----

----

**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 July 31, 2007**

**OR**

**o**
**      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) **2601                Annand Drive****Suite                16****Wilmington,                DE**(Address                of principal executive offices) | **20-1568059**(I.R.S.                EmployerIdentification                No.)  19808(Zip                Code) |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
|  Registrant’s                telephone number, including area code: **(302)                998-8824**                                                                                                                                                     |

----

----

----

**TABLE      OF CONTENTS**

**PART      I - FINANCIAL INFORMATION**

|                                           |   |                                                                                                                      |   | **Page** |
|------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------|--------|----------|
| Item                1                          |   | Financial                Statements                                                                                       |   | 1        |
|                                           |   |                                                                                                                      |   |     |
| Item                2                          |   | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations |   | 15       |
|                                           |   |                                                                                                                      |   |     |
| Item                3                          |   | Quantitative                and Qualitative Disclosures about Market Risk                                                 |   | 20       |
|                                           |   |                                                                                                                      |   |     |
| Item                4                          |   | Controls                and Procedures                                                                                    |   | 21       |
|                                           |   |                                                                                                                      |   |     |
| **PART                II - OTHER INFORMATION** |   |                                                                                                                      |
|                                           |   |                                                                                                                      |   |     |
| Item                6                          |   | Exhibits                                                                                                                  |   | 21       |

----

**PART        I - FINANCIAL INFORMATION**

**Item        1. Financial Statements**

|                                                                                      |   | July                31, 2007 |      | April                30, 2007 |   |
|-------------------------------------------------------------------------------------------|--------|------------------------------|-----------|-------------------------------|--------|
|                                                                                           |   | (Unaudited)                  |      | (Audited)                     |   |
| **ASSETS**                                                                                |   |                         |      |                          |   |
|                                                                                      |   |                         |      |                          |   |
| Investments                in securities, at fair value (cost: $5,331,025 and $5,278,815) |   | $                            | 4,867,630 |                          | $      | 6,011,882 |   |
| Cash                and cash equivalents                                                  |   |                         | 2,549     |                          |   | 110,739 |   |
| Notes                receivable                                                           |   |                         | 134,427   |                          |   | 107,272 |   |
| Due                from portfolio companies                                               |   |                         | 22,593    |                          |   | 17,895 |   |
| Miscellaneous                receivables                                                  |   |                         | 9,975     |                          |   | 14,774 |   |
| Due                from affiliates                                                        |   |                         | 45,019    |                          |   | 40,239 |   |
|                                                                                      |   |                         |      |                          |   |   |   |
| Prepaid                expenses                                                           |   |                         | 32,205    |                          |   | 41,166 |   |
| Property                and equipment, net                                                |   |                         | 7,804     |                          |   | 8,279 |   |
