------|-----------|
|                                                                                          |   | January                31, 2007   |     | January                31, 2006   |   | January                31, 2007  |   | January                31, 2006  |      |
| Income                                                                                        |   |                              |     |                              |   |                             |   |                             |      |
| Management                Services                                                            |   | $                                 | 897,055  |                              | $      | 329,517                          |   | $                                | 2,390,010 |   | $ | 572,817 |   |
| Interest                Income                                                                |   |                              | 1,916    |                              |   | -                                |   |                             | 20,251    |   |   | - |   |
|                                                                                          |   |                              | 898,971  |                              |   | 329,517                          |   |                             | 2,410,261 |   |   | 572,817 |   |
| Expenses                                                                                      |   |                              |     |                              |   |                             |   |                             |      |   |   |   |   |
| Bad                Debt                                                                       |   |                              | -        |                              |   | 19,350                           |   |                             | 543       |   |   | 19,350 |   |
| Depreciation                                                                                  |   |                              | 475      |                              |   | 475                              |   |                             | 1,424     |   |   | 1,425 |   |
| Dues                and Subscriptions                                                         |   |                              | -        |                              |   | -                                |   |                             | -         |   |   | 420 |   |
| Fees                and Commissions                                                           |   |                              | 3,639    |                              |   | 2,563                            |   |                             | 17,577    |   |   | 12,124 |   |
| Interest                Expense                                                               |   |                              | 9,045    |                              |   | 168                              |   |                             | 18,082    |   |   | 1,097 |   |
| Insurance                                                                                     |   |                              | 17,794   |                              |   | 15,673                           |   |                             | 55,306    |   |   | 47,763 |   |
| Licenses                and permits                                                           |   |                              | 75       |                              |   | 75                               |   |                             | 75        |   |   | 75 |   |
| Marketing                                                                                     |   |                              | 8,190    |                              |   | -                                |   |                             | 20,779    |   |   | 400 |   |
| Office                Expenses and Supplies                                                   |   |                              | 777      |                              |   | 5,344                            |   |                             | 2,388     |   |   | 6,983 |   |
| Payroll                                                                                       |   |                              | 152,271  |                              |   | 109,153                          |   |                             | 375,604   |   |   | 341,653 |   |
| Payroll                Taxes                                                                  |   |                              | 5,303    |                              |   | 4,485                            |   |                             | 20,516    |   |   | 17,411 |   |
| Postage,                Delivery and Shipping                                                 |   |                              | 1,236    |                              |   | 940                              |   |                             | 3,091     |   |   | 2,646 |   |
| Professional                Fees                                                              |   |                              | 152,271  |                              |   | 33,962                           |   |                             | 849,017   |   |   | 189,225 |   |
| Rent                                                                                          |   |                              | 4,200    |                              |   | 4,200                            |   |                             | 12,600    |   |   | 12,400 |   |
| Telephone                                                                                     |   |                              | 1,418    |                              |   | 610                              |   |                             | 3,582     |   |   | 2,484 |   |
| Travel                and Entertainment                                                       |   |                              | 1,977    |                              |   | 22,956                           |   |                             | 32,030    |   |   | 45,011 |   |
| Share                Based Compensation Expense                                               |   |                              | 2,334    |                              |   | -                                |   |                             | 185,612   |   |   | - |   |
| Taxes                - Franchise                                                              |   |                              | -        |                              |   | -                                |   |                             | 4,814     |   |   | - |   |
| Utilities                                                                                     |   |                              | 809      |                              |   | 1,952                            |   |                             | 2,493     |   |   | 3,349 |   |
|                                                                                          |   |                              | 326,876  |                              |   | 221,906                          |   |                             | 1,605,533 |   |   | 703,816 |   |
|                                                                                          |   |                              |     |                              |   |                             |   |                             |      |   |   |   |   |
| Income                (Loss) from Operations                                                  |   |                              | 572,095  |                              |   | 107,611                          |   |                             | 804,728   |   |   | (130,999 | ) |
|                                                                                          |   |                              |     |                              |   |                             |   |                             |      |   |   |   |   |
| Net                Realized Gain on Dividend of Portfolio Stock                               |   |                              | **-**    |                              |   | **-**                            |   |                             | 343,924   |   |   | - |   |
|                                                                                          |   |                              |     |                              |   |                             |   |                             |      |   |   |   |   |
| Unrealized                Appreciation (Depreciation) on Investments                          |   |                              | (872,414 | )                                 |   | (54,031                          | )      |                             | (476,570  | ) |   | (784,140 | ) |
|                                                                                          |   |                              |     |                              |   |                             |   |                             |      |   |   |   |   |
| Income                Tax Benefit (Provision)                                                 |   |                              | 119,300  |                              |   | (20,100                          | )      |                             | (267,200  | ) |   | 363,400 |   |
|                                                                                          |   |                              |     |                              |   |                             |   |                             |      |   |   |   |   |
| Net                Increase (Decrease) in Net Assets Resulting from                Operations |   | $                                 | (181,019 | )                                 | $      | 33,480                           |   | $                                | 404,882   |   | $ | (551,739 | ) |

