UNITED STATES
                       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 June 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 August 10, 2007, 9,949,752 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 June 30, 2007
And Audited Consolidated Balance Sheet at  December 31, 2006. . . .   4

Unaudited Consolidated Statements of Operations for the three
and six months ended June 30, 2007 and 2006 . . . . . . . . . . . .   6

Unaudited Consolidated Statements of Cash Flows for the six
months ended June 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. . . . . . . . . . . . . . . . . 16

Item 3.  Quantitative and Qualitative Disclosures About Market Risk. 20

Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . . .  20


PART II - Other Information

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . .   21

Item 6.  Exhibits. . . . . . . . . . . . . . . . . . . . . . . . .   21

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22

Certifications




















                                       3
<PAGE>
PART  I  -  FINANCIAL  INFORMATION
----------------------------------
Item  1.  Financial  Statements

                          ZUNICOM, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                     June 30,     December 31,
                                                       2007            2006
                                                       ----            ----
                                                    (Unaudited)
CURRENT ASSETS
 Cash and cash equivalents                         $     568,460  $   8,259,709
 Accounts receivable - trade, net of
  allowance for doubtful accounts of
  $4,889 and $4,889                                       16,417         23,232
 Interest receivable from unconsolidated investee          9,616         10,578
 Inventories - finished goods                             15,824         20,142
 Prepaid expenses and other current assets                90,416         70,426
                                                   -------------  -------------
     Total current assets                                700,733      8,384,087

PROPERTY AND EQUIPMENT
 Business center equipment                               934,796        972,832
 Machinery and equipment                                  98,606         24,870
 Computer equipment                                      141,123        145,454
 Furniture and fixtures                                   19,658         33,298
 Leasehold improvements                                  122,365        122,365
                                                   -------------  -------------
                                                       1,316,548      1,298,819

 Less accumulated depreciation and amortization       (1,138,424)    (1,073,259)
                                                   -------------  -------------
     Net property and equipment                          178,124        225,560
                                                   -------------  -------------
NOTES RECEIVABLE FROM UNCONSOLIDATED INVESTEE          5,850,000      5,850,000

INVESTMENT IN UNCONSOLIDATED INVESTEE                  6,961,649      6,125,383
                                                   -------------  -------------
TOTAL ASSETS                                       $  13,690,506  $  20,585,030
                                                   =============  =============





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








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

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                     June 30,     December 31,
                                                       2007            2006
                                                       ----            ----
                                                    (Unaudited)
CURRENT LIABILITIES
 Accounts payable                                  $     231,309  $     237,310
 Accrued liabilities                                     162,615        395,633
 Due to unconsolidated investee                                -        186,619
                                                   -------------  -------------
    Total current liabilities                            393,924        819,562

NON-CURRENT DEFERRED TAX LIABILITY                     3,824,222      3,824,222

TOTAL LIABILITIES                                      4,218,146      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;
  9,949,752 and 8,891,394 shares
  issued and out-standing                                 99,497         88,914
 Deferred Compensation                                  (205,097)
 Additional paid-in capital                            9,262,901     14,818,893
 Retained earnings                                       253,071        946,451
                                                   -------------  -------------
    Total stockholders' equity                         9,472,360     15,941,246
                                                   -------------  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $  13,690,506  $  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 six months ended June
                             --------------------------  -----------------------------
                                       June 30,                    June 30,
                                       --------                    --------
                                  2007          2006          2007          2006
                                  ----          ----          ----          ----
REVENUES
 Sales                       $          -  $ 23,505,352 $           -  $ 44,245,976
 Service revenue                  415,028       451,359       800,880       907,956
                             ------------  ------------ -------------  ------------
                                  415,028    23,956,711       800,880    45,153,932
COST OF REVENUES
 Cost of goods sold                     -    20,236,163             -    38,046,168
 Direct servicing costs           110,226       145,782       220,792       286,272
                             ------------  ------------ -------------  ------------
                                  110,226    20,381,945       220,792    38,332,440
                             ------------  ------------ -------------  ------------

GROSS PROFIT                      304,802     3,574,766       580,088     6,821,492

OPERATING EXPENSES
 Selling, general and
  administrative                  509,020     2,662,620       952,940     5,178,759
Depreciation and
  amortization of property
  and equipment                    31,997        77,264        65,165       153,091
                             ------------  ------------ -------------  ------------
                                  541,017     2,739,884     1,018,105     5,331,850
                             ------------  ------------ -------------  ------------