| Rent                deposit                                                               |   |                         | 1,100     |                          |   | 1,100 |   |
| Deferred                tax asset                                                         |   |                         | 272,000   |                          |   | - |   |
|                                                                                      |   |                         |      |                          |   |   |   |
| TOTAL                ASSETS                                                               |   | $                            | 5,395,302 |                          | $      | 6,353,346 |   |
|                                                                                      |   |                         |      |                          |   |   |   |
|                                                                                      |   |                         |      |                          |   |   |   |
| **LIABILITIES**                                                                           |   |                         |      |                          |   |   |   |
| LIABILITIES                                                                               |   |                         |      |                          |   |   |   |
| Accounts                payable                                                           |   | $                            | 277,834   |                          | $      | 314,432 |   |
| Accrued                expenses                                                           |   |                         | 120,812   |                          |   | 37,862 |   |
| Current                income taxes payable                                               |   |                         | 247,000   |                          |   | 316,000 |   |
| Advances                from shareholder                                                  |   |                         | 238,000   |                          |   | 150,000 |   |
| Notes                payable                                                              |   |                         | 425,000   |                          |   | 425,000 |   |
| Deferred                revenue                                                           |   |                         | 701,792   |                          |   | 680,588 |   |
| Accrued                interest                                                           |   |                         | 32,875    |                          |   | - |   |
| Deferred                income taxes                                                      |   |                         | -         |                          |   | 50,000 |   |
| Noncurrent                income taxes payable                                            |   |                         | 272,000   |                          |   | - |   |
| TOTAL                LIABILITIES                                                          |   |                         | 2,315,313 |                          |   | 1,973,882 |   |
|                                                                                      |   |                         |      |                          |   |   |   |
| NET                ASSETS                                                                 |   | $                            | 3,079,989 |                          | $      | 4,379,464 |   |
|                                                                                      |   |                         |      |                          |   |   |   |
| **ANALYSIS                OF NET ASSETS**                                                 |   |                         |      |                          |   |   |   |
| Net                capital paid in on shares of capital stock                             |   | $                            | 3,970,836 |                          | $      | 3,943,802 |   |
| Distributable                earnings                                                     |   |                         | (890,847  | )                             |   | 435,662 |   |
|                                                                                      |   |                         |      |                          |   |   |   |
| NET                ASSETS                                                                 |   | $                            | 3,079,989 |                          | $      | 4,379,464 |   |
|                                                                                      |   |                         |      |                          |   |   |   |
|                                                                                      |   |                         |      |                          |   |   |   |
| Equivalent                per share value based on 5,438,274 shares of capital stock      |   |                         |      |                          |   |   |   |
| outstanding                as of July 31, 2007 and 5,438,274 shares of                    |   |                         |      |                          |   |   |   |
| capital                stock oustanding as of April 30, 2007                              |   | $                            | 0.57      |                          | $      | 0.81 |   |