----

| INCREASE                IN NET ASSETS FROM OPERATIONS                 |   |   |      |
|-----------------------------------------------------------------------|--------|--------|-----------|
| Income                from operations                                 |   | $      | 804,728   |   |
| Unrealized                (Depreciation) on investments, net of taxes |   |   | (743,770  | ) |
| Net                realized gain on Dividend of Portfolio Stock       |   |   | 343,924   |   |
|                                                                  |   |   |      |   |
| NET                INCREASE IN NET ASSETS RESULTING FROM OPERATIONS   |   |   | 404,882   |   |
|                                                                  |   |   |      |   |
| CAPITAL                SHARE TRANSACTIONS                             |   |   |      |   |
| Issuance                of Common Stock                               |   |   | 1,041,280 |   |
| Share-based                Compensation Expense                       |   |   | 185,612   |   |
| Stock                Options granted for Operating Expenses           |   |   | 447,000   |   |
| Dividend                of Portfolio Stock                            |   |   | (448,595  | ) |
|                                                                  |   |   |      |   |
| NET                CAPITAL SHARE TRANSACTIONS                         |   |   | 1,225,297 |   |
|                                                                  |   |   |      |   |
| TOTAL                INCREASE                                         |   |   | 1,630,179 |   |
|                                                                  |   |   |      |   |
| NET                ASSETS, BEGINNING OF YEAR                          |   |   | 2,243,790 |   |
|                                                                  |   |   |      |   |
| NET                ASSETS, END OF PERIOD                              |   | $      | 3,873,969 |   |

