SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

    |X|      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended September 30, 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: 0-27210



                                  Zunicom, Inc.
             (Exact name of registrant as specified in its charter)

                  TEXAS                                   75-2408297
    (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                    Identification No.)

  4315 West Lovers Lane, Dallas, Texas                       75209
(Address of principal executive offices)                  (Zip Code)

                                 (214) 352-8674
              (Registrant's telephone number, including area code)

                                      None
(Former name,former address and former fiscal year,if changed since last report)

           Securities registered pursuant to Section 12(b) of the Act:


                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $0.01 Par Value
                          -----------------------------
                                (Title of Class)

                    Class A Preferred Stock, $1.00 Par Value
                    ----------------------------------------
                                (Title of Class)

         Units, consisting of one (1) share of Common Stock and one (1)
                        share of Class A Preferred Stock
               --------------------------------------------------
                                (Title of Class)

                                        1

<PAGE>
     Indicate by check mark if the registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act.
                                                         Yes [ ] No [X]

     Indicate by check mark if the  registrant  is not  required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act.
                                                         Yes [ ] No [X]

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                                                         Yes [X] No [ ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

   Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).
                                                         Yes [ ] No [X]

     As of November 12, 2007, 9,957,191 shares of Common Stock were outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None


























                                        2
<PAGE>
                                  Zunicom, Inc.
                                      INDEX

                                                                      Page
                                                                      ----
PART I - Financial Information

Item 1.  Financial Statements

Unaudited Consolidated Balance Sheet at September 30, 2007
And Audited Consolidated Balance Sheet at  December 31, 2006. . . .   4

Unaudited Consolidated Statements of Operations for the three
and nine months ended September 30, 2007 and 2006 . . . . . . . . .   6
Unaudited Consolidated Statements of Cash Flows for the nine
months ended September 30, 2007 and 2006 . . . . . . . . . . . .. .   8

Notes to Unaudited Consolidated Financial Statements . . . . . . . . 10

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . . 17

Item 3.  Quantitative and Qualitative Disclosures About Market Risk. 21

Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . . .  21


PART II - Other Information

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . .   22

Item 6.  Exhibits. . . . . . . . . . . . . . . . . . . . . . . . .   22

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23

Certifications





















                                        3

<PAGE>
PART  I  -  FINANCIAL  INFORMATION
----------------------------------
Item  1.  Financial  Statements

                          ZUNICOM, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                   September 30,    December 31,
                                                       2007            2006
                                                       ----            ----
                                                     Unaudited       Audited
CURRENT ASSETS
 Cash and cash equivalents                         $     529,101  $   8,259,709
 Accounts receivable - trade, net of
  allowance for doubtful accounts of
  $4,889 and $4,889                                       10,904         23,232
 Interest receivable from unconsolidated investee          9,616         10,578
 Notes receivable from unconsolidated investee -

   current portion                                       365,625              -
 Inventories - finished goods                             18,693         20,142
 Prepaid expenses and other current assets                76,710         70,426
                                                   -------------  -------------
     Total current assets                              1,010,649      8,384,087

PROPERTY AND EQUIPMENT
 Business center equipment                               950,869        972,832

 Machinery and equipment                                  98,606         24,870
 Computer equipment                                      146,321        145,454
 Furniture and fixtures                                   19,658         33,298
 Leasehold improvements                                  121,719        122,365
                                                   -------------  -------------
                                                       1,337,173      1,298,819

 Less accumulated depreciation and amortization       (1,170,637)    (1,073,259)
                                                   -------------  -------------
     Net property and equipment                          166,536        225,560
                                                   -------------  -------------
NOTES RECEIVABLE FROM UNCONSOLIDATED INVESTEE          5,484,375      5,850,000

DEFERRED STOCK COMPENSATION                              192,138              -

INVESTMENT IN UNCONSOLIDATED INVESTEE                  7,234,541      6,125,383
                                                   -------------  -------------
TOTAL ASSETS                                       $  14,088,239  $  20,585,030
                                                   =============  =============



            The accompanying footnotes are an integral part of these
                       consolidated financial statements.




                                        4
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                UNAUDITED CONSOLIDATED BALANCE SHEETS - Continued

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                   September 30,    December 31,
                                                       2007            2006
                                                       ----            ----
                                                     Unaudited       Audited
CURRENT LIABILITIES
 Accounts payable                                  $     210,241  $     237,310
 Accrued liabilities                                     175,853        395,633
 Due to unconsolidated investee                                -        186,619
                                                   -------------  -------------
    Total current liabilities                            386,094        819,562

NON-CURRENT DEFERRED TAX LIABILITY                     3,824,222      3,824,222
                                                   -------------   ------------
TOTAL LIABILITIES                                      4,210,316      4,643,784

STOCKHOLDERS' EQUITY
 Preferred stock - $1.00 par value,
  1,000,000 shares authorized; 61,988
  and 86,988 Class A Preferred Shares
  issued and outstanding                                  61,988         86,988
 Common stock - $0.01 par value;
  50,000,000 shares authorized;
  9,957,191 and 8,891,394 shares
  issued and out-standing                                 99,571         88,914
  Additional paid-in capital                           9,268,412     14,818,893
  Retained earnings                                      447,952        946,451
                                                   -------------  -------------
    Total stockholders' equity                         9,877,923     15,941,246
                                                   -------------  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $  14,088,239  $  20,585,030
                                                   =============  =============














            The accompanying footnotes are an integral part of these
                       consolidated financial statements.