----

|                                                                                                                                                                                     |   |                                                |   | %                of |         | Number                of |   |                      |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|---------------------|--------------|--------------------------|--------|---------------------------|--------|
| Common                Stocks - United States - 100%                                                                                                                                      |   | Business                                            |   | Portfolio           |         | Shares                   |   | Fair                Value |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |
| Extreme                Visual Technologies, Inc.*                                                                                                                                        |   | Develops              unique graphics               |   |                |         |                     |   |                      |   |   |   |   |
|                                                                                                                                                                                          |   | imaging                technologies                 |   |                | 41.09        | %                        |   | 2,000,000                 |   | $ | 2,000,000 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Creative                Energy Solutions*                                                                                                                                                |   | Develops              alternative                   |   |                |         |                     |   |                      |   |   |   |   |
|                                                                                                                                                                                          |   | energy                technologies                  |   |                | 20.54        | %                        |   | 2,000,000                 |   |   | 1,000,000 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| SIVOO                Holdings, Inc.*(formerly BroadRelay Holdings, Inc.)                                                                                                                 |   | High              speed internet media              |   |                | 7.70         | %                        |   | 1,394,401                 |   |   | 374,965 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Warrants                to purchase 250,000 shares of SIVOO, Inc.* at an exercise price of                $0.65                per share expiring April 11, 2011                         |   | High              speed internet media              |   |                | 1.60         | %                        |   | -                         |   |   | 78,000 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Warrants                to purchase 150,000 shares of SIVOO, Inc.* at an exercise price of                $0.65                per share expiring November 14, 2011                      |   | High              speed internet media              |   |                | 0.99         | %                        |   | -                         |   |   | 48,000 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| BF                Acquisition Group V, Inc.*                                                                                                                                             |   | Inactive              company                       |   |                | 0.03         | %                        |   | 100,000                   |   |   | 1,625 |   |
|                                                                                                                                                                                     |   |                                                |        |                |    |                     |   |                      |   |   |   |   |   |
| Subtotal                affiliated companies                                                                                                                                             |   |                                                |   |                |         | 71.96                    | %      |                      |   |   |   | 3,502,590 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Third-Order                Nanotechnologies, Inc.(formerly PSI-TEC Holdings, Inc.)                                                                                                       |   | Plastics              engineering                   |   |                | 13.81        | %                        |   | 1,200,000                 |   |   | 672,000 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Warrants                to purchase 500,000 shares of Third-Order Nanotechnologies, Inc.                at an                exercise price of $0.25 per share expiring March 2012       |   | Plastics              engineering                   |   |                | 6.22         | %                        |   | -                         |   |   | 303,000 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Theater                Xtreme Entertainment Group, Inc.                                                                                                                                  |   | Home              theater sales and                 |   |                |         |                     |   |                      |   |   |   |   |
|                                                                                                                                                                                     |   | installation                                   |   |                | 3.82         | %                        |   | 725,936                   |   |   | 186,040 |   |
|                                                                                                                                                                                          |   |                                                     |   |                |         |                     |   |                      |   |   |   |   |
| Warrants                to purchase 500,000 shares of Theatre Extreme Entertainment Group,                Inc. at                an exercise price of $1.00 per share expiring July 2012 |   | Home                  theater sales andinstallation |   |                | 3.20         | %                        |   | -                         |   |   | 156,000 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Neptune                Industries, Inc.                                                                                                                                                  |   | Seafood              production                     |   |                | 0.44         | %                        |   | 47,619                    |   |   | 21,429 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| Gelstat                Corporation                                                                                                                                                       |   | Consumer              health care                   |   |                |         |                     |   |                      |   |   |   |   |
|                                                                                                                                                                                     |   | company                                             |   |                | 0.55         | %                        |   | 221,429                   |   |   | 26,571 |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                     |   |                      |   |   |   |   |   |
| IPI                Fundraising, Inc.                                                                                                                                                     |   | Sales              and distribution of              |   |                |         |                     |   |                      |   |   |   |   |
|                                                                                                                                                                                     |   | fundraising                products                 |   |                | 0.00         | %                        |   | 575,000                   |   |   | - |   |
|                                                                                                                                                                                     |   |                                                |   |                |         |                |   |                      |   |   |   |    |   |
| Total                (aggregate cost $5,331,025)                                                                                                                                         |   |                                                |   |                |         | 100.00                   | %      |                      |   |   | $ | 4,867,630 |   |