----

|                                                                                          |   | Nine                months ended January 31, 2007 |       | Nine                months ended January 31, 2006 |   |
|-----------------------------------------------------------------------------------------------|--------|---------------------------------------------------|------------|---------------------------------------------------|--------|
| CASH                FLOWS FROM OPERATING ACTIVITIES                                           |   |                                              |       |                                              |   |
| Net                increase (decrease) in net assets resulting from                operations |   | $                                                 | 404,882    |                                              | $      | (551,739 | ) |
| Write-off                of due from affiliate, deemed uncollectible                          |   |                                              | -          |                                              |   | 19,350 |   |
| Adjustments                to reconcile net decrease in net assets from                       |   |                                              |       |                                              |   |   |   |
| Operations                to net cash used in operating activities:                           |   |                                              |       |                                              |   |   |   |
| Gain                on Dividend of Portfolio stock                                            |   |                                              | (343,924   | )                                                 |   | - |   |
| Stock                received for interest                                                    |   |                                              | (13,888    | )                                                 |   | - |   |
| Investment                securities received in exchange for management services             |   |                                              | (2,340,007 | )                                                 |   | (572,817 | ) |
| Depreciation                expense                                                           |   |                                              | 1,424      |                                              |   | 1,425 |   |
| Share                based compensation expense                                               |   |                                              | 185,612    |                                              |   | - |   |
| Stock                Options granted for operating expenses                                   |   |                                              | 447,000    |                                              |   | - |   |
| Net                unrealized (appreciation) depreciation on investments                      |   |                                              | 476,570    |                                              |   | 784,140 |   |
| Income                Taxes                                                                   |   |                                              | 209,800    |                                              |   | - |   |
| Deferred                Income Taxes                                                          |   |                                              | 57,400     |                                              |   | (363,400 | ) |
| Net                changes in miscellaneous receivables                                       |   |                                              | (12,505    |                                              |   | 300 |   |
| Net                changes in due from portfolio companies                                    |   |                                              | (51,932    | )                                                 |   | - |   |
| Net                changes in due from affiliates                                             |   |                                              | (11,593    | )                                                 |   | (24,925 | ) |
| Prepaid                expenses                                                               |   |                                              | 2,386      |                                              |   | 4,084 |   |
| Net                changes in accounts payable and accrued expenses                           |   |                                              | 494,118    |                                              |   | 13,872 |   |
| Net                cash used in operating activities                                          |   |                                              | 494,657    |                                              |   | (689,710 | ) |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                           |   |                                              |       |                                              |   |   |   |
| Increase                in note to shareholder                                                |   |                                              | 50,000     |                                              |   | - |   |
| Increase                in notes receivable                                                   |   |                                              | (55,000    | )                                                 |   | - |   |
| Net                cash used by investing activities                                          |   |                                              | (5,000     | )                                                 |   | - |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                           |   |                                              |       |                                              |   |   |   |
| Proceeds                from issuance of debt                                                 |   |                                              | 425,000    |                                              |   | - |   |
| Repayment                of debt                                                              |   |                                              | (250,000   | )                                                 |   | - |   |
| Proceeds                from issuance of common stock                                         |   |                                              | 241,280    |                                              |   | 559,915 |   |
| Net                cash provided by financing activities                                      |   |                                              | 416,280    |                                              |   | 559,915 |   |
|                                                                                          |   |                                              |       |                                              |   |   |   |
| NET                INCREASE (DECREASE) IN CASH                                                |   |                                              | (83,377    | )                                                 |   | (129,795 | ) |
|                                                                                          |   |                                              |       |                                              |   |   |   |
| CASH                AND CASH EQUIVALENTS, BEGINNING OF YEAR                                   |   |                                              | 84,272     |                                              |   | 158,453 |   |
|                                                                                          |   |                                              |       |                                              |   |   |   |
| CASH                AND CASH EQUIVALENTS, END OF PERIOD                                       |   | $                                                 | 895        |                                              | $      | 28,658 |   |

**B**
**roadRelay**

----

**NOTE      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis      of Presentation**

**Nature      of Business**

**Security      Valuations**

**Use      of Estimates**

**Cash      and Equivalents**

----

**Note      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED**

**Property      and Equipment**

| Furniture                  and fixtures        | 5                  to 7 years |
|------------------------------------------------|-------------------------------|
| Computer                  and office equipment | 3                  to 7 years |