                                        5
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<S>                          <C>           <C>          <C>            <C>
                             For the three months ended  For the nine months ended
                             --------------------------- ---------------------------
                                      September 30,              September 30,
                                       --------                    --------
                                  2007          2006          2007          2006
                                  ----          ----          ----          ----
REVENUES
 Sales                       $          -  $ 23,770,977 $           -  $ 68,016,953
 Service revenue                  360,272       413,750     1,161,152     1,321,706
                             ------------  ------------ -------------  ------------
                                  360,272    24,184,727     1,161,152    69,338,659
COST OF REVENUES
 Cost of goods sold                     -    20,296,480             -    58,342,648
 Direct servicing costs           117,532       110,156       338,324       396,428
                             ------------  ------------ -------------  ------------
                                  117,532    20,406,636       338,324    58,739,076
                             ------------  ------------ -------------  ------------
GROSS PROFIT                      242,740     3,778,091       822,828    10,599,583

OPERATING EXPENSES
 Selling, general and
  administrative                  369,606     2,738,285     1,322,546     7,917,044
Depreciation and
  amortization of property
  and equipment                    32,213        70,234        97,378       223,325
                             ------------  ------------ -------------  ------------
                                  401,819     2,808,519     1,419,924     8,140,369
                             ------------  ------------ -------------  ------------
INCOME (LOSS) FROM OPERATIONS    (159,079)      969,572      (597,096)    2,459,214

OTHER EXPENSES
 Interest income (expense)
  net, including $,91,529
  $0,$350,640, and $8,293
  from related parties             91,441      (194,104)      350,178      (605,325)
 Equity in earnings of
  investee                        272,892                     713,041             -
 Gain on equity transactions
  of investee                           -                      18,725             -
 Other, net                        (4,788)       16,423       (17,228)       19,852
                             ------------  ------------  ------------  ------------
                                  359,545      (177,681)    1,064,716      (585,473)
                             ------------  ------------  ------------  ------------
INCOME BEFORE PROVISION
  FOR INCOME TAXES                200,466       791,891       467,620     1,873,741
</TABLE>




            The accompanying footnotes are an integral part of these
                       consolidated financial statements.


                                        6

<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
           UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (continued)

<TABLE>
<S>                          <C>           <C>           <C>           <C>
                             For the three months ended  For the nine months ended June
                             --------------------------  -----------------------------
                                     September 30,               September 30,
                                       --------                    --------
                                  2007          2006          2007          2006
                                  ----          ----          ----          ----
PROVISION FOR INCOME TAXES              -       (79,281)             -      (79,281)
                             ------------  ------------  ------------  ------------
NET INCOME                   $    200,466  $    712,610       467,620  $  1,794,460
                             ============  ============  ============  ============
Net income attributable
 to common stockholders      $    194,858     $ 704,973  $    447,952  $  1,770,369
                             ============  ============  ============  ============
Net income per share
 attributable to common
 stockholders
    Basic                    $       0.02  $       0.08  $       0.05  $       0.20
                             ============  ============  ============  ============
    Diluted                  $       0.02  $       0.07  $       0.05  $       0.18
                             ============  ============  ============  ============
Cash dividends per share     $          -  $          -  $       0.80  $          -
                             ============  ============  ============  ============
Number of weighted average
 shares of common stock
 outstanding
    Basic                       9,949,752     8,879,057     9,288,767     8,824,498
                             ============  ============  ============  ============
    Diluted                    10,073,728     9,500,071     9,448,855     9,605,391
                             ============  ============  ============  ============
</TABLE>


            The accompanying footnotes are an integral part of these
                       consolidated financial statements.


















                                        7
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For The Nine Months Ended September 30, 2007 and 2006


                                                          2007         2006
                                                          ----         ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                           $    467,620  $  1,794,460
Adjustments to reconcile net income
to net cash used in operating  activities:
  Depreciation and amortization of
    property and equipment                                 97,378       223,325
  Provision for bad debts                                       -       181,335
  Provision for obsolete inventory                              -       120,000
  Write off of property and equipment                           -         7,121
  Gain on equity transactions of investee                ( 18,725)            -
  Equity in earnings of investee                         (713,041)            -
  Non-cash stock-based compensation                        52,649             -
  Change in operating assets and liabilities:
     Accounts receivable - trade                           12,328    (1,235,743)
     Accounts receivable - other                              962        96,493
     Inventories                                            1,449    (1,760,866)
     Prepaid expenses and other current assets             (6,284)      (25,454)
     Other assets                                               -             -
     Accounts payable                                     (27,069)   (1,476,230)
     Accrued liabilities                                 (219,780)      772,139
     Deferred rent                                              -       (20,139)
     Deferred Stock Compensation                         (192,138)
     Due to investee                                     (186,619)            -
                                                     ------------  ------------
Net cash used in operating activities                    (731,270)   (1,323,559)
                                                     ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                      (38,354)     (195,983)
                                                     ------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net activity on line of credit                                -     2,360,081
  Proceeds from exercise of warrants                            -       182,500
  Repayment of notes payable - related party                    -      (217,128)
  Repayment of long-term debt                                   -       (15,616)
  Amortization of deferred stock compensation             (13,663)            -
  Issuance of Restricted Stock                            205,801             -
  Dividends paid on common stock                       (7,153,122)            -
                                                     ------------  ------------
Net cash provided (used in) by financing activities    (6,960,984)    2,309,837
                                                     ------------  ------------


            The accompanying footnotes are an integral part of these
                       consolidated financial statements.






