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, 2009

                                       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  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, a non-accelerated  filer, or a smaller reporting company.
See definitions of "large  accelerated filer,  "accelerated  filer" and "smaller
reporting  company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [
]  Accelerated  filer [ ]  Non-accelerated  filer [ ](Do not  check if a smaller
reporting company) Smaller reporting company [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 October 31, 2009, 9,733,527 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, 2009
and Consolidated Balance Sheet at December 31, 2008. . . . . . . . .   4

Unaudited Consolidated Statements of Operations for the
Three and nine months ended September 30, 2009 and 2008 . . . . . . .  6

Unaudited Consolidated Statements of Cash Flows for the
nine months ended September 30, 2009 and 2008 . . . . . . . . . . . .  8

Notes to Unaudited Consolidated Financial Statements . . . . . . . .   9

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .  20

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.  25

Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . . .   26


PART II - Other Information

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .  26

Item 6.  Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . .  26

Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28

Certifications

















                                        3
<PAGE>
PART  I  -  FINANCIAL  INFORMATION
----------------------------------
Item  1.  Financial  Statements
                                  ZUNICOM, INC.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                            September 30, 2009 December 31,2008
                                                 (unaudited)
                                                -------------- ----------------
CURRENT ASSETS
 Cash and cash equivalents                       $  2,096,159  $   1,522,831
 Accounts receivable - trade, net of
   allowance for doubtful accounts
   of $0 and $0                                         6,457          2,585
 Interest receivable from unconsolidated
   investee                                             6,611         10,578
 Note receivable from unconsolidated
   investee - current portion                       1,462,500      1,462,500
 Inventories - finished goods                           8,394          7,146
 Prepaid expenses and other current assets             61,536         47,463
                                                 ------------  -------------
    Total current assets                            3,641,657      3,053,103

PROPERTY AND EQUIPMENT
 Business center equipment                            374,723        487,321
 Machinery and equipment                              447,506        447,506
 Computer equipment                                   148,007        147,107
 Furniture and fixtures                                30,097         30,097
 Leasehold improvements                                12,377         12,377
                                                 ------------  -------------
    Total property and equipment                    1,012,710      1,124,408

 Less accumulated depreciation and amortization      (987,733)    (1,052,157)
                                                 ------------  -------------
    Net property and equipment                         24,975         72,251
                                                 ------------  -------------
NOTES RECEIVABLE FROM UNCONSOLIDATED INVESTEE       1,133,588      3,656,250

INVESTMENT IN UNCONSOLIDATED INVESTEE               3,195,313      7,916,442
                                                 ------------  -------------
TOTAL ASSETS                                     $  7,995,533  $  14,698,046
                                                 ============  =============











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

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

                      LIABILITIES AND STOCKHOLDERS' EQUITY


                                           September 30, 2009 December 31, 2008
                                                 (unaudited)
                                                -------------- ----------------
CURRENT LIABILITIES
 Accounts payable                                     274,957         333,757
 Accrued liabilities                                   78,388         184,054
                                                 -------------   -------------
    Total current liabilities                         353,345         517,811
                                                -------------   -------------
NON-CURRENT DEFERRED TAX LIABILITY                  1,988,220       4,299,878
                                                -------------   -------------
TOTAL LIABILITIES                                   2,341,565       4,817,689
                                                -------------   -------------
STOCKHOLDERS' EQUITY

Preferred stock - $1.00 par value,  1,000,000
 shares authorized;  60,208 Class A Preferred
 Shares issued and outstanding; liquidation
 preference of $316,092 as of September 30,
 2009 and December 31, 2008                            60,208          60,208
Common stock - $0.01 par value; 50,000,000
  shares authorized; 9,733,527 and
   9,960,756 shares issued and out- standing           97,335          99,607
Additional paid-in capital                          9,089,136       9,181,333
Retained earnings (deficit)                        (3,592,711)        539,209
                                                -------------   -------------
      Total stockholders' equity                    5,653,968       9,880,357
                                                -------------   -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $   7,995,533   $  14,698,046
                                                =============   =============


















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

                                        5
<PAGE>
                                  ZUNICOM, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
        For the Three Months and Nine Months Ended September 30, 2009 and 2008

                           For the three months ended  For the nine months ended
                           -------------------------  -------------------------
                                 September 30,               September 30,
                                   --------                    --------
                              2009          2008          2009          2008
                              ----          ----          ----          ----
REVENUES
Service revenue          $    120,027  $    241,211 $     428,181  $    771,347
                         ------------  ------------ -------------  ------------
COST OF REVENUES
Direct servicing costs         37,991        79,949       108,235       240,874
                         ------------  ------------ -------------  ------------
GROSS PROFIT                   82,036       161,262       319,946       530,473

OPERATING EXPENSES
 Selling, general and
  administrative              259,571       307,879       866,807     1,141,905
Depreciation and
  amortization of property
  and equipment                 8,396        23,417        36,510        77,059
                         ------------  ------------ -------------  ------------
                              267,967       331,296       903,317     1,218,964
                         ------------  ------------ -------------  ------------
LOSS FROM OPERATIONS         (185,931)     (170,034)     (583,371)     (688,491)