INCOME (LOSS) FROM OPERATIONS    (236,215)      834,882      (438,017)    1,489,642

OTHER INCOME (EXPENSES)
 Interest income (expense)
  net, including $101,117,
  $0,$258,737, and $8,293
  from related parties            101,117      (221,448)      258,737      (411,221)
 Equity in earnings of
  investee                        292,965                     440,149             -
 Gain on equity transactions
  of investee                         210                      18,725             -
 Other, net                        (3,530)        7,332       (12,440)        3,430
                             ------------  ------------  ------------  ------------

                                  390,762      (214,116)      705,171      (407,791)
                             ------------  ------------  ------------  ------------
INCOME BEFORE PROVISION
  FOR INCOME TAXES                154,547       620,766       267,154     1,081,851


</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 six months ended June
                             --------------------------  -----------------------------
                                       June 30,                    June 30,
                                       --------                    --------
                                  2007          2006          2007          2006
                                  ----          ----          ----          ----
PROVISION FOR INCOME TAXES              -             -             -             -
                             ------------  ------------  ------------  ------------
NET INCOME                   $    154,547  $    620,766       267,154  $  1,081,851
                             ============  ============  ============  ============
Net income attributable
 to common stockholders      $    148,998     $ 613,118  $    253,094  $  1,065,396
                             ============  ============  ============  ============
Net income per share
 attributable to common
 stockholders
    Basic                    $       0.02  $       0.07  $       0.03  $       0.12
                             ============  ============  ============  ============
    Diluted                  $       0.02  $       0.06  $       0.03  $       0.11
                             ============  ============  ============  ============
Cash dividends per share     $          -  $          -  $       0.80  $          -
                             ============  ============  ============  ============
Number of weighted average
 shares of common stock
 outstanding
    Basic                       9,005,383     8,873,836     8,952,796     8,796,784
                             ============  ============  ============  ============
    Diluted                     9,129,359     9,486,343     9,112,884     9,616,341
                             ============  ============  ============  ============
</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 Six Months Ended June 30, 2007 and 2006

                                                          2007         2006
                                                          ----         ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                           $    267,154  $  1,081,851
Adjustments to reconcile net income
to net cash used in operating  activities:
  Depreciation and amortization of
    property and equipment                                 65,165       153,091
  Provision for bad debts                                       -       117,773
  Provision for obsolete inventory                              -        90,000
  Write off of property and equipment                           -         6,913
  Gain on equity transactions of investee                 (18,725)            -
  Equity in earnings of investee                         (440,149)            -
  Non-cash stock-based compensation                        39,690             -
  Change in operating assets and liabilities:
     Accounts receivable - trade                            6,815    (1,465,839)
     Interest receivable from unconsolidated investee         962       (31,592)
     Inventories                                            4,318     1,980,916
     Prepaid expenses and other current assets            (19,989)      230,387
     Other assets                                               -         1,850
     Accounts payable                                      (6,001)   (4,940,708)
     Accrued liabilities                                 (233,019)      489,250
     Deferred rent                                              -       (10,004)
     Due to investee                                     (186,619)            -
                                                     ------------  ------------
Net cash used in operating activities                    (520,398)   (2,297,962)
                                                     ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                      (17,729)     (144,282)
                                                     ------------  ------------
Net cash used in investing activities                     (17,729)     (144,282)

CASH FLOWS FROM FINANCING ACTIVITIES
  Net activity on line of credit                                -     3,412,528
  Proceeds from exercise of warrants                            -       182,500
  Repayment of notes payable - related party                    -      (217,128)
  Repayment of long-term debt                                   -       (10,339)
  Dividends paid on common stock                       (7,153,122)            -
                                                     ------------  ------------
Net cash provided (used in) by financing activities    (7,153,122)    3,367,561
                                                     ------------  ------------




            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 Six Months Ended June 30, 2007 and 2006 (continued)

                                                          2007         2006
                                                          ----         ----

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (7,691,249)      925,317

Cash and cash equivalents at beginning of period        8,259,709       731,626
                                                     ------------  ------------
Cash and cash equivalents at end of period           $    568,460  $  1,656,943
                                                     ============  ============
SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid                                        $         99  $    411,221
                                                     ============  ============
Income taxes paid                                    $    230,000  $          -
                                                     ============  ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
    AND FINANCING ACTIVITIES

     Dividends paid through issuance of common stock $     14,060  $     16,455
                                                     ============  ============
     Conversion of preferred stock to common stock   $     25,000  $          -
                                                     ============  ============
Issuance of restricted stock as deferred
    Compensation                                     $    205,801  $          -
                                                     ============  ============

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 six month period  ended June 30,  2007.  The results for the
three  month  and six  month  period  ended  June 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 June 30, 2007.