                                        8

<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
           For The Nine Months Ended September 30, 2007 and 2006 (continued)


                                                          2007         2006
                                                          ----         ----

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (7,730,608)      790,295

Cash and cash equivalents at beginning of period        8,259,709       731,626
                                                     ------------  ------------
Cash and cash equivalents at end of period           $    529,101  $  1,521,921
                                                     ============  ============
SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid                                        $        462  $    605,325
                                                     ============  ============
Income taxes paid                                    $    230,000  $     79,281
                                                     ============  ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
    AND FINANCING ACTIVITIES

     Dividends paid through issuance of common stock $     19,668  $     24,091
                                                     ============  ============
     Conversion of preferred stock to common stock   $     25,000  $      2,000
                                                     ============  ============
     Capital contribution to unconsolidated investee $    377,392  $          -
                                                     ============  ============

















            The accompanying footnotes are an integral part of these
                       consolidated financial statements.









                                        9
<PAGE>
                          ZUNICOM, INC. AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and in accordance with the  instructions to Form 10-Q and
Article  10 of  Regulation  S-X.  Accordingly,  they do not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements.

In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments) considered necessary for a fair presentation have been included for
the three month and nine month period ended  September 30, 2007. The results for
the  three  month  and  nine  month  period  ended  September  30,  2007 are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 2007. The unaudited  consolidated  financial statements included in
this  filing  should  be  read  in  conjunction   with  the  Company's   audited
consolidated  financial  statements and notes thereto  included in the Company's
annual report on form 10-K for the year ended December 31, 2006.

In December 2006 the Company's  previously  wholly-owned  subsidiary,  Universal
Power Group,  Inc. ("UPG" or "Universal"),  completed an initial public offering
which resulted in the Company's ownership interest in UPG being reduced from 100
percent  to  its  present  ownership   interest  of  40  percent.   The  Company
consolidated  UPG in its  financial  statements  until  December  20,  2006  and
currently accounts for UPG as an unconsolidated investee under the equity method
of accounting.  The Company has adopted the income  statement  gain  recognition
method of accounting  for issuances of a subsidiary's  stock in accordance  with
SEC Staff Accounting Bulletin No. 51.

Recent Accounting Pronouncements

The Company  adopted the  provisions  of Financial  Standards  Accounting  Board
Interpretation  No.  48,  "Accounting  for  Uncertainty  in  Income  Taxes  - an
Interpretation  of FASB Statement No. 109 ("FIN 48"), on January 1, 2007.  There
were no unrecognized tax benefits and,  accordingly,  there was no effect on the
Company's   financial  condition  or  results  of  operations  as  a  result  of
implementing FIN 48.

The  Company  files  income tax  returns in the U.S.  federal  jurisdiction  and
various  state and foreign  jurisdictions.  The Company is no longer  subject to
U.S.  federal tax examinations for years before 2003, and state tax examinations
for years before 2002.  Management  does not believe  there will be any material
changes in our unrecognized tax positions over the next 12 months.

The  Company's  policy is to  recognize  interest and  penalties  accrued on any
unrecognized  tax benefits as a component of income tax expense.  As of the date
of adoption of FIN 48,  there was no accrued  interest or  penalties  associated
with any  unrecognized  tax benefits,  nor was any interest  expense  recognized
during the three and six month periods ended September 30, 2007.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157").  SFAS 157 defines fair value,  establishes a framework for measuring fair


                                       10
<PAGE>
value in accordance with accounting  principles generally accepted in the United
States, and expands disclosures about fair value  measurements.  SFAS No. 157 is
effective  for  financial  statements  issued for fiscal years  beginning  after
November 15, 2007, with earlier application  encouraged.  Any amounts recognized
upon adoption as a cumulative effect adjustment will be recorded to the opening
balance of retained  earnings in the year of  adoption.  The Company has not yet
determined  the  impact  of this  statement  on its  results  of  operations  or
financial condition.

In February 2007, the FASB issued  Statement of Financial  Accounting  Standards
No. 159, "The Fair Value Option for Financial  Assets and Financial  Liabilities
-- Including an amendment of FASB Statement No. 115," (SFAS 159).  This standard
allows a company to  irrevocably  elect fair value as the initial and subsequent
measurement  attribute for certain financial assets and financial liabilities on
a contract-by-contract basis, with changes in fair value recognized in earnings.
The provisions of this standard are effective as of the beginning of a reporting
entity's  first fiscal year  beginning  after  November 15, 2007. The Company is
currently  evaluating  what  effect the  adoption of SFAS 159 will have on their
consolidated financial statements.

NOTE B - ORGANIZATION

Zunicom,  Inc., ("Zunicom" or the "Company") was formed on January 10, 1992 as a
Texas corporation.  Zunicom's  consolidated  wholly-owned  subsidiary,  AlphaNet
Hospitality  Systems  Inc.  ("AlphaNet"),  is a provider of guest  communication
services  to the  hospitality  market.  Zunicom  holds  a 40  percent  ownership
interest in UPG, a  distributor  and supplier to a diverse and growing  range of
industries  of portable  power and  related  synergistic  products,  provider of
third-party logistics services and a custom battery pack assembler.

NOTE C - STOCK-BASED COMPENSATION

Stock-based  compensation  expense for the three months ended September 30, 2007
was  $12,959,   which  relates  to  the  restricted  stock  issued  as  deferred
compensation. Stock based compensation for the nine-month period ended September
30, 2007 was $52,649,  which  represents  $38,986 for stock  options  granted in
February 2007 and $13,663 for the restricted stock compensation. The Company had
no stock-based  compensation  for the nine month period ended September 30, 2006
as all outstanding options were fully vested at the beginning of the period.