OTHER INCOME (EXPENSES)
 Interest income (expense)
  net, including $66,353,
  $88,470 ,$209,818, and
  $350,640 from related
  parties                      67,415        90,823       212,951       270,346
Equity (loss) in earnings
  of investee                 241,287       151,137      (240,713)      543,218
Gain on equity
  transactions of investee         --         2,102                      21,372
Loss on impairment                 --            --    (5,793,679)           --
Other, net                     (5,250)      (10,099)      (21,886)      642,150
                         ------------  ------------  ------------  ------------
                              303,452       233,963    (5,843,327)    1,477,086
                         ------------  ------------  ------------  ------------
INCOME (LOSS) BEFORE PROVISION
 FOR INCOME TAXES             117,521        63,929    (6,426,698)      788,595

PROVISION FOR INCOME TAXES     69,893        11,555     2,311,658      (290,342)
                         ------------  ------------  ------------  ------------
NET INCOME (LOSS)        $    187,414  $     75,484  $ (4,115,040) $    498,253
                         ============  ============  ============  ============



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

                                        6
<PAGE>
                                  ZUNICOM, INC.
          UNAUDITED  CONSOLIDATED  STATEMENTS OF OPERATIONS For the Three Months
               and Nine Months Ended September 30, 2009 and 2008
                                   (Continued)


                           For the three months ended  For the nine months ended
                           -------------------------  -------------------------
                                 September 30,              September 30,
                                   --------                    --------
                              2009          2008          2009          2008
                              ----          ----          ----          ----
Net income (loss)
attributable to common
stockholders             $    181,995  $     69,905  $ (4,131,921) $    481,052
                         ============  ============  ============  ============

Net income (loss) per
 share attributable to
 common stockholders
    Basic                $       0.02  $     0.007   $      (0.42)  $      0.05
                         ============  ============  ============  ============
    Diluted              $       0.02  $     0.007   $      (0.42)  $      0.05
                         ============  ============  ============  ============

Number of weighted average
 shares of common stock
 outstanding
    Basic                   9,733,527     9,957,196     9,751,006     9,957,196
                         ============  ============  ============  ============
    Diluted                 9,853,943    10,081,172     9,751,006    10,081,172
                         ============  ============  ============  ============























            The accompanying footnotes are an integral part of these
                       consolidated financial statements.
                                        7
<PAGE>
                                  ZUNICOM, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               For The Nine Months Ended September 30, 2009 and 2008

                                                         2009          2008
                                                   ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                  $ (4,115,040) $    498,253
Adjustments to reconcile net income to net
   cash used in operating activities:
 Depreciation and amortization of property
   and equipment                                         36,510        77,059
 Impairment of investment in UPG                      4,367,891             -
 Impairment in value of UPG notes                     1,425,788             -
 Gain on equity transactions of investee                              (21,372)
 Write off of property and equipment                     11,666         7,511
 Share in earnings of investee                          240,713      (543,218)
 Non-cash stock-based compensation                       38,456        77,397
 Provision for income taxes                          (2,311,658)      290,342
 Sale of intangible asset                                     -      (666,667)
 Decrease in restricted cash                                          351,000
 Change in operating assets and liabilities:
 Accounts receivable - trade                             (3,871)       10,908
 Accounts receivable - other                              3,967           962
 Inventories                                             (1,247)        4,863
 Prepaid expenses and other current assets              (14,073)      (15,776)
 Accounts payable                                       (58,800)       12,218
 Accrued liabilities                                   (105,667)      (27,475)
 Dividends payable                                            -        (5,579)
                                                   ------------  ------------
 Net cash used in, provided by operating
   activities                                          (485,365)       50,426
                                                   ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                        (900)      (23,226)
 Sale of intangible asset                                     -       666,667
 Purchase of UPG stock                                  (20,400)            -
                                                   ------------  ------------
 Net cash (used in), provided by investing
   activities                                           (21,300)      643,441

CASH FLOWS FROM FINANCING ACTIVITIES
 Principal payments on notes receivable               1,096,875       365,625
 Dividends paid on preferred stock                      (16,881)      (17,202)
                                                   ------------  ------------
 Net cash provided by financing activities            1,079,994       348,423
                                                   ------------  ------------
NET INCREASE  IN CASH AND CASH EQUIVALENTS              573,328     1,042,290
Cash and cash equivalents at beginning of period      1,522,831       165,276
                                                   ------------  ------------
Cash and cash equivalents at end of period            2,096,159     1,207,566
                                                   ============  ============
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid                                      $          -  $        793
                                                   ============  ============
            The accompanying footnotes are an integral part of these
                       consolidated financial statements.
                                        8
<PAGE>
                                  ZUNICOM, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - 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 41  percent  ownership
interest in Universal Power Group, Inc. ("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 B - BASIS OF PRESENTATION

The accompanying  unaudited  consolidated  financial  statements of Zunicom 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 United States  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 and nine month periods ended  September 30, 2009.  The results for the
three and nine  month  periods  ended  September  30,  2009 are not  necessarily
indicative  of the results that may be expected for the year ended  December 31,
2009. 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, 2008.