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

----

|                                                            |   | For                the Three |       | For                the Three |   |
|-----------------------------------------------------------------|--------|------------------------------|------------|------------------------------|--------|
|                                                            |   | Months                Ending |       | Months                Ending |   |
|                                                            |   | July                31, 2007 |       | July                31, 2006 |   |
|                                                            |   |                         |       |                         |   |
|                                                            |   |                         |       |                         |   |
| INCOME                                                          |   |                         |       |                         |   |
| Management                services                              |   | $                            | 375,296    |                         | $      | 585,900 |   |
| Interest                income                                  |   |                         | 2,154      |                         |   | 6,522 |   |
| Accounting                services                              |   |                         | 21,400     |                         |   | - |   |
|                                                            |   |                         | 398,850    |                         |   | 592,422 |   |
|                                                            |   |                         |       |                         |   |   |   |
|                                                            |   |                         |       |                         |   |   |   |
| COST                AND EXPENSE                                 |   |                         |       |                         |   |   |   |
| Bad                debt                                         |   |                         | 6,000      |                         |   | - |   |
| Depreciation                                                    |   |                         | 475        |                         |   | 475 |   |
| Dues                and subscriptions                           |   |                         | 40         |                         |   | - |   |
| Fees                and commissions                             |   |                         | 821        |                         |   | 3,582 |   |
| Insurance                                                       |   |                         | 23,255     |                         |   | 19,199 |   |
| Interest                expense                                 |   |                         | 10,827     |                         |   | 1,720 |   |
|                                                            |   |                         |       |                         |   |   |   |
| Marketing                                                       |   |                         | -          |                         |   | 3,424 |   |
|                                                            |   |                         |       |                         |   |   |   |
| Miscellaneous                general and administrative         |   |                         | 1,186      |                         |   | - |   |
| Office                expenses and supplies                     |   |                         | 1,484      |                         |   | 703 |   |
| Payroll                and payroll taxes                        |   |                         | 97,293     |                         |   | 308,014 |   |
| Postage,                delivery and shipping                   |   |                         | 1,260      |                         |   | 756 |   |
| Professional                fees                                |   |                         | 420,268    |                         |   | 519,648 |   |
| Rent                                                            |   |                         | 4,200      |                         |   | 4,200 |   |
| Taxes                - Other                                    |   |                         | -          |                         |   | 1,413 |   |
| Telephone                                                       |   |                         | 1,296      |                         |   | 806 |   |
| Travel                and entertainment                         |   |                         | 1,028      |                         |   | 22,090 |   |
| Utilities                                                       |   |                         | 599        |                         |   | 661 |   |
|                                                            |   |                         | 570,032    |                         |   | 886,691 |   |
|                                                            |   |                         |       |                         |   |   |   |
| LOSS                FROM OPERATIONS                             |   |                         | (171,182   | )                            |   | (294,269 | ) |
|                                                            |   |                         |       |                         |   |   |   |
| OTHER                INCOME (EXPENSE)                           |   |                         |       |                         |   |   |   |
| Net                realized gain on dividend of portfolio stock |   |                         | -          |                         |   | 343,924 |   |
| Interest                expense                                 |   |                         | (6,575     | )                            |   | - |   |
| Loss                on sale of portfolio stock                  |   |                         | (20,290    | )                            |   | - |   |
| Unrealized                depreciation on investments           |   |                         | (1,196,462 | )                            |   | (444,222 | ) |
| Income                tax benefit (provision)                   |   |                         | 68,000     |                         |   | 156,800 |   |
|                                                            |   |                         |       |                         |   |   |   |
| NET                DECREASE IN NET ASSETS                       |   |                         |       |                         |   |   |   |
| RESULTING                FROM OPERATIONS                        |   | $                            | (1,326,509 | )                            | $      | (237,767 | ) |

----

|                                                                |   | For                the Three |       |
|---------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                |   | Months                Ending |       |
|                                                                |   | July                31, 2007 |       |
|                                                                |   |                         |       |
|                                                                |   |                         |       |
| NET                DECREASE IN NET ASSETS RESULTING FROM OPERATIONS |   | $                            | (1,326,509 | ) |
|                                                                |   |                         |       |   |
| CAPITAL                SHARE TRANSACTIONS                           |   |                         |       |   |
| Share-based                compensation expense                     |   |                         | 2,334      |   |
|                                                                |   |                         |       |   |
| TOTAL                INCREASE (DECREASE)                            |   |                         | (1,324,175 | ) |
|                                                                |   |                         |       |   |
| NET                ASSETS, BEGINNING OF PERIOD                      |   |                         | 4,379,464  |   |
|                                                                |   |                         |       |   |
| ADJUSTMENT                FOR FIN 48                                |   |                         | 24,700     |   |
|                                                                |   |                         |       |   |
| NET                ASSETS, BEGINNING OF PERIOD - ADJUSTED           |   |                         | 4,404,164  |   |
|                                                                |   |                         |       |   |
| NET                ASSETS, END OF PERIOD                            |   | $                            | 3,079,989  |   |