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.

                                       10
<PAGE>
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 June 30, 2007 was
$704 which  relates to the  restricted  stock  issued as deferred  compensation.
Stock  based  compensation  for the  six-months  ended June 30, 2007 was $39,690
which represents $38,986 for stock options granted in February 2007 and $704 for
the restricted stock compensation.  The Company had no stock-based  compensation
for the six month  period  ended June 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 six months  ended June 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 six months ended June 30, 2007:

                                                       For the six Months Ended
                                                             June 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.

                                       11
<PAGE>
   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 June 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%.

The following table  summarizes stock options  outstanding  under the 1999 Stock
Option Plan at June 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 June 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 June 30, 2007, all outstanding options were fully vested.

                                       12
<PAGE>
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.

NOTE D - NET INCOME PER SHARE

Basic net income per share is computed by dividing  net income  decreased by the
preferred  stock  dividends of $14,060 and $16,455 for the six months ended June
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.

For the three and six month period ended June 30, 2007,  the dilutive  effect of
425,000  options has not been included in the computation of dilutive net income
per share.  The  options are "out of the money,"  i.e.  the market  price of the
stock is below the  strike  price of the  options.  For the three  month  period
ending June 30, 2006, the dilutive  effects of 438,531 stock options and 173,976
common shares  issuable upon  conversion of preferred  stock are included in the
diluted net income per share  calculation.  For the six month period ending June
30, 2006,  the dilutive  effect of 645,581  stock options and other common stock
equivalents  and 173,976 common shares  issuable upon  conversion of outstanding
preferred stock are included in the diluted net income per share calculation.

                                       13
<PAGE>
NOTE E - UNCONSOLIDATED SUBSIDIARY - INVESTEE

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

                             --------------- ---------------
                              Three Months     Six Months
                                  Ended           Ended
                             --------------- ---------------
                              June 30, 2007   June 30, 2007
                             --------------- ---------------
                                $ in 000's     $ in 000's
                             --------------- ---------------
---------------------------- ------- ------- ------- -------
Net revenue                  26,403  23,504  49,943  44,245
---------------------------- ------  ------  ------  ------

Cost of revenue              22,258  20,236  42,357  38,046
---------------------------- ------  ------  ------  ------
Gross profit                  4,145   3,268   7,586   6,199
---------------------------- ------  ------  ------  ------
Operating expenses            2,699   2,391   5,336   4,566
---------------------------- ------  ------  ------  ------
Income from operations        1,446     877   2,250   1,633
---------------------------- ------  ------  ------  ------
Interest expense                365     221     732     403
---------------------------- ------  ------  ------  ------
Other income                    167       8     340       9
---------------------------- ------  ------  ------  ------
Income from operations
before income tax provision   1,248     664   1,858   1,239
---------------------------- ------  ------  ------  ------
Income tax provision           (514)   (288)   (756)   (525)
---------------------------- ------  ------  ------  ------
Net income                      734     376   1,102     714
============================ ======  ======  ======  ======

At June 30,  2007 the  carrying  value of the  Company's  investment  in UPG was
$6,961,649.  The market value of the 2,000,000  shares of UPG's common stock the
Company owns was  approximately  $9,200,000 based on the closing price per share
at June 29, 2007 of $4.60. At June 30, 2007, UPG had total assets of $52,209,748
and total liabilities of $35,747,813.


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.


                                       14
<PAGE>
NOTE G - SHAREHOLDERS' EQUITY

During the six months ended June 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 six months ended June 30, 2007, the Company paid dividends of $14,060
on the class A  Preferred  Stock  through the  issuance of 11,418  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.

NOTE I - COMMITTMENTS

NOTE GUARANTEE

As of June 30, 2007, the Company was a guarantor of a line of credit owed by UPG
to a financial institution. 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.



                                       15
<PAGE>
------------- ---------- ---------- ---------- -------- -----------
    Lease        2007       2008       2009      2010      Total
    -----        ----       ----       ----      ----      -----
------------- ---------- ---------- ---------- -------- -----------
Office Space  $  41,604  $  83,208  $  27,736  $     -  $  152,548
------------- ---------  ---------  ---------  -------  ----------
Equipment        34,869     40,987      7,494      175      83,525
------------- ---------  ---------  ---------  -------  ----------

Total         $  76,473  $ 124,195  $  35,230  $   175  $  236,073
------------- ---------  ---------  ---------  -------  ----------


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-owned
subsidiary, AlphaNet.