The accompanying  unaudited consolidated financial statements have been prepared
consistently  with  the  accounting   policies   described  in  Note  B  to  the
consolidated  financial statements included in our 2008 Form 10-K, which include
the following: use of estimates, cash and cash equivalents, accounts receivable,
inventories,  property and equipment,  income taxes,  long-lived assets, revenue
recognition,   earnings  per  share,   fair  value  of  financial   instruments,
stock-based compensation and investment in unconsolidated investee.

In December 2006 the Company's  previously  wholly-owned  subsidiary,
UPG,  completed an  underwritten  initial public  offering which resulted in the
Company's  ownership  interest  in UPG  being  reduced  from 100  percent  to an
ownership interest of 40 percent.  The Company consolidated UPG in its financial
statements  until  December  31,  2006  and  currently  accounts  for  UPG as an
unconsolidated  investee under the equity method of  accounting.  Prior to 2009,
the  Company  had  adopted  the  income  statement  gain  recognition  method of
accounting  for  issuances of an investee's  stock in accordance  with SEC Staff
Accounting  Bulletin  No. 51. In  connection  with the  adoption  of  Accounting
Standards  Codification  ("ASC")  810  "Consolidation"  (formerly  Statement  of
Accounting Standard No. 160 "Noncontrolling  Interests in Consolidated Financial
Statements")in  January  2009,  this  method was  changed  and the  Company  now
accounts for issuances of an investee's stock as equity transactions. During the
first quarter of 2009, the Company  acquired an additional  16,550 shares of UPG
bringing its interest in UPG to 41.0%.

                                        9
<PAGE>
NOTE B - BASIS OF PRESENTATION (CONTINUED)

Recent accounting pronouncements

FASB Accounting Standards Codification
(Accounting Standards Update ("ASU") 2009-01)
In June 2009, FASB approved the FASB  Accounting  Standards  Codification  ("the
Codification") as the single source of authoritative  nongovernmental  GAAP. All
existing  accounting  standard  documents,  such as FASB,  American Institute of
Certified  Public  Accountants,  Emerging  Issues  Task Force and other  related
literature,  excluding  guidance  from the  Securities  and Exchange  Commission
("SEC"), have been superseded by the Codification.  All other non-grandfathered,
non-SEC  accounting  literature  not  included  in the  Codification  has become
nonauthoritative. The Codification did not change GAAP, but instead introduced a
new structure that combines all  authoritative  standards into a  comprehensive,
topically  organized online database.  The Codification is effective for interim
or annual  periods  ending after  September 15, 2009,  and impacts the Company's
financial  statements  as all  future  references  to  authoritative  accounting
literature  will be referenced in accordance with the  Codification.  There have
been  no  changes  to the  content  of the  Company's  financial  statements  or
disclosures  as a result of  implementing  the  Codification  during the quarter
ended September 30, 2009.

As a result of the  Company's  implementation  of the  Codification  during  the
quarter  ended  September  30,  2009,  previous  references  to  new  accounting
standards  and  literature  are no longer  applicable.  In the  current  quarter
financial  statements,  the Company will  provide  reference to both new and old
guidance to assist in understanding  the impacts of recently adopted  accounting
literature, particularly for guidance adopted since the beginning of the current
fiscal year but prior to the Codification.

Noncontrolling Interests
(Included in ASC 810  "Consolidation",  previously SFAS No. 160  "Noncontrolling
Interests in Consolidated  Financial Statements an amendment of ARB No. 51") The
Company adopted SFAS 160,  "Noncontrolling  Interests in Consolidated  Financial
Statements  - an  amendment  of ARB No.51 "on  January 1, 2009.  This  statement
clarifies  that  a  noncontrolling  interest  in a  subsidiary  is an  ownership
interest  in the  consolidated  entity  that should be reported as equity in the
consolidated   financial   statements.   This  statement  changes  the  way  the
consolidated  income  statement  is  presented  by  requiring  net  income to be
reported at amounts that include the amounts attributable to both the parent and
the  noncontrolling  interest and to disclose  those  amounts on the face of the
income  statement.  The adoption of this standard did not have a material impact
on the Company's  consolidated  financial  statements  for the nine months ended
September 30, 2009.

Determining Whether an Instrument is Indexed to an Entity's Own Stock
(Included  in  ASC  815   "Derivatives   and  Hedging",   previously  EITF  07-5
"Determining  Whether an  Instrument  (or an Embedded  Feature) is Indexed to an
Entity's Own Stock") On January 1, 2009,  the Company  adopted  Emerging  Issues
Task Force  ("EITF") Issue No. 07-5,  "Determining  Whether an Instrument (or an
Embedded  Feature) Is Indexed to an Entity's  Own Stock"  ("EITF  07-5"),  which
requires  the  application  of a  two-step  approach  in  evaluating  whether an
equity-linked  financial  instrument  (or  embedded  feature)  is  indexed to an



                                       10
<PAGE>
NOTE  B  -  BASIS  OF PRESENTATION (CONTINUED)

entity's own stock,  including  evaluating the instrument's  contingent exercise
and settlement provisions.  The adoption of EITF 07-5 did not have any impact on
the  Company's  consolidated  financial  statements.