----

|                                                                               |   | For                the Three |       | For                the Three |   |
|------------------------------------------------------------------------------------|--------|------------------------------|------------|------------------------------|--------|
|                                                                               |   | Months                Ending |       | Months                Ending |   |
|                                                                               |   | July                31, 2007 |       | July                31, 2006 |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                                |   |                         |       |                         |   |
| Net                decrease in net assets resulting from operations                |   | $                            | (1,326,509 | )                            | $      | (237,767 | ) |
|                                                                               |   |                         |       |                         |   |   |   |
| Adjustments                to reconcile net decrease in net assets                 |   |                         |       |                         |   |   |   |
| resulting                from operations to net cash used in operating activities: |   |                         |            |                         |   |  |   |
| Gain                on dividend of portfolio stock                                 |   |                         | -          |                         |   | (343,924 | ) |
| Loss                on sale of portfolio stock                                     |   |                         | 20,290     |                         |   | - |   |
| Investment                securities received in exchange for management svcs      |   |                         | (51,296    | )                            |   | (585,900 | ) |
| Depreciation                expense                                                |   |                         | 475        |                         |   | 475 |   |
| Stock                based compensation expense                                    |   |                         | 2,334      |                         |   | 180,944 |   |
| Stock                options granted for operating expense                         |   |                         | -          |                         |   | 447,000 |   |
| Net                unrealized depreciation on investments                          |   |                         | 1,196,462  |                         |   | 444,222 |   |
| Income                taxes                                                        |   |                         | -          |                         |   | - |   |
| Deferred                income taxes                                               |   |                         | (68,000    | )                            |   | (156,800 | ) |
| (Increase)                decrease in assets                                       |   |                         |       |                         |   |   |   |
| Notes                receivable                                                    |   |                         | (2,155     | )                            |   | - |   |
| Due                from portfolio companies                                        |   |                         | (4,698     | )                            |   | - |   |
| Miscellaneous                receivables                                           |   |                         | 4,799      |                         |   | (6,522 | ) |
| Due                from affiliates                                                 |   |                         | (4,780     | )                            |   | (9,059 | ) |
| Prepaid                expenses                                                    |   |                         | 8,961      |                         |   | 113 |   |
| Increase                (decrease) in liabilities                                  |   |                         |       |                         |   |   |   |
| Accounts                payable                                                    |   |                         | (36,598    | )                            |   | 126,520 |   |
| Accrued                interest                                                    |   |                         | 6,575      |                         |   | - |   |
| Accrued                expenses                                                    |   |                         | 82,950     |                         |   | - |   |
|                                                                               |   |                         |       |                         |   |   |   |
| Net                cash used in operating activities                               |   |                         | (171,190   | )                            |   | (140,698 | ) |
|                                                                               |   |                         |       |                         |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                |   |                         |       |                         |   |   |   |
| Loan                for notes receivable                                           |   |                         | (25,000    | )                            |   | (115,000 | ) |
|                                                                               |   |                         |       |                         |   |   |   |
| Net                cash provided by (used) in investing activities                 |   |                         | (25,000    | )                            |   | (115,000 | ) |
|                                                                               |   |                         |       |                         |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                |   |                         |       |                         |   |   |   |
|                                                                               |   |                         |       |                         |   |   |   |
| Proceeds                from advance from shareholder                              |   |                         | 88,000     |                         |   | - |   |
| Proceeds                from issuance of debt                                      |   |                         | -          |                         |   | 200,000 |   |
| Repayment                of subscription payable                                   |   |                         | -          |                         |   | (100,000 | ) |
| Proceeds                of issuance from common stock                              |   |                         | -          |                         |   | 241,280 |   |
|                                                                               |   |                         |       |                         |   |   |   |
| Net                cash provided by financing activities                           |   |                         | 88,000     |                         |   | 341,280 |   |
|                                                                               |   |                         |       |                         |   |   |   |
| NET                INCREASE IN CASH AND CASH EQUIVALENTS                           |   |                         | (108,190   | )                            |   | 85,582 |   |
|                                                                               |   |                         |       |                         |   |   |   |
| CASH                AND CASH EQUIVALENTS - BEGINNING OF PERIOD                     |   |                         | 110,739    |                         |   | 84,272 |   |
|                                                                               |   |                         |       |                         |   |   |   |
| CASH                AND CASH EQUIVALENTS - END OF PERIOD                           |   | $                            | 2,549      |                         | $      | 169,854 |   |
|                                                                               |   |                         |       |                         |   |   |   |
| NON-CASH                INVESTING AND FINANCING ACTIVITIES                         |   |                         |       |                         |   |   |   |
|                                                                               |   |                         |       |                         |   |   |   |
| Note                receivable for issuance of stock options                       |   | $                            | -          |                         | $      | 800,000 |   |