**Income      Taxes**

**Stock-Based      Compensation**

**Reclassifications**

----

**Note      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED**

**Recently      Issued Accounting Pronouncements**

----

**NOTE      2 - INVESTMENTS**

|                                                                |   | Number                  of      |      |   |   |                          |   |                           |      |
|---------------------------------------------------------------------|--------|---------------------------------|-----------|--------|--------|-------------------------------|--------|--------------------------------|-----------|
|                                                                |   | Shares                  held at |      |   |   | Value                  at     |   | Unrealized                     |      |
|                                                                |   | Jan                  31, 2007   |      | Cost   |   | Jan                  31, 2007 |   | Gain                  / (Loss) |      |
|                                                                |   |                            |      |   |   |                          |   |                           |      |
| Affiliated                  Securities*                             |   |                            |      |   |   |                          |   |                           |      |
| BF                  Acquisition Group V, Inc.                       |   |                            | 100,000   |   | $      | 1,625                         |   | $                              | 1,625     |   | $ | - |   |
| AccelaPure                  Corporation                             |   |                            | 1,000,000 |   |   | 1,000,000                     |   |                           | 1,000,000 |   |   | - |   |
| Creative                  Energy Solutions, Inc.                    |   |                            | 2,000,000 |   |   | 1,000,000                     |   |                           | 1,000,000 |   |   | - |   |
| Extreme                  Visual Technologies, Inc.                  |   |                            | 2,000,000 |   |   | 1,813,888                     |   |                           | 2,000,000 |   |   | 186,112 |   |
| SIVOO,                  Inc.**                                      |   |                            | 1,364,401 |   |   | 526,100                       |   |                           | 818,640   |   |   | 292,540 |   |
| Warrants                  to purchase 400,000 shares of SIVOO, Inc. |   |                            |      |   |   |                          |   |                           |      |   |   |   |   |
| warrants                  expiring December 15, 2010                |   |                            | 200,000   |   |   | -                             |   |                           | 103,000   |   |   | 103,000 |   |
| warrants                  expiring July15, 2011                     |   |                            | 200,000   |   |   | -                             |   |                           | 107,000   |   |   | 107,000 |   |
|                                                                |   |                            |      |   |   |                          |   |                           |      |   |   |   |   |
| Total                  Affiliated Securities                        |   |                            |      |   |   | 4,341,613                     |   |                           | 5,030,265 |   |   | 688,652 |   |
|                                                                |   |                            |      |   |   |                          |   |                           |      |   |   |   |   |
|                                                                |   |                            |      |   |   |                          |   |                           |      |   |   |   |   |
| Non-affiliated                  Securities                          |   |                            |      |   |   |                          |   |                           |      |   |   |   |   |
| IPI                  Fundraising, Inc.                              |   |                            | 575,000   |   |   | 6,625                         |   |                           | -         |   |   | (6,625 | ) |
| Gelstat                  Corporation                                |   |                            | 221,429   |   |   | 350,000                       |   |                           | 18,821    |   |   | (331,179 | ) |
| Neptune                  Industries, Inc.                           |   |                            | 47,619    |   |   | 20,000                        |   |                           | 6,190     |   |   | (13,810 | ) |
| Third                  Order Nanotechnologies, Inc.***              |   |                            | 787,500   |   |   | 619,000                       |   |                           | 539,000   |   |   | (80,000 | ) |
| Theater                  Xtreme Entertainment Group, Inc.           |   |                            | 575,936   |   |   | 396,578                       |   |                           | 454,989   |   |   | 58,411 |   |
|                                                                |   |                            |      |   |   |                          |   |                           |      |   |   |   |   |
| Total                  Non-Affiliated Securities                    |   |                            |      |   |   | 1,392,203                     |   |                           | 1,019,000 |   |   | (373,203 | ) |
|                                                                |   |                            |      |   |   |                          |   |                           |      |   |   |   |   |
| Total                  Securities                                   |   |                            |      |   | $      | 5,733,816                     |   | $                              | 6,049,265 |   | $ | 315,449 |   |

| * | Each                portfolio company in which the Company owns 5% or more of the outstanding                voting securities is                deemed an "affiliated company." |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ** | Formerly                known as BroadRelay Holdings, Inc. |
|----|------------------------------------------------------------|

| *** | Formerly                known as PSI-TEC Holdings, Inc. |
|-----|---------------------------------------------------------|

----

| UNIVERSAL                CAPITAL MANAGEMENT, INC. |
|---------------------------------------------------|
| NOTES                TO FINANCIAL STATEMENTS      |

| **NOTE                3 - INCOME                TAXES**   |
|---------------------------------------------------------------------|