Business Combinations
(Included in ASC 805 "Business Combinations", previously SFAS No. 141R "Business
Combinations)  The Company  adopted  SFAS  141(R),  "Business  Combinations"  on
January 1, 2009. SFAS 141(R) provides companies with principles and requirements
on how an acquirer  recognizes  and  measures in its  financial  statements  the
identifiable  assets  acquired,  liabilities  assumed,  and  any  noncontrolling
interest in the acquiree as well as the  recognition and measurement of goodwill
acquired  in  a  business   combination.   SFAS  141(R)  also  requires  certain
disclosures  to enable users of the financial  statements to evaluate the nature
and financial effects of the business combination.  Acquisition costs associated
with the  business  combination  will  generally  be expensed as  incurred.  The
adoption of this standard did not have an impact on the  accompanying  unaudited
financial  statements  as the Company did not enter into a business  combination
during the nine months ended September 30, 2009.

Disclosures about Derivative Instruments and Hedging Activity
(Included  in  ASC  815  "Derivative  and  Hedging",  previously  SFAS  No.  161
"Disclosures about Derivative  Instruments and Hedging Activities - an amendment
to FASB statement No. 133") The Company adopted SFAS No. 161, "Disclosures about
Derivative  Instruments and Hedging  Activities - an amendment to FASB Statement
No.  133" on January 1, 2009.  SFAS No.  161 is  intended  to improve  financial
standards  for  derivative  instruments  and  hedging  activities  by  requiring
enhanced  disclosures to enable investors to better  understand their effects on
an entity's financial position,  financial performance, and cash flows. Entities
are required to provide  enhanced  disclosures  about: (a) how and why an entity
uses derivative  instruments;  (b) how derivative instruments and related hedged
items are accounted for under SFAS 133,  "Accounting for Derivative  Instruments
and Hedging Activities" and its related interpretations;  and (c) how derivative
instruments  and related  hedged  items affect an entity's  financial  position,
financial  performance,  and cash flows.  The adoption of this  standard did not
have a material impact on the Company's financial  statements or its disclosures
therein for the nine months ended September 30, 2009.

Equity Method Instrument
(Included  in  ASC  323  "Instruments  -  Equity  Method  and  Joint  Ventures",
previously EITF 08-6 "Equity Method  Accounting  Considerations")  On January 1,
2009, the Company adopted EITF No. 08-6,  "Equity Method  Investment  Accounting
Considerations  " ("EITF  08-6") , which  clarifies the  accounting  for certain
transactions and impairment  considerations involving equity method investments.
The adoption of EITF 08-6 did not have an impact on the  Company's  consolidated
financial statements.










                                       11
<PAGE>
NOTE C - STOCK-BASED COMPENSATION

Stock-based  compensation  expense recognized in the statement of operations for
the three and nine months  ended  September  30,  2009 of $12,959  and  $38,456,
respectively,  represents the  amortization of the restricted stock grant to our
chairman in 2007.  The  stock-based  compensation  for the three and nine months
ended  September  30, 2008  includes  compensation  expense of $38,800 for fully
vested  stock  options  granted  on  March  10,  2008  and  amortization  of the
restricted  stock  grant  to our  chairman  in 2007  of  $12,959,  and  $38,597,
respectively.

As of September 30, 2009,  $89,167 of the restricted stock grant to our chairman
remains  unamortized and $57,441 of the restricted  stock grant to UPG employees
remains  unamortized.  On January 21, 2009, the chief  executive  officer of UPG
resigned and according to the terms of the restricted stock agreement, forfeited
his restricted  stock grant.  As a result 227,229 shares of Zunicom common stock
have been returned to the Company and the  investment in UPG has been reduced by
$132,925.

   Valuation Assumptions

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, 2009 and 2008:

                                         For the Nine Months Ended September 30,
                                                 2009                 2008
                                            --------------       -------------
Weighted average grant date fair value      $        -         $      1.39
Weighted average assumptions used:
   Expected dividend yield                           -                0.00%
   Risk-free interest rate                           -                4.50%
   Expected volatility                               -                 131%
   Expected life (in years)                          -                   5

There were no option awards in the nine months ended September 30, 2009.

   Activity and Summary

Stock option activity under the 1999 and 2000 stock option plans was as follows:

                                                              Weighted Average
                                           Number of Shares   Exercise Price
                                           ----------------  -----------------
Options outstanding at December 31, 2008           525,000   $           0.85

      Granted                                           --   $             --
      Exercised                                         --   $             --
      Canceled, lapsed  or forfeited                    --   $             --
                                           ---------------   ----------------
Options outstanding at September 30, 2009          525,000   $           0.85
                                           ===============   ================


The following table summarizes stock options outstanding under the 1999 and 2000
stock option plans at September 30, 2009:

                                       12
<PAGE>
NOTE C - STOCK-BASED COMPENSATION (CONTINUED)