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

REVENUES

For the three  month  period  ended  June 30,  2007,  Zunicom  had  consolidated
revenues of  $415,028  compared to  $23,956,711  for the same period in 2006,  a
decrease of  $23,541,683  or 98.3%.  Effective  with UPG's IPO in December 2006,
UPG's financial results are no longer consolidated with those of Zunicom. Of the
$23,541,683   decrease  in  revenue,   $23,505,352   or  99.8%  is  due  to  the
deconsolidation of UPG.

AlphaNet  had  revenues of $415,028  for the three month  period  ended June 30,
2007,  compared to revenues of $451,359  for the same period in 2006, a decrease
of $36,331,  or 8.0%. Of the $36,331 decrease in revenue,  $10,200 is due to the
continuing  decline  of the  InnFax(TM)  product  driven by the  competition  of
in-room internet  service.  The remaining $26,131 of the revenue decrease is due
principally  to a decline in the number of new  installations  of the Office(TM)
product and decreased renewals.

                                       16
<PAGE>
COST OF REVENUES

For the three month period ended June 30, 2007,  Zunicom's  consolidated cost of
revenues is $110,226  compared to cost of revenues of  $20,381,945  for the same
period in 2006, an decrease of $20,271,719 or 99.5%.

Of  the  total  decrease  in  cost  of  revenues,  $20,236,163  is  due  to  the
deconsolidation  of UPG.  The  remaining  decrease  in the cost of  revenues  of
$35,556 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 InFax  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 three month period ended June 30, 2007, Zunicom's consolidated operating
expenses,  consisting  of  selling,  general  and  administrative  expenses  and
depreciation  and  amortization of property and equipment  decreased to $541,017
compared to $2,739,884  for the same period in 2006, a decrease of $2,198,867 or
80.3%.

Of  the  total  decrease  in  operating  expenses,  $2,256,129  is  due  to  the
deconsolidation  of UPG.  The  remainder  is an  increase  of  $57,262  due to a
decrease in  operating  expenses of AlphaNet of $32,727  offset by  increases in
Zunicom's expenses of $89,989.

AlphaNet's  selling,  general and  administrative  expenses  for the three month
period  ending June 30,  2007 were  $265,572  compared to $298,299  for the same
period in 2006,  a decrease  of  $32,727 or 11.0%.  The  decrease  is  primarily
attributable to decreased employment costs due to the reduction of one position,
decreased equipment costs and decreased travel expenses.

Zunicom's  selling,  general  and  administrative  expenses  for the three month
period  ending June 30,  2007 were  $243,448  compared to $149,410  for the same
period in 2006,  representing  an increase of $94,038 or 63.0%.  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.

For the three-month  period ended June 30, 2007, the Company recorded $31,997 in
depreciation and amortization  expense compared to $77,264 in 2006. The decrease
is principally due to the deconsolidation of UPG.

OTHER INCOME / EXPENSE

Zunicom's  consolidated  interest income (expense) represents income of $101,117
for the three  month  period  ended  June 30,  2007  compared  to an  expense of
$221,448  for the same  period in 2006,  an overall  net  increase  in income of
$322,565.  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.

                                       17
<PAGE>
Equity in earnings of investee of $292,965  and gain on equity  transactions  of
investee of $210,  respectively,  represents Zunicom's share of UPG's net income
for the three  month  period  ended June 30,  2007 and changes in equity of UPG,
both  recorded  in  accordance  with the  equity  method  of  accounting  for an
unconsolidated investee.

SIX MONTHS ENDED JUNE 30, 2007 COMPARED TO SIX MONTHS ENDED JUNE 30, 2006

REVENUE

For the six-month period ended June 30, 2007, Zunicom had consolidated  revenues
of $800,880  compared to $45,153,932  for the same period in 2006, a decrease of
$44,353,052 or 98.2%. Effective with UPG's IPO in December 2006, UPG's financial
results are no longer  consolidated  with those of Zunicom.  Of the  $44,353,052
decrease in revenue, $44,245,976 or 99.8% is due to the deconsolidation of UPG.