STOCK OPTIONS

     Valuation Assumptions

The Company  granted  options to purchase  25,000  shares of its common stock on
February 1, 2007. These options were immediately  vested.  There were no options
granted  during the nine months ended  September  30,  2006.  The fair values of
option  awards were  estimated  at the grant date using a  Black-Scholes  option
pricing model with the following assumptions for the nine months ended September
30, 2007:







                                       11
<PAGE>
                                                       For the nine Months Ended
                                                             September 30, 2007
                                                             -------------
Weighted average grant date fair value                            $      1.56
Weighted average assumptions used:
   Expected dividend yield                                              0.00%
   Risk-free interest rate                                              4.60%
   Expected volatility                                                   138%
   Expected life (in years)                                                 5

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options  that have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

Expected  volatility  is based  on  historical  volatility.  The  expected  term
considers the contractual term of the option as well as historical  exercise and
forfeiture behavior. The risk-free interest rate is based on the rates in effect
on the grant date for U.S.  Treasury  instruments  with maturities  matching the
relevant expected term of the award.

   Activity and Summary

Stock option activity under the 1999 Stock Option Plan was as follows:

                                                            Weighted Average
                                           Number of Shares  Exercise Price
                                           ----------------  --------------
Options outstanding at December 31, 2006          1,054,500     $      0.84

      Granted                                        25,000     $      1.75

      Exercised                                           -     $         -

      Canceled, lapsed  or forfeited               (654,500)    $      0.81
                                           ----------------
Options outstanding and exercisable
  at September 30, 2007                             425,000     $      0.95
                                           ================

Of the 1,054,500 options  outstanding as of December 31, 2006, 654,500 lapsed as
of February  25,  2007,  in  accordance  with the terms of the 1999 Stock Option
Plan.  Under the terms of that plan, if the  Company's  interest in a subsidiary
falls  below 50%,  employees  of that  subsidiary  will no longer be  considered
employees of the Company for purposes of the Plan and any options they hold will
lapse 60 days  from  the  event  which  caused  the  Company's  interest  in the
subsidiary  to drop  below  50%.  Accordingly,  certain  employees  of UPG  were
affected by the IPO of UPG, which  resulted in the Company's  interest in UPG to
be reduced from 100% to 40%.



                                       12
<PAGE>
The following table  summarizes stock options  outstanding  under the 1999 Stock
Option Plan at September 30, 2007:

                       Options Outstanding            Options Exercisable
                             Weighted
                              Average
                             Remaining   Weighted                 Weighted
Range of         Number of  Contractual  Average     Number of    Average
Exercise          Options      Life      Exercise     Options     Exercise
Prices          Outstanding (in years)    Price     Exercisable    Price
--------------- ----------- -----------  --------   -----------   --------
$ 0.90              400,000        2.4   $   0.90      400,000    $   0.90

$ 1.75               25,000        9.8   $   1.75       25,000    $   1.75
                ----------- ----------   --------   ----------    --------
$ 0.90 - $ 1.75     425,000        2.8   $   0.95      425,000    $   0.95
                =========== ==========   ========   ==========    ========

At September 30, 2007, the aggregate  intrinsic value of options outstanding was
$0.0. The aggregate  intrinsic value is calculated as the difference between the
exercise  price of the  underlying  awards and the quoted price of the Company's
common stock for those awards that have an exercise  price  currently  below the
quoted price. At September 30, 2007, all outstanding options were fully vested.

RESTRICTED STOCK

On June 25, 2007, the Board of Directors of Zunicom approved a grant of 996,940
restricted shares of Zunicom's common stock to our chairman and certain officers
and employees of UPG. Several of the officers and employees of UPG had been
officers and employees of Zunicom prior to the deconsolidation of UPG in
December 2006. The Company attributed a value of $205,801 to the restricted
stock granted to our chairman and $377,392 to the restricted stock granted to
the officers and employees of UPG. The grant was made in recognition of past and
future performance especially with regard to the initial public offering of
UPG's common stock in which Zunicom was able to sell $1,000,000 shares of UPG
common stock resulting in an $0.80 dividend to shareholders paid in the first
quarter of 2007. The restricted stock vests in full on June 25, 2011, and is
subject to certain restrictions and obligations up to the point of vesting. The
stock will not be registered and will be held in escrow for the benefit of the
grantee until the vesting date. Our chairman relinquished options on 400,000
shares of Zunicom common stock, and the officers and employees of UPG held
options on 653,000 shares of Zunicom common stock which lapsed after the
deconsolidation of UPG.

In accordance with FASB 123R, we accounted for the grant of restricted shares to
our chairman as stock based compensation. We accounted for the grant of
restricted shares to UPG officers and employees as a contribution of capital in
accordance with EITF 00-12, "Accounting by an Investor for Stock-Based
Compensation Granted to Employees of an Equity Method Investor." We will
amortize 60% of that capital contribution as additional equity in earnings
(loss) of the investee over the vesting period. The Company concluded that it is
reasonable to discount the value of these restricted shares by 29.52%. Of the
29.52% discount, the Company considers the risk of forfeiture to be 10% and
illiquidity to be 19.52%. The Company applied this discount to the grant date
market value of a freely tradable share to arrive at the fair value of a
restricted share.

                                       13
<PAGE>
NOTE D - NET INCOME PER SHARE

Basic net income per share is computed by dividing  net income  decreased by the
preferred  stock  dividends  of $19,668 and  $24,091  for the nine months  ended
September 30, 2007 and 2006,  respectively,  by the weighted  average  number of
common shares outstanding for the period.

Diluted net income per share is computed by dividing net income decreased by the
preferred  stock  dividends by the weighted  average number of common shares and
common stock equivalents  outstanding for the period. The Company's common stock
equivalents include all common stock issuable upon conversion of preferred stock
and the exercise of outstanding stock options and warrants.