                        Options Outstanding      Options Exercisable
                -------------------------------- --------------------
                             Weighted
                              Average
                             Remaining  Weighted             Weighted
                 Number of  Contractual  Average  Number of   Average
Range of          Options      Life     Exercise   Options   Exercise
Exercise Prices Outstanding (in years)   Price   Exercisable  Price
--------------- ----------- ----------- -------- ----------- --------
$ 0.90              400,000         2.2 $   0.90     400,000 $   0.90

$ 1.75               25,000         9.6 $   1.75      25,000 $   1.75

$ 0.45              100,000         4.8 $   0.45     100,000 $   0.45
                ----------- ----------- -------- ----------- --------

$ 0.45 - $ 1.75     525,000         3.1 $   0.85     425,000 $   0.85
                =========== =========== ======== =========== ========

At September 30, 2009, the aggregate  intrinsic value of options outstanding and
options  exercisable was $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, 2009, 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.  These  options  remain  outstanding,  however,
should our Chairman choose to exercise these options, he will forfeit all rights
to the  restricted  stock.  The  officers  and  employees of UPG held options on
653,000 shares of Zunicom common stock which lapsed after the deconsolidation of
UPG.  On January 21,  2009,  the chief  executive  officer of UPG  resigned  and
according  to the  terms  of  the  restricted  stock  agreement,  forfeited  his
restricted  stock  grant.  Accordingly,  his shares  have been  returned  to the
Company and the investment in UPG has been reduced by $132,925.




                                       13
<PAGE>
NOTE C - STOCK-BASED COMPENSATION (CONTINUED)

In accordance with ASC 718 "Compensation - Stock Compensation",  previously SFAS
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 ASC 323
"Instruments  - Equity  Method  and  Joint  Ventures",  previously  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 (LOSS) INCOME PER SHARE

Basic net (loss)  income per share is  computed by  dividing  net (loss)  income
decreased by the  preferred  stock  dividends of $5,419,  $16,881,  $5,579,  and
$17,202  for the  three  and nine  months  ended  September  30,  2009 and 2008,
respectively,  by the weighted  average number of common shares  outstanding for
the period.

Diluted net (loss)  income per share is computed by dividing  net (loss)  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.

The dilutive  effect of 525,000 options has not been included in the computation
of dilutive net income per share for the three and nine months  ended  September
30, 2009 or 2008.  The options are "out of the money,"  i.e. the market price of
the stock is below the strike price of the options.  The dilutive  effect of the
conversion  of 60,208  shares of preferred  stock into 120,416  shares of common
stock has been  included in the  computation  of dilutive net income  (loss) per
share for the three months ended  September 30, 2009,  but has not been included
in the  computation  of dilutive net income (loss) per share for the nine months
ended September 30, 2009, as the effect would be anti-dilutive.

NOTE E - UNCONSOLIDATED SUBSIDIARY - INVESTEE

The  Company's  investment  in UPG is accounted  for under the equity  method of
accounting  for the three and nine month  period  ended  September  30, 2009 and
2008.  Following is a summary of financial  information of UPG for the three and
nine months ended September 30, 2009 and 2008:











                                       14
<PAGE>
NOTE E - UNCONSOLIDATED SUBSIDIARY - INVESTEE (CONTINUED)

                                  Three and Nine Months Ended September 30,
                              ----------- ----------- ----------- -----------
                                  2009        2008       2009         2008
                              ----------- ----------- ----------- -----------
                                              ($ in thousands)
----------------------------- ----------- ----------- ----------- -----------
Net revenues                  $   27,495  $   30,648  $   83,132  $   90,372
----------------------------- ----------  ----------  ----------  ----------
Cost of revenues                  22,958      26,052      68,682      76,787
----------------------------- ----------  ----------  ----------  ----------
Gross profit                       4,537       4,596      14,450      13,585
----------------------------- ----------  ----------  ----------  ----------
Operating expenses                 3,305       3,595      13,256      10,366
----------------------------- ----------  ----------  ----------  ----------
Income (Loss) from operations      1,232       1,001       1,194       3,219
----------------------------- ----------  ----------  ----------  ----------
Interest expense                    (239)       (236)       (719)       (737)
----------------------------- ----------  ----------  ----------  ----------
Other expense, net                    (1)          -          (1)          -
----------------------------- ----------  ----------  ----------  ----------
Interest income                        -          .5           2          .6
----------------------------- ----------  ----------  ----------  ----------
Income (Loss) from operations
 before income tax provision         992         765         476       2,482
----------------------------- ----------  ----------  ----------  ----------
Income tax provision                (380)       (363)       (998)     (1,053)
                              ----------  ----------  ----------  ----------
Net income (Loss)             $      612  $      402  $     (522)      1,429
                              ==========  ==========  ==========  ==========

Following  is a summary of the balance  sheets for UPG for the nine months ended
September 30, 2009 and December 31, 2008.