| Income                taxes consist of the following:                                                                                                             |   |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|
|  Deferred:                                                                                                                                                   |   |   |     |   |
|  Federal                                                                                                                                                     |   | $      | 44,800   |   |
|  State                                                                                                                                                       |   |   | 12,600   |   |
|                                                                                                                                                              |   |   |     |   |
|  Total                Deferred                                                                                                                               |   | $      | 57,400   |   |
|                                                                                                                                                              |   |   |     |   |
|  Current                                                                                                                                                     |   |   |          |   |
|  Federal                                                                                                                                                     |   | $      | 163,800  |   |
|  State                                                                                                                                                       |   |   | 46,000   |   |
|                                                                                                                                                              |   |   |     |   |
|  Total                Current                                                                                                                                |   | $      | 209,800  |   |
|                                                                                                                                                              |   |   |     |   |
|                                                                                                                                                              |   |   |     |   |
|  Total                Income Taxes                                                                                                                           |   | $      | 267,200  |   |
|                                                                                                                                                              |   |   |     |   |
|                                                                                                                                                              |   |   |     |   |
| The                effective tax rate differs from the U.S. statutory federal income                tax rate                of 34% as described below:            |
|                                                                                                                                                              |   |   |     |   |
|                                                                                                                                                              |   |   |     |   |
|  Income                tax at statutory rate                                                                                                                 |   | $      | 228,500  |   |
|  State                income taxes, net of federal taxes                                                                                                     |   |   | 38,700   |   |
|                                                                                                                                                              |   |   |     |   |
|                                                                                                                                                              |   | $      | 267,200  |   |
|                                                                                                                                                              |   |   |     |   |
| Deferred                income taxes reflect the net effect of unrealized gains on investments                and                current income taxes reflect the |
| net                effect of operating income. There are no other significant temporary                differences between the carrying amount of                 |
| Assets                and liabilities for financial reporting purposes and the amount used                for                income tax purposes                  |
|                                                                                                                                                              |   |   |     |   |
| The                components of the deferred liabilities are as follows:                                                                                         |   |   |     |   |
|                                                                                                                                                              |   |   |     |   |
|  Unrealized                gains                                                                                                                             |   | $      | (125,400 | )      |
|                                                                                                                                                              |   |   |     |   |
|  Total                                                                                                                                                       |   | $      | (125,400 | )      |

----

| UNIVERSAL                CAPITAL MANAGEMENT, INC. |
|---------------------------------------------------|
| NOTES                TO FINANCIAL STATEMENTS      |
| **NOTE                4 - DUE FROM AFFILIATES**   |   |   |   |   |   |   |   |
|                                              |
|                                              | Due                from affiliates consist of the following: |   |   |   |   |   |   |

|  Due                from BF Acquisition Group V, Inc |   | $      | 36,239 |   |
|-----------------------------------------------------------|--------|--------|--------|--------|
|                                                      |   |   |   |   |
|  Total                                               |   | $      | 36,239 |   |

**NOTE        5 - ACCRUED EXPENSES**

**NOTE        6 - NOTES PAYABLE**

**NOTE        7 - EMPLOYEE STOCK OPTIONS**

----

**NOTE      8 - CAPITAL SHARE TRANSACTIONS**

| **NOTE                9 - FINANCIAL HIGHLIGHTS** |
|--------------------------------------------------|

| Per                Share Operating Performance                           |   |   |   |   |
|--------------------------------------------------------------------------|--------|--------|--------|--------|
|  Net                asset value, beginning of period                |   | $      | 0.46   |   |
|                                                                     |   |   |   |   |
|  Income                from operations, net of tax benefit          |   |   | 0.08   |   |
|  Unrealized                depreciation on investment, net of taxes |   |   | (0.05  | )      |
|  Realized                gain on dividend of Portfolio stock        |   |   | 0.03   |   |
|                                                                     |   |   | 0.06   |   |
|                                                                     |   |   |   |   |
|  Add                capital share transactions                      |   |   | 0.19   |   |
|                                                                     |   |   |   |   |
|  Net                asset value, end of period                      |   | $      | 0.71   |   |
|                                                                     |   |   |   |   |
|                                                                     |   |   |   |   |
|                                                                     |   |   |   |   |
|  Total                Return                                        |   |   | 26.3   | %      |
|                                                                     |   |   |   |   |
|  Average                Net Assets as a percentage of :             |   |   |   |   |
|  Expenses                (annualized)                               |   |   | 70.1   | %      |
|  Management                income (annualized)                      |   |   | 104.3  | %      |