The dilutive  effect of 425,000 options has not been included in the computation
of dilutive net income per share for the three and nine months  ended  September
30, 2007. The options are "out of the money," i.e. the market price of the stock
is below the strike price of the options.

NOTE E - UNCONSOLIDATED SUBSIDIARY - INVESTEE

UPG was a consolidated subsidiary of the Company for the nine month period ended
September  30, 2006 and is accounted  for under the equity  method of accounting
for the nine month period ended  September  30, 2007.  Following is a summary of
financial  information for UPG for the three and nine months ended September 30,
2007 and 2006 (in thousands):

                             ---------------     ---------------
                              Three Months         Nine Months
                                  Ended               Ended
                             ---------------     ---------------
                               September 30,      September 30,
                              2007  2006          2007   2006
                             ---------------     ---------------
                                $ in 000's          $ in 000's
                             ---------------     ---------------
---------------------------- ------- -------     ------- -------
Net revenue                  29,788  23,772      79,731  68,017
---------------------------- ------  ------      ------  ------
Cost of revenue              25,546  20,296      67,903  58,343
---------------------------- ------  ------      ------  ------
Gross profit                  4,242   3,476      11,828   9,674
---------------------------- ------  ------      ------  ------
Operating expenses            3,198   2,530       8,534   7,096
---------------------------- ------  ------      ------  ------
Income from operations        1,044     957       3,294   2,578
---------------------------- ------  ------      ------  ------
Interest expense               (225)   (194)       (958)   (596)
---------------------------- ------  ------      ------  ------
Other income                     56       9         396      18
---------------------------- ------  ------      ------  ------
Income from operations
before income tax provision     875     761       2,733   2,000
---------------------------- ------  ------      ------  ------
Income tax provision           (193)   (307)       (949)   (832)
---------------------------- ------  ------      ------  ------
Net income                      682     454       1,784   1,168
============================ ======  ======      ======  ======
                                       14
<PAGE>
At September 30, 2007 the carrying value of the Company's  investment in UPG was
$7,234,541.  The market value of the 2,000,000  shares of UPG's common stock the
Company owns was  approximately  $9,220,000 based on the closing price per share
at September 28, 2007 of $4.61.

NOTE F - RELATED PARTY NOTE

The Company holds two unsecured  promissory notes from UPG, one in the amount of
$3,000,000  and a  second  note in the  amount  of  $2,850,000  for a  total  of
$5,850,000.  Both notes are dated  December  20,  2006 and carry the same terms.
These terms provide for quarterly  interest  payments at an annual interest rate
of 6% and principal payments in 16 equal quarterly installments of $365,625 each
beginning  September  20,  2008.  As of  September  30,  2007,  $365,625  of the
principal  payment is classified as current,  leaving  $5,484,375  classified as
long term.

NOTE G - SHAREHOLDERS' EQUITY

During the nine  months  ended  September  30,  2007,  the  Company  paid a cash
dividend of $0.80 per share,  totaling  $7,153,122 to shareholders of its common
stock. The dividend was paid on March 23, 2007 primarily from proceeds  received
from the sale of  1,000,000  shares of common stock of UPG that the Company sold
in UPG's IPO.

During the nine months ended  September 30, 2007,  the Company paid dividends of
$19,668 on the class A Preferred  Stock through the issuance of 18,857 shares of
the Company's common stock.  During the first quarter of 2007, certain preferred
stockholders  converted  25,000  shares of the  Company's  preferred  stock into
50,000 shares of the Company's common stock.

NOTE H - LEGAL PROCEEDINGS

The  Company  is  subject  to legal  proceedings  and  claims  that arise in the
ordinary  course of  business.  Management  does not believe that the outcome of
these matters will have a material adverse effect on the Company's  consolidated
financial position,  operating results, or cash flows. However,  there can be no
assurance that such legal proceedings will not have a material impact.

In September of 2005, A.J. Gilson, a former sales representative of UPG filed an
action in the District  Court of Dallas  County,  Texas  against UPG and Zunicom
claiming  damages  for  breach of  contract  in the amount of  $430,722  and all
reasonable and necessary  attorney fees. In relation to this matter, the Company
is defending  itself and considers the claim without merit.  Management does not
expect the final  resolution of this claim to have a material  adverse effect on
our  financial  position.  However,  depending  on the  amount  and timing of an
unfavorable  resolution of claim against the Company, or the costs of settlement
or litigation, the Company's future results of operations or cash flows could be
materially adversely affected.









                                       15
<PAGE>
NOTE I - COMMITTMENTS

NOTE GUARANTEE

The Company had been a guarantor  of a line of credit owed by UPG to a financial
institution.  The line of credit is secured  by the  assets of UPG.  At July 31,
2007,  the  Company  signed  a   subordination   agreement  with  the  financial
institution  whereby the Company agreed to subordinate its notes from UPG to the
loan  owed  by  UPG to the  financial  institution.  The  agreement  contains  a
provision  under which UPG may pay interest and principal to the Company as they
become due. In return, the financial  institution  released the Company from its
guarantee.

LEASES

During  the  second  quarter of 2007,  AlphaNet  moved into new office  space in
Toronto,  reducing its occupancy  cost. The lease commenced on March 1, 2007 and
will end on April  30,  2009.  AlphaNet  leases  certain  equipment  located  at
customer sites as part of its Office(TM)  product.  The following table presents
the Company's commitments on those leases.