                                            September 30, 2009 December 31, 2008
                                                       ($ in thousands)
                                               -------------   --------------
Current assets                                        44,634           53,633
Noncurrent assets                                      2,259            2,107
Current liabilities                                   24,532           32,975
Noncurrent liabilities                                 4,108            4,055
Shareholders' equity                                  18,253           18,710

The Company evaluated its investment in UPG at March 31, 2009 to determine if an
other than  temporary  decline in fair value below the cost basis had  occurred.
The primary input in estimating  the fair value of the investment was the quoted
market value of UPG publicly traded shares as at March 31, 2009,  which declined
significantly  from the date of the initial  investment  in December  2006. As a
result of the severe decline in the quoted market value, the Company  recognized
an  impairment  in other income (loss) of $4,367,891 to adjust the cost basis in
the  investment to its estimated  fair value.  As a result the carrying value of
the Company's  investment in UPG as of September  30, 2009, is  $3,195,313.  The
Company has determined that there are no further impairments in the three months
ended September 30, 2009.


                                       15
<PAGE>
Note F: Fair Value of Financial Assets and Financial Liabilities

Effective  January 1, 2008, the Company  adopted the provisions of ASC 820 "Fair
Value Measurements and Disclosures",  previously SFAS No. 157 that relate to our
financial assets and financial liabilities ("financial  instruments").  SFAS No.
157 establishes a hierarchy that  prioritizes fair value  measurements  based on
the types of inputs used for the various valuation  techniques (market approach,
income  approach and cost  approach).  The levels of the hierarchy are described
below:

o   Level 1:  consists of financial  instruments  whose value is based on quoted
    market prices for identical financial instruments in an active market

o   Level 2: consists of financial  instruments  that are valued using models or
    other valuation  methodologies.  These models use inputs that are observable
    either directly or indirectly;  Level 2 inputs include (i) quoted prices for
    similar  assets or  liabilities  in active  markets,  (ii) quoted prices for
    identical or similar  assets or  liabilities in markets that are not active,
    (iii) pricing models whose inputs are observable for  substantially the full
    term  of  the  financial instrument and (iv) pricing models whose inputs are
    derived  principally from or corroborated by observable  market data through
    correlation  or other means for substantially the full term of the financial
    instrument

o   Level 3: consists of financial instruments whose values are determined using
    pricing   models  that  utilize   significant   inputs  that  are  primarily
    unobservable,  discounted cash flow methodologies, or similar techniques, as
    well as  instruments  for which the  determination  of fair  value  requires
    significant management judgment or estimation

The  assessment  of the  significance  of a  particular  input to the fair value
measurement  requires  judgment  and  may  affect  the  valuation  of  financial
instruments  and  their  classification  within  the fair  value  hierarchy.  As
required by SFAS No. 157, financial instruments are classified in their entirety
based on the  lowest  level  of  input  that is  significant  to the fair  value
measurement.  There have been no changes in the  classification of any financial
instruments within the fair value hierarchy since our adoption of SFAS No. 157.

The estimated  fair value of cash  equivalents,  accounts  receivable,  accounts
payable,  and accrued liabilities  approximate their carrying amounts due to the
relatively short maturity of these  instruments.  None of these  instruments are
held for trading purposes.

Nonrecurring Fair Value Measures

                           March 31,                                   Total
(in millions)                2009      Level 1   Level 2    Level 3   Losses
------------------------------------------------------------------------------
Assets
Equity method investments $2,644,416  $2,644,416 $  --      $   --  $(4,367,891)
Notes receivable          $3,327,338  $       -- $3,327,338 $   --  $(1,425,788)
------------------------------------------------------------------------------





                                       16
<PAGE>
Note F: Fair Value of Financial Assets and Financial Liabilities (CONTINUED)

In accordance  with ASC 323  "Investments  - Equity Method and Joint  Ventures",
previously  Accounting  Principles  Board  ("APB") No. 18, "The Equity Method of
Accounting for Investments in Common Stock," we recognized as at March 31, 2009,
an other than  temporary  impairment to other income  (expense) of $4,367,891 to
adjust our cost basis in our  investment in UPG of  approximately  $7,916,442 to
its estimated fair value (see Note E ). The valuation  methodology  utilized the
quoted market value of UPG's publicly traded shares. The Company's investment in
UPG is classified as a Level 1 financial  instrument in accordance  SFAS No. 157
in the fair value  hierarchy,  as the estimated  fair value of the investment is
based on observable  inputs.  We believe the estimated  fair value is consistent
with the underlying  principle of SFAS No. 157, which is that the estimated fair
value  should  represent  the  exit  price  from  a  marketplace   participant's
perspective. The Company has determined that there are no further impairments in
the three months ended September 30, 2009.

NOTE G - RELATED PARTY NOTES

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, 2009, the Company has received
$1,828,125 of the principal and recognized an impairment charge of $1,425,788,as
discussed  below,  leaving a  balance  of  $2,596,088,  of which  $1,462,500  is
classified as current and $1,133,588 is classified as long term.