----

**Item      2. **

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

**Business      Overview**

----

**Financial      Condition**

|   | · | The                increase of 400,000 shares in the Company’s investment in SIVOO,                Inc. |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   | · | The                increase of 936 shares in the Company’s investment in Theater Xtreme                Entertainment Group, Inc. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company’s investment in 2,000,000 shares of Creative Energy Solutions                Inc. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company’s investment in 1,000,000 shares of Extreme Visual Technologies,                Inc. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | The                acquisition of 200,000 SIVOO, Inc. warrants to expire in                2011. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | The                decrease in unrealized appreciation on same share investments from                April                30, 2006 to January 31, 2007 of approximately $625,352 mainly due                to a                decrease in value of shares of Third-Order Nanotechnologies, Inc,,                Gelstat                Corporation, Neptune Industries, Inc. and Theater Xtreme Entertainment                Group, Inc, offset in part by an increase in the value of the shares                of                SIVOO, Inc. and the increase in the value of 200,000 SIVOO, Inc.                warrants                expiring in 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                increase in accounts payable and accrued expenses of approximately                $494,000 which is mainly due to an increase in deferred compensation                for                officers consisting of payroll and payroll taxes of approximately                $325,000. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An                increase in notes payable of                $325,000. |
|--------|--------|-------------------------------------------------------------------------|

|   | · | The                increase in due to Officer of                $50,000, |
|--------|--------|--------------------------------------------------------------------------|

|   | · | The                decrease in deferred revenue of approximately $40,000 which is due                mainly                to an increase in deferred revenue of $1,000,000 for Extreme Visual                Technologies, Inc. which the Company will earn over the twelve month                period beginning July 12, 2006 and an increase in deferred revenue                of                $1,000,000 for Creative Energy Solutions, Inc. which the company                earned                over the six month period beginning August 1, 2006 offset by a decrease                in                deferred revenue of approximately $2,040,000 ($1,000,000 for Creative                Energy Solutions, Inc., $558,900 for Extreme Visual Technologies,                Inc.,                $375,000 for Accelapure Corporation and $106,100 for Third-Order                Nanotechnologies, Inc.) which was earned during the                period. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The                increase in deferred taxes of                $267,200. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | The                sale of 120,640 of the Company’s common shares for proceeds of                $241,280. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | The                declaration of a dividend paid in the form of 299,064 shares of the                common                stock of Theater Xtreme Entertainment Group, Inc., a portfolio company,                for a total value of $448,595. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                net realized gain of $343,924 on the dividend of shares of common                stock of                Theater Xtreme Entertainment Group,                Inc. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Results      of Operations**

**Three      months ended January 31, 2007 compared to the three months ended January 31,      2006.**

**Nine      months ended January 31, 2007 compared to the nine months ended January 31,      2006.**

----

**Liquidity      and Capital Resources **

**Critical      Accounting Estimates**

----

**Item      3. **
**      Quantitative and Qualitative Disclosures about Market Risk**

**Item      4. **
**      Controls and Procedures**

----

**PART      II. Other Information**

**Item      6.**
**Exhibits.**

**The      following exhibits are included herein:**

| 31.1   | Certification                pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,                as                amended, executed by the Principal Executive Officer of the                Company.                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                            |
| 31.2   | Certification                pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,                as                amended, executed by the Principal Financial Officer of the                Company.                            |
|   |                                                                                                                                                                                                                                            |
| 32.1   | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002, executed by the Principal Executive                Officer of the Company. |
|   |                                                                                                                                                                                                                                            |
| 32.2   | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002, executed by the Principal Financial                Officer of the Company. |

----

**SIGNATURES**

|                                   |                                              |                                    |
|----------------------------------------|---------------------------------------------------|-----------------------------------------|
|                                   | Universal                Capital Management, Inc. |
|                              |                                         |                               |
| Date: March              19, 2007 | By:                                     | /s/              Michael D. Queen  |
|                                   | Michael              D. Queen, President          |

|                                   |                                              |                                     |
|----------------------------------------|---------------------------------------------------|------------------------------------------|
|                                   | Universal                Capital Management, Inc. |
|                              |                                         |                                |
| Date: March              19, 2007 | By:                                     | /s/              Joseph T. Drennan  |
|                                   | Joseph              T. Drennan, Treasurer         |

----