------------- ---------- ---------- ---------- -------- -----------
    Lease        2007       2008       2009      2010      Total
    -----        ----       ----       ----      ----      -----
------------- ---------- ---------- ---------- -------- -----------
Office Space  $  20,802  $  83,208  $  27,736  $     -  $  131,746
------------- ---------  ---------  ---------  -------  ----------
Equipment        17,078     40,987      7,494      175      65,734
------------- ---------  ---------  ---------  -------  ----------

Total         $  37,880  $ 124,195  $  35,230  $   175  $  197,480
------------- ---------  ---------  ---------  -------  ----------

























                                       16
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The  following  discussion  and  analysis  should  be read in  conjunction  with
Zunicom's Unaudited  Consolidated Interim Financial Statements and notes thereto
included  elsewhere  in this Form 10-Q.  Except for the  historical  information
contained  herein,  the  discussion in this Form 10-Q contains  certain  forward
looking statements that involve risks and  uncertainties,  such as statements of
Zunicom's  plans,  objectives,   expectations  and  intentions.  The  cautionary
statements  made in this Form 10-Q  should  be read as being  applicable  to all
related forward-looking statements wherever they appear in this Form 10-Q. These
statements  include,  without  limitation,  statements  concerning the potential
operations and results of the Company described below.  Zunicom's actual results
could differ  materially from those discussed here.  Factors that could cause or
contribute  to such  differences  include,  without  limitation,  those  factors
discussed  herein and in Zunicom's Annual Report on Form 10-K for the year ended
December 31, 2006.


RESULTS OF OPERATIONS

Currently,    the   operations   of   Zunicom   are   conducted    through   its
wholly-ownedsubsidiary, AlphaNet.


THREE MONTHS ENDED  SEPTEMBER 30, 2007 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 2006

REVENUES

For the three month period ended  September 30, 2007,  Zunicom had  consolidated
revenues  of  $360,272  compared  to  $24,184,727  for the same period in 2006,a
decrease of  $23,824,455  or 98.5%.  Effective  with UPG's IPO in December 2006,
UPG's financial results are no longer consolidated with those of Zunicom. Of the
$23,824,455   decrease  in  revenue,   $23,770,977   or  99.8%  is  due  to  the
deconsolidation of UPG.

AlphaNet had revenues of $360,272 for the three month period ended September 30,
2007, compared to revenues of $413,750 for the same period in 2006, a decreaseof
$53,478,  or 12.9%.  Of the $53,478  decrease in revenue,  $14,398 is due to the
continuing  decline  of the  InnFax(TM)  product  driven by the  competition  of
in-room internet  service.  The remaining $39,080 of the revenue decrease is due
principally  to a decline in the number of new  installations  of the Office(TM)
product and decreased renewals.

COST OF REVENUES

For the three month period ended September 30, 2007, Zunicom's consolidated cost
of revenues was  $117,532  compared to cost of revenues of  $20,406,636  for the
same period in 2006, a decrease of $20,289,104 or 99.4%.

Of  the  total  decrease  in  cost  of  revenues,  $20,296,480  is  due  to  the
deconsolidation  of UPG.  The  remaining  increase  in the cost of  revenues  of
$7,376 is due  primarily to increased  supplies  and  maintenance  costs for the
InnFax(TM) equipment which is aging.


                                       17
<PAGE>
AlphaNet's  InnFax(TM)  product  continues to decline as  contracts  continue to
expire and AlphaNet is no longer marketing or installing the InnFax product.

OPERATING EXPENSES

For the three month period ended  September  30,  2007,  Zunicom's  consolidated
operating expenses,  consisting of selling,  general and administrative expenses
and  depreciation  and  amortization  of property  and  equipment  decreased  to
$401,819  compared  to  $2,808,519  for the same  period in 2006,  a decrease of
$2,406,700 or 85.7%.

Of  the  total  decrease  in  operating  expenses,  $2,410,155  is  due  to  the
deconsolidation of UPG. The remainder is an increase of $3,455 due to a decrease
in  operating  expenses of AlphaNet of $17,839  offset by increases in Zunicom's
expenses of $21,294.

AlphaNet's  selling,  general and  administrative  expenses  for the three month
period ending September 30, 2007 were $269,564 compared to $287,403 for the same
period in 2006,  a decrease  of  $17,839  or 6.2%.  The  decrease  is  primarily
attributable to decreased  occupancy costs due to the reduction in rent achieved
through the relocation of the Toronto office in the second quarter of 2007.

Zunicom's  selling,  general  and  administrative  expenses  for the three month
period ending September 30, 2007 were $132,255 compared to $110,961 for the same
period in 2006,  representing  an increase of $21,294 or 19.2%.  The increase is
primarily  attributable to increased legal fees,  consulting fees and accounting
fees in connection with its on-going  operations  after the  deconsolidation  of
UPG.

For the  three-month  period  ended  September  30, 2007,  the Company  recorded
$32,213 in depreciation  and  amortization  expense compared to $70,234 in 2006.
The decrease is principally due to the deconsolidation of UPG.

OTHER INCOME / EXPENSE

Zunicom's  consolidated  interest income (expense) represents income of $91,441
for the three month period ended  September  30, 2007  compared to an expense of
$194,104  for the same  period in 2006,  an overall  net  increase  in income of
$285,545.  The increase is due to the deconsolidation of UPG and the elimination
of borrowings under the UPG line of credit from Zunicom's consolidated financial
results offset by interest income from notes receivable from UPG.

Equity in earnings of investee of $272,892  represents  Zunicom's share of UPG's
net income for the  three-month  period ended  September 30, 2007 and changes in
equity of UPG, both recorded in accordance  with the equity method of accounting
for an unconsolidated investee.