----

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

**Basis      of Presentation**

**Nature      of Business**

**Security      Valuations**

**Estimates**

**Cash      Equivalents**

**Concentration      of Credit Risk**

----

**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 |

**Fair      Value of Financial Instruments**

**Income      Taxes**

**Recoverability      of Long Lived Assets**

**Recently      Issued Pronouncements**

*Fair      Value Measurements*

----

**NOTE      1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

**Recently      Issued Pronouncements (Continued)**

*The      Fair Value Option for Financial Assets and Financial      Liabilities*

----

**NOTE      2 - INVESTMENTS**

|                                                                |   | Number                of        |      |   |   |   |      |                         |      |                         |   |
|---------------------------------------------------------------------|--------|---------------------------------|-----------|--------|--------|--------|-----------|------------------------------|-----------|------------------------------|--------|
|                                                                |   | Shares                Held      |      |   |   |   |      | Value                at      |      | Unrealized                   |   |
|                                                                |   | at                July 31, 2007 |      |   |   | Cost   |      | July                31, 2007 |      | Gain                / (Loss) |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |
| Affiliated                Securities*                               |   |                            |      |   |   |   |      |                         |      |                         |   |
| Extreme                Visual Technologies, Inc. *****              |   |                            | 2,000,000 | ****   |   | $      | 1,813,887 |                         | $         | 2,000,000                    |   | $ | 186,113 |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| SIVOO,                Inc.**                                        |   |                            | 1,394,401 | ****   |   |   | 526,100   |                         |      | 374,965                      |   |   | (151,135 | ) |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Warrants                to purchase 400,000 shares of SIVOO, Inc.** |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| 250,000                warrants expiring April 11, 2011             |   |                            | 250,000   |   |   |   |      |                         | -         |                         |   | 78,000 |   |   | 78,000 |   |
| 150,000                warrants expiring November 14, 2011          |   |                            | 150,000   |   |   |   |      |                         | -         |                         |   | 48,000 |   |   | 48,000 |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Creative                Energy Solutions, Inc. *****                |   |                            | 2,000,000 | ****   |   |   | 1,000,000 |                         |      | 1,000,000                    |   |   | - |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| BF                Acquisition Group V, Inc.                         |   |                            | 100,000   | ****   |   |   | 1,625     |                         |      | 1,625                        |   |   | - |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Total                Affiliated Securities                          |   |                            |      |   |   |   |      |                         | 3,341,612 |                         |   | 3,502,590 |   |   | 160,978 |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Non-affiliated                Securities                            |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Third-Order                Nanotechnologies, Inc.***                |   |                            | 1,200,000 | ****   |   |   | 1,164,000 |                         |      | 672,000                      |   |   | (492,000 | ) |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Warrants                to purchase 500,000 shares of               |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Third-Order                Nanotechnologies, Inc.***                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| expiring                March 1, 2012                               |   |                            | 500,000   |   |   |   |      |                         | -         |                         |   | 303,000 |   |   | 303,000 |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Theater                Xtreme Entertainment Group, Inc.             |   |                            | 725,936   |   |   |   |      |                         | 448,788   |                         |   | 186,040 |   |   | (262,748 | ) |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Warrants                to purchase 500,000 shares of               |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Theater                Xtreme Entertainment Group, Inc.***          |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| expiring                July, 2012                                  |   |                            | 500,000   |   |   |   |      |                         | -         |                         |   | 156,000 |   |   | 156,000 |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Neptune                Industries, Inc.                             |   |                            | 47,619    |   |   |   |      |                         | 20,000    |                         |   | 21,429 |   |   | 1,429 |   |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Gelstat                Corporation                                  |   |                            | 221,429   |   |   |   |      |                         | 350,000   |                         |   | 26,571 |   |   | (323,429 | ) |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| IPI                Fundraising, Inc.                                |   |                            | 575,000   |   |   |   |      |                         | 6,625     |                         |   | - |   |   | (6,625 | ) |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Total                Non-Affiliated Securities                      |   |                            |      |   |   |   |      |                         | 1,989,413 |                         |   | 1,365,040 |   |   | (624,373 | ) |
|                                                                |   |                            |      |   |   |   |      |                         |      |                         |   |   |   |   |   |   |
| Total                Securities                                     |   |                            |      |   |   |   |      | $                            | 5,331,025 |                         | $      | 4,867,630 |   |   | ($463,395 | ) |