In conjunction  with its evaluation of its investment in UPG described in Note E
above, the Company also evaluated its two unsecured promissory notes from UPG in
the amount of $4,753,125 to determine if an other than temporary  decline in the
fair value of the notes had  occurred.  The principle  inputs in estimating  the
fair  value of the UPG notes was the  possible  impairment  of UPG's  ability to
service the notes in the future given the revenue  decline in the first  quarter
of 2009,  especially from its largest customer,  and the  profitability  decline
from 2007 to the first quarter of 2009. As a result,  the Company  recognized an
impairment  in other income (loss) of $1,425,788 to adjust the cost basis of the
notes to their estimated fair value. As a result, the carrying value of the UPG
notes as of September 30, 2009, is $2,596,088.  The Company has determined  that
there are no further  impairments in the three months ended  September 30, 2009.
The Company is dependent  upon the interest  and  principal  payments on the UPG
notes  for its cash  flow (see Note K  below).  The  Company  does not  believe,
however, that an impairment of the value of the notes will negatively impact its
ability to continue as a going concern over the next twelve months.  The Company
has sufficient cash on hand to meet its obligations over the next twelve months.

NOTE H - SHAREHOLDERS' EQUITY

During the three and nine months ended  September 30, 2009 and 2008, the Company
paid a cash dividend of $5,419,  $16,881,  $5,579, and $17,202 respectively,  to
the holders of its class A Preferred Stock.





                                       17
<PAGE>
NOTE I - 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.  As of
September 30, 2009, the Company is not subject to any ongoing legal proceedings.

NOTE J - COMMITTMENTS

NOTE SUBORDINATION

In 2006,  UPG (then a wholly owned  subsidiary  of the  Company)  obtained a $16
million line of credit from Compass Bank  (guaranteed  by the Company ) that was
to expire on May 5, 2007,  but was extended for 45 days.  On July 31, 2007,  the
bank  terminated the Company's  guaranty of UPG bank  indebtedness.  On July 31,
2007,  (UPG then only 40% owned by the Company) a  subordination  agreement with
the bank was  signed  that  provided  for the  Company  (i) to  subordinate  its
$5,850,000  UPG notes to any Compass Bank loan and (ii) to hold in trust for the
benefit of the bank the principal and interest  payments received by the Company
from UPG on the UPG notes payable to the Company.  The Company sought rescission
or  modification  of  this  subordination  agreement  by  the  bank.  Until  the
resolution of this issue,  the Company  accounted for all payments by UPG on the
notes as  "restricted  cash." On June 17, 2008,  the Company,  the bank, and UPG
signed a "Second Amended and Restated Creditors'  Subordination Agreement" under
which the Company  continues to  subordinate  its $5,850,000 in UPG notes to any
Compass Bank loan but removes the provision  under which the Company was to hold
in trust the principal and interest payments received from UPG on the UPG notes.
The  Company now shall  receive  and may spend all  regular  payments on the UPG
notes.  Accordingly,  the Company no longer  classifies  receipts  under the UPG
notes as restricted  cash. UPG secured a $30 million line of credit with Compass
Bank and has an outstanding loan under the line.

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.  During  the third  quarter  of 2008,  the  Company
extended  the office  lease for one year to April 30,  2010 at the same rent and
terms.  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            2009      2010      2011       2012      Total
------------- --------- ---------- --------- --------- -----------
Office Space   $14,975    $25,933         -         -    $40,908
------------- --------- ---------- --------- --------- -----------
Equipment      $ 1,405    $ 3,359    $1,504    $  376    $ 6,644
------------- --------- ---------- --------- --------- -----------
Total          $16,380    $29,292    $1,504    $  376    $47,552
------------- --------- ---------- --------- --------- -----------




                                       18
<PAGE>
NOTE K - SALE OF INTANGIBLE ASSET

Pursuant to a purchase  agreement  dated January 28, 2008, the Company sold to a
third party two patents which it does not require to conduct its  business.  The
Company received net proceeds of $666,667 after commissions.  Those proceeds are
included as gain on sale of assets - net in the Company's Unaudited Consolidated
Statement of Operations for the nine months ended September 30, 2008.

NOTE L - ECONOMIC DEPENDENCE

The Company's primary source of cash is from the interest and principal payments
on the UPG notes.  UPG relies on one customer for a  significant  portion of its
business, representing approximately 47%, 43%, 46%, and 45% of its net revenues
for the three and nine months ended  September 30, 2009 and 2008,  respectively.
Also, the Company is subject to a subordination agreement among the Company, UPG
and UPG's bank.  Should UPG default on its  obligations to its bank, it would be
unable to continue its interest and principal payments to the Company. Any event
which  would  cause UPG to be unable to  continue  its  interest  and  principal
payments would have an adverse financial impact on the Company.

NOTE M - SUBSEQUENT EVENTS

The Company  evaluated  events thru  November  13, 2009 for  consideration  as a
subsequent event to be included in its September 30, 2009 financial  statements,
issued November 16, 2009.
































                                       19
<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, 2008.

RESULTS OF OPERATIONS

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

Three months ended September 30, 2009

REVENUES

For the three month period ended September 30, 2009, Zunicom, through its wholly
owned subsidiary  AlphaNet,  had consolidated  revenues of $120,027  compared to
241,211  for the same  period in 2008,  a decrease  of  $121,184  or 50.2%.  The
revenue  decrease is due principally to a decline in the number of installations
of the Office(TM) product, a sharp decrease in renewals,  and a drop in business
travel due to the economic recession.  Management is considering various options
for AlphaNet.