NINE MONTHS ENDED SEPTEMBER 30, 2007 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2006

REVENUE

For the nine-month  period ended  September 30, 2007,  Zunicom had  consolidated
revenues of $1,161,152  compared to  $69,338,659  for the same period in 2006, a
decrease of  $68,177,507  or 98.3%.  Effective  with UPG's IPO in December 2006,


                                       18
<PAGE>
UPG's financial results are no longer consolidated with those of Zunicom. Of the
$68,177,507   decrease  in  revenue,   $68,016,953   or  99.8%  is  due  to  the
deconsolidation of UPG.

AlphaNet had revenues of $1,161,152  for the nine-month  period ended  September
30,  2007,  compared to revenues of  $1,321,706  for the same period in 2006,  a
decrease of $160,554,  or 12.1%. Of the $160,554 decrease in  revenue,$58,167 is
due  to  the  continuing  decline  of  the  InnFax(TM)  product  driven  by  the
competition of in-room internet service.  The remaining  $102,387 of the revenue
decrease is due principally to a decline in the number of new  installations  of
the Office(TM) product and decreased renewals.

COST OF REVENUES

For the nine-month period ended September 30, 2007, Zunicom's  consolidated cost
of revenues is $338,324 compared to cost of revenues of $58,739,076 for the same
period in 2006, a decrease of $58,400,752 or 99.4%.

Of  the  total  decrease  in  cost  of  revenues,  $58,342,648  is  due  to  the
deconsolidation  of UPG.  The  remaining  decrease  in the cost of  revenues  of
$58,104 is due a reduction  in  servicing  costs due to  AlphaNet's  decrease in
revenues.

The direct servicing costs of AlphaNet's  InnFax(TM) product continue to decline
as  contracts  continue  to  expire  and  AlphaNet  is no  longer  marketing  or
installing  the InnFax  product.  In addition,  direct  servicing  costs for the
Office(TM)  product  also  declined  principally  in the  areas of  repairs  and
maintenance,  installation  costs and licensing  consistent with the decrease in
new installations.

OPERATING EXPENSES

For the  nine-month  period ended  September  30, 2007,  Zunicom's  consolidated
operating expenses,  consisting of selling,  general and administrative expenses
and  depreciation  and  amortization  of property and equipment were  $1,419,924
compared to $8,140,369  for the same period in 2006, a decrease of $6,720,445 or
82.6%.  Of the total  decrease in operating  expenses,  $6,747,971 is due to the
deconsolidation  of UPG.  The  remainder  is an  increase  of  $27,526  due to a
decrease in  operating  expenses of AlphaNet of $143,929  offset by increases in
Zunicom's expenses of $171,455.

AlphaNet's  selling,  general and  administrative  expenses  for the  nine-month
period ending  September 30, 2007 were $858,505  compared to $1,002,434  for the
same period in 2006, a decrease of $143,929 or 14.4%.  The decrease is primarily
attributable to decreased employment costs due to the reduction of one position,
decreased  occupancy  costs resulting from the relocation of the Toronto office,
and decreased travel expenses.

Zunicom's selling, general and administrative expenses for the nine-month period
ending September 30, 2007 were $561,419 compared to $389,964 for the same period
in 2006,  representing  an  increase  of  $171,455  or 44.0%.  The  increase  is
primarily  attributable to increased legal fees,  consulting fees and accounting
fees in connection with its on-going  operations  after the  deconsolidation  of
UPG.



                                       19
<PAGE>
For the nine-month period ended September 30, 2007, the Company recorded $97,378
in  depreciation  and  amortization  expense  compared to $223,325 in 2006.  The
decrease is principally due to the deconsolidation of UPG.

OTHER INCOME (EXPENSE)

Zunicom's  consolidated  interest income (expense) represents income of $350,178
for the  nine-month  period ended  September  30, 2007 compared to an expense of
$605,325  for the same  period in 2006,  an overall  net  increase  in income of
$955,503.  The increase is due to the deconsolidation of UPG and the elimination
of borrowings under the UPG line of credit from Zunicom's consolidated financial
results offset by interest income from notes receivable from UPG.

Equity in earnings of investee of $713,041  and gain on equity  transactions  of
investee of $18,725, respectively, represents Zunicom's share of UPG's net
income for the nine-month  period ended September 30, 2007 and changes in equity
of UPG, both recorded in accordance  with the equity method of accounting for an
unconsolidated investee.

As a  result  of the  deconsolidation  of UPG,  the  Company  is left  with  one
consolidated subsidiary,  AlphaNet. The Company does not expect to engage in any
future transactions in the nature of the UPG transaction.

LIQUIDITY

Zunicom,  on a consolidated  basis, had cash and cash equivalents of $529,101 at
September 30, 2007.

Net cash  used in  operations  was  $731,270  for the  nine-month  period  ended
September  30,  2007.  The  cash  used  in  operating  activities  is  primarily
attributable  to net  profit of  $467,620,  plus  $97,378  in  depreciation  and
amortization,  $52,649 in stock  based  compensation  and a decrease in accounts
receivable  and  inventory  of  $14,739,  offset by equity in earnings of UPG of
$713,041,  gain on equity  transactions of UPG of $18,725,  decreases in prepaid
expenses  and other  assets of  $6,284,  decreases  in  accrued  liabilities  of
$219,780, accounts payable of $27,069, payable to related party of $186,619, and
an increase in deferred stock compensation of $192,138.

Net cash used by investing  activities for the nine-month period ended September
30, 2007, relating to purchases of property and equipment was $38,354.