AlphaNet  had revenues of $800,880 for the six month period ended June 30, 2007,
compared  to revenues  of  $907,956  for the same period in 2006,  a decrease of
$107,076,  or 11.8%. Of the $107,076 decrease in revenue,  $43,769 is due to the
continuing  decline  of the  InnFax(TM)  product  driven by the  competition  of
in-room internet  service.  The remaining $63,307 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 six month  period ended June 30, 2007,  Zunicom's  consolidated  cost of
revenues is $220,792  compared to cost of revenues of  $38,332,440  for the same
period in 2006, an decrease of $38,111,648 or 99.4%.

Of  the  total  decrease  in  cost  of  revenues,  $38,046,168  is  due  to  the
deconsolidation  of UPG.  The  remaining  decrease  in the cost of  revenues  of
$65,480 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 InFax  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 six month period ended June 30, 2007, Zunicom's  consolidated  operating
expenses,  consisting  of  selling,  general  and  administrative  expenses  and
depreciation and amortization of property and equipment  decreased to $1,018,105
compared to $5,331,850  for the same period in 2006, a decrease of $4,313,745 or
80.9%.

Of  the  total  decrease  in  operating  expenses,  $4,327,391  is  due  to  the
deconsolidation  of UPG.  The  remainder  is an  increase  of  $13,646  due to a
decrease in  operating  expenses of AlphaNet of $124,052  offset by increases in
Zunicom's expenses of $137,698.



                                       18
<PAGE>
AlphaNet's selling, general and administrative expenses for the six month period
ending June 30, 2007 were  $524,467  compared to $639,319 for the same period in
2006, a decrease of $114,852 or 18.0%. The decrease is primarily attributable to
decreased  employment  costs due to the  reduction  of one  position,  decreased
equipment costs and decreased travel expenses.

Zunicom's selling,  general and administrative expenses for the six month period
ending June 30, 2007 were  $428,473  compared to $278,745 for the same period in
2006,  representing an increase of $149,728 or 53.7%.  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 six-month  period ended June 30, 2007, the Company  recorded  $65,165 in
depreciation and amortization expense compared to $153,091 in 2006. The decrease
is principally due to the deconsolidation of UPG.

OTHER INCOME (EXPENSE)

Zunicom's  consolidated  interest income (expense) represents income of $258,737
for the six month period ended June 30, 2007  compared to an expense of $411,221
for the same period in 2006, an overall net increase in income of $669,958.  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 $440,149  and gain on equity  transactions  of
investee  of  $18,725,  respectively,  represents  Zunicom's  share of UPG's net
income for the six month  period  ended June 30,  2007 and  changes in equity of
UPG,  both recorded in  accordance  with the equity method of accounting  for an
unconsolidated  investee.


LIQUIDITY

Zunicom,  on a consolidated  basis, had cash and cash equivalents of $568,460 at
June 30, 2007.

Net cash used in operations was $520,398 for the six-month period ended June 30,
2007.  The cash used in operating  activities is primarily  attributable  to net
income of $267,154,  plus $65,165 in depreciation and  amortization,  $39,690 in
stock based compensation and a decrease in accounts  receivable and inventory of
$12,095,  offset  by  equity  in  earnings  of UPG of  $440,149,  gain on equity
transactions of UPG of $18,725,  decreases in prepaid  expenses and other assets
of $19,989,  decreases in accrued  liabilities of $233,019,  accounts payable of
$6,001, and payable to related party of $186,619.

Net cash used by investing  activities  for the six-month  period ended June 30,
2007, related to purchases of property and equipment was $17,729.

Net cash used in financing  activities  for the six-month  period ended June 30,
2007 was $7,153,122  representing  payment of a cash dividend of $0.80 per share
on the Company's common stock.





                                       19
<PAGE>
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 meets
its operational needs over the next year.

The Company's future lease commitments are as follows.

------------- ---------- ---------- ---------- -------- -----------
    Lease        2007       2008       2009      2010      Total
    -----        ----       ----       ----      ----      -----
------------- ---------- ---------- ---------- -------- -----------
Office Space  $  41,604  $  83,208  $  27,736  $     -  $  152,548
------------- ---------  ---------  ---------  -------  ----------
Equipment        34,869     40,987      7,494      175      83,525
------------- ---------  ---------  ---------  -------  ----------

Total         $  76,473  $ 124,195  $  35,230  $   175  $  236,073
------------- ---------  ---------  ---------  -------  ----------


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 six
months ended June 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 June 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.


                                       20
<PAGE>
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.



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.

                                       21
<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:  August 13, 2007                    /s/ John C. Rudy
                                       --------------------------------
                                       John C. Rudy
                                       Chief Financial Officer
                                       (principal financial officer)







































                                       22