| *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.                                                                                                         |   |   |   |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |
| ****Restricted                shares                                                                                                                               |   |   |   |   |   |
|                                                                                                                                                               |   |   |   |   |   |   |   |   |   |
| *****Private                company                                                                                                                                |   |   |

----

**NOTE      3 - INCOME TAXES**

*Accounting      for Uncertainty in Income Taxes*

|                                                  |   | July                  31, 2007 |     |
|-------------------------------------------------------|--------|--------------------------------|----------|
| Deferred                  tax (asset) liability       |   |                           |     |
| Deferred                  charges                     |   | $                              | (94,000  | ) |
| Net                  operating loss                   |   |                           |     |   |
| Unrealized                  loss                      |   |                           | (185,000 | ) |
| Capital                  loss carryforward            |   |                           | (127,000 | ) |
| Stock-based                  compensation             |   |                           | (76,000  | ) |
| Unrecognized                  tax benefits            |   |                           | (272,000 | ) |
| Other                                                 |   |                           | (2,000   | ) |
|                                                  |   |                           |     |   |
| Total                                                 |   |                           | (756,000 | ) |
|                                                  |   |                           |     |   |
| Less:                  Valuation allowance            |   |                           | 484,000  |   |
|                                                  |   |                           |     |   |
| Total                  deferred tax (asset) liability |   | $                              | (272,000 | ) |

----

**NOTE      3 - INCOME TAXES (CONTINUED)**

**NOTE      4 - PREPAID EXPENSES`**

**NOTE      5 - DUE FROM AFFILIATES**

|                                                         |   | July                31, 2007 |   |
|--------------------------------------------------------------|--------|------------------------------|--------|
| Due                from affiliates consist of the following: |   |                         |   |
|                                                         |   |                         |   |
| Due                from BF Acquisition Group V, Inc          |   |                         | 45,019 |   |
|                                                         |   |                         |   |   |
| Total                                                        |   | $                            | 45,019 |   |

**NOTE      6 - DEFERRED REVENUE**

**NOTE      7 - NOTES PAYABLE**

|                                                           |   | July                31, 2007 |    |
|----------------------------------------------------------------|--------|------------------------------|---------|
|                                                           |   |                         |    |
| Notes                payable. Interest accrued at the          |   |                         |    |
| prime                rate of interest, 8.25% at July 31, 2007. |   |                         |    |
| Principal                and interest are payable on demand    |   | $                            | 425,000 |   |

**NOTE      9 - ADVANCES FROM SHAREHOLDER**

----

**NOTE      10 - STOCK BASED COMPENSATION**

*Share-Based      Payment*
*Accounting      for Stock Issued to Employees*
*Statement      of Cash Flows*

*Accounting      for Stock-Based Compensation*
*Accounting      for Stock Issued to Employees*

----

**NOTE      10 - STOCK BASED COMPENSATION (CONTINUED)**

|                                       |   | Stock                Options Outstanding |    |
|--------------------------------------------|--------|------------------------------------------|---------|
|                                       |   |                                     |    |   |   | Weighted                Average |   |
|                                       |   | Number                of Shares          |    | Exercise                Price |   | Exercise                Price |   |
|                                       |   |                                     |    |   |   |   |   |
| Outstanding,                April 30, 2007 |   |                                     | 185,000 |   | $ | 2.00 |   | $ | 2.00 |   |
|                                       |   |                                     |    |   |   |   |   |   |   |   |
| Expired                                    |   |                                     | (60,000 | ) | $ | - |   | $ | - |   |
|                                       |   |                                     |    |   |   |   |   |   |   |   |
| Outstanding,                July 31, 2007  |   |                                     | 125,000 |   | $ | 2.00 |   | $ | 2.00 |   |
|                                       |   |                                     |    |   |   |   |   |   |   |   |
| Exercisable,                July 31, 2007  |   |                                     | 110,946 |   | $ | 2.00 |   | $ | 2.00 |   |