Net cash used in financing  activities for the nine-month period ended September
30, 2007 was $6,960,984  representing payment of a cash dividend $0.80 per share
on the Company's  common stock and the issuance of 996,940  shares of restricted
common stock to certain officers and employees of Zunicom and UPG.

Zunicom's  primary  sources  of cash in 2007  will  be from  the  operations  of
AlphaNet  and the  interest  income on the notes  receivable  from UPG.  Zunicom
believes that the cash  generated  from those sources will be sufficient to meet
its operational needs over the next year.







                                       20
<PAGE>
The Company's future lease commitments are as follows:
------------- ---------- ---------- ---------- -------- -----------
    Lease        2007       2008       2009      2010      Total
    -----        ----       ----       ----      ----      -----
------------- ---------- ---------- ---------- -------- -----------
Office Space  $  20,802  $  83,208  $  27,736  $     -  $  131,746
------------- ---------  ---------  ---------  -------  ----------
Equipment        17,078     40,987      7,494      175      65,734
------------- ---------  ---------  ---------  -------  ----------

Total         $  37,880  $ 124,195  $  35,230  $   175  $  197,480
------------- ---------  ---------  ---------  -------  ----------


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange

Our customers  are primarily  located in the U.S. and a few customers in Canada.
Our exchange rate risk between the US and Canadian  dollar is minimal because we
conduct so little business in Canada.  In addition,  the aggregate impact of any
likely exchange rate fluctuations  would be immaterial as most payments are made
in U.S.  dollars.  We have not used derivative  instruments to hedge our foreign
exchange risks though we may choose to do so in the future.

Interest Rates

We currently  have no direct  borrowings and therefore are not exposed to market
rate risk for changes in interest rates other than through our guaranty of UPG's
line of credit. That guarantee was removed as of July 31, 2007. In addition, our
notes receivable from UPG are at fixed rates of interest.

ITEM 4. CONTROLS AND PROCEDURES

The Company's  management,  including the Company's  principal executive officer
and  principal  financial  officer,  has  evaluated  the  effectiveness  of  the
Company's  disclosure controls and procedures (as defined in Rules 13(a) - 15(e)
and 15(d) - 15(e)  under  the  Securities  Exchange  Act of 1934) as of the nine
months ended  September 30, 2007.   Based upon that  evaluation,  the  Company's
principal executive officer and  principal financial officer have concluded that
the disclosure controls and  procedures  were effective as of September 30, 2007
to insure that the information  required  to be  disclosed  by us in the reports
filed or submitted by us under the  Securities Exchange Act of 1934, as amended,
was  recorded,  processed,  summarized  or  reported  within  the  time  periods
specified in the rules and regulations  of the SEC,  and included  controls  and
procedures designed to ensure that information required to be disclosed by us in
such  reports  was  accumulated  and  communicated to management,  including our
principal executive officer and principal financial officer,  as appropriate  to
allow timely decisions regarding required disclosures.

There were no changes in the Company's internal control over financial reporting
that occurred  during the  Company's  last fiscal  quarter that have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.



                                       21
<PAGE>
PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

In September of 2005, A.J. Gilson, a former sales representative of UPG filed an
action in the District  Court of Dallas  County,  Texas  against UPG and Zunicom
claiming  damages  for  breach of  contract  in the amount of  $430,722  and all
reasonable and necessary  attorney fees. In relation to this matter, the Company
is defending  itself and considers the claim without merit.  Management does not
expect the final  resolution of this claim to have a material  adverse effect on
our  financial  position.  However,  depending  on the  amount  and timing of an
unfavorable  resolution of claim against the Company, or the costs of settlement
or litigation, the Company's future results of operations or cash flows could be
materially adversely affected.

Item 6. Exhibits.

a.   The  following  exhibits  are filed as part of this report or  incorporated
     herein as indicated.

     3.1 Articles of Incorporation, as amended (incorporated by reference to the
     Company's   Registration  Statement  on  Form  SB-2,  Commission  File  No.
     33-98662,  filed on  October  30,  1995 and  amended on January 5, 1996 and
     January 23, 1996).

     3.2 Certificate of Designation  (incorporated by reference to the Company's
     Registration Statement on Form SB-2, Commission File No. 33-98662, filed on
     October 30, 1995 and amended on January 5, 1996 and January 23, 1996).

     3.2A Amended  Certificate of Designation  (incorporated by reference to the
     Company's Registration Statement on Form SB-2, Commission File No.33-98662,
     filed on October  30,  1995 and  amended on January 5, 1996 and January 23,
     1996).

     3.3  Bylaws  (incorporated  by  reference  to  the  Company's  Registration
     Statement on Form SB-2, Commission File No. 33-98662,  filed on October 30,
     1995 and amended on January 5, 1996 and January 23, 1996).

     31.1 Certification related to Quarterly Report Form 10-Q disclosures.

     31.2 Certification related to Quarterly Report Form 10-Q disclosures

     32.1  Certification  pursuant to Rule  13a-14(b) of the Exchange Act and 18
     U.S.C.   Section  1350,   as  enacted   pursuant  to  Section  906  of  the
     Sarbanes-Oxley Act of 2003.

     32.2  Certification  pursuant to Rule  13a-14(b) of the Exchange Act and 18
     U.S.C.   Section  1350,   as  enacted   pursuant  to  Section  906  of  the
     Sarbanes-Oxley Act of 2003.








                                       22
<PAGE>
                                    Signature
                                    ---------

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.



                                       Zunicom, Inc.
                                       -----------------------------
                                       (Registrant)

Date:  November 12, 2007               /s/ John C. Rudy
                                       --------------------------------
                                       John C. Rudy
                                       Chief Financial Officer
                                       (principal financial officer)







































                                       23