| Stock                Options Outstanding  |   |
|------------------------------------------------|--------|
|                                           |   | Number                Outstanding |   | Weighted |   | Weighted                Average |   |
| Rance                of                        |   | Currently                Exercisable |   | AverageRemaining |   | Exercise                Price of                Options |   |
| Exercise                Prices                 |   | at                July 31, 2007 |   | Contractual                Life |   | Currently                Exercisable |   |
|                                           |   |   |   |   |   |   |   |
| $                2.00                          |   |   | 110,946 |   |   | 1.83                years |   | $ | 2.00 |   |

**NOTE      11 - CONTINGENCY**

**McCrae      Associates, LLC Lawsuit**

----

**NOTE      11 - CONTINGENCY (CONTINUED)**

**Ronald      R. Genova Lawsuit**

**NOTE      12 - FINANCIAL HIGHLIGHTS**

|                                                               |   | July                31, 2007 |   |
|--------------------------------------------------------------------|--------|------------------------------|--------|
| Per                Share Operating Performance                     |   |                         |   |
| Net                asset value, beginning of period                |   | $                            | 0.81   |   |
|                                                               |   |                         |   |   |
| Income                from operations, net of taxes                |   |                         | (0.02  | ) |
| Unrealized                depreciation on investment, net of taxes |   |                         | (0.22  | ) |
| Gain                on property dividend, net of taxes             |   |                         | -      |   |
| Loss                on sale of stock                               |   |                         | -      |   |
|                                                               |   |                         | 0.57   |   |
| Add                capital share transactions                      |   |                         | -      |   |
|                                                               |   |                         |        |   |
| Net                asset value, end of period                      |   | $                            | 0.57   |   |
|                                                               |   |                         |   |   |
| Total                Return                                        |   |                         | -4.59  | % |
|                                                               |   |                         |   |   |
| Average                Net Assets as a percentage of:              |   |                         |   |   |
| Expenses                                                           |   |                         | 15.28  | % |
| Management                income                                   |   |                         | 10.64  | % |

----

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

**Introduction**

----

**Financial      Condition**

|                                                                                           |   |  **At                the Quarter Ended****July                31, 2007** |            |  **At                the Year Ended****April                30, 2007** |   |
|------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|-----------------|-----------------------------------------------------------------------------|--------|
| **TOTAL                ASSETS**                                                                |   | **$**                                                                         | **5,395,302**   |                                                                        | **$**  | **6,353,346** |   |
| **NET                ASSETS**                                                                  |   | **$**                                                                         | **3,079,989**   |                                                                        | **$**  | **4,379,464** |   |
| **NET                ASSET VALUE PER SHARE**                                                   |   | **$**                                                                         | **0.57**        |                                                                        | **$**  | **0.81** |   |
| **NET                UNREALIZED APPRECIATION/(DEPRECIATION)****ON                INVESTMENTS** |   |                                                                          | **($1,196,462** | **)**                                                                       |   | **($58,953** | **)** |

----

----

**Results      of Operations**

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

**Liquidity      and Capital Resources**

----

**Critical      Accounting Estimates**

**Valuation**

----

**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. |
|                                    |                                         |                         |
| September              14,              2007 | By:                                     | /s/              Michael D. Queen |
|                                         | Michael                D. Queen, President        |

|                                         |                                         |                                     |
|----------------------------------------------|----------------------------------------------|------------------------------------------|
| September              14,              2007 | By:                                | /s/              Joseph T. Drennan  |
|                                         | Joseph              T. Drennan, Treasurer    |
|                                         | (Principal                Financial Officer) |

----