COST OF REVENUES

For the three month period ended September 30, 2009, Zunicom's consolidated cost
of  revenues  is $37,991  compared  to $79,949  for the same  period in 2008,  a
decrease  of  $41,958 or 52.5%.  The  decrease  is due to the  decline in direct
servicing costs for the Office(TM)  product  principally in the areas of repairs
and maintenance,  installation costs and licensing  consistent with the decrease
in installations.

GROSS PROFIT

For the three month period ended  September 30, 2009,  Zunicom's gross profit is
$82,036  compared to $161,262 for the same period in 2008, a decrease of $79,226
or 49.1%.  Gross  profit as a percent of revenue  is 68.3% in 2009  compared  to
66.8% in 2008.

OPERATING EXPENSES

For the three month period ended  September  30,  2009,  Zunicom's  consolidated
operating expenses,  consisting of selling,  general and administrative expenses
and  depreciation  and  amortization  of property  and  equipment  decreased  to

                                       20
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

$267,967 compared to $331,296 for the same period in 2008, a decrease of $63,329
or 19.1%. The decrease is due to a decrease in operating expenses of AlphaNet of
$65,194,  offset by an increase in Zunicom's expenses of $16,886, and a decrease
in depreciation of $15,021.

AlphaNet's  selling,  general and  administrative  expenses  for the three month
period ended September 30, 2009 were $160,643  compared to $225,837 for the same
period in 2008,  a decrease  of  $65,194 or 28.9%.  The  decrease  is  primarily
attributable to decreased compensation expense, decreased occupancy costs due to
the relocation of the Toronto office, and decreased marketing costs. In February
2009,  AlphaNet's  Canadian employees were put on a four day week reflecting the
decline in workload due to decreased business for the Office (TM) product.

Zunicom's  selling,  general  and  administrative  expenses  for the three month
period ended  September  30, 2009 were $98,928  compared to $82,042 for the same
period in 2008, an increase of $16,886 or 20.6%. The increase is attributable to
increases in  consulting,  accounting,  and legal fees related to Sarbanes Oxley
expense and other issues, offset by decreases in travel and other administrative
expenses.

For the three month period ended September 30, 2009, the Company recorded $8,396
in  depreciation  and  amortization  expense  compared  to $23,417 in 2008.  The
decrease  is  principally  due  to  declining  equipment  purchases  in AlphaNet
consistent with the decline in the Office(TM) product.

OTHER INCOME / EXPENSE

Zunicom's  consolidated  interest  income  for  the  three  month  period  ended
September  30, 2009 was $67,415  compared to interest  income of $90,823 for the
same period in 2008, a decrease of $23,409, or 25.8%. The decrease is due to the
decrease in interest on the UPG notes  reflecting a decline in the amount of the
notes due to the principal payments. Interest income consists of interest on the
UPG notes plus interest on bank cash balances.

Equity in earnings of investee of $241,287  represent  Zunicom's  share of UPG's
net income for the three month  period  ended  September  30,  2009  recorded in
accordance with the equity method of accounting for an unconsolidated investee.

Other,  net,  represents loss on sale of assets and loss on foreign exchange for
the three months ended September 30, 2009, of $5,250 compared to $10,099 for the
same period in 2008.

INCOME TAXES

The provision for income taxes represents  changes in the Company's  non-current
deferred tax liability resulting from its loss from operations and the impact of
book, tax differences on its excess loss account.







                                       21

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

Nine months ended September 30, 2009

REVENUES

For the nine month period ended September 30, 2009, Zunicom,  through its wholly
owned subsidiary  AlphaNet,  had consolidated  revenues of $428,181  compared to
771,347  for the same  period in 2008,  a decrease  of  $343,166  or 44.5%.  The
revenue  decrease  is  due  principally  to a  decline  in  the  number  of  new
installations  of the Office(TM)  product,  a sharp decrease in renewals,  and a
drop in business travel due to the economic recession. Management is considering
various options for AlphaNet.

COST OF REVENUES

For the nine month period ended September 30, 2009, Zunicom's  consolidated cost
of  revenues is $108,235  compared  to $240,874  for the same period in 2008,  a
decrease  of  $132,639  or 55.1%.  The  decrease is due to the decline in direct
servicing costs for the Office(TM)  product  principally in the areas of repairs
and maintenance,  installation costs and licensing  consistent with the decrease
in new installations.

GROSS PROFIT

For the nine month period ended  September 30, 2009,  Zunicom's  gross profit is
$319,946  compared  to  $530,473  for the same  period in 2008,  a  decrease  of
$210,527  or  39.7%.  Gross  profit  as a percent  of  revenue  is 74.7% in 2009
compared to 68.8% in 2008.

OPERATING EXPENSES

For the nine month  period ended  September  30,  2009,  Zunicom's  consolidated
operating expenses,  consisting of selling,  general and administrative expenses
and  depreciation  and  amortization  of property  and  equipment  decreased  to
$903,317  compared  to  $1,218,964  for the same  period in 2008,  a decrease of
$315,647 or 25.9%.  The decrease is due to a decrease in  operating  expenses of
AlphaNet of  $194,681,  a decrease  in  Zunicom's  expenses  of  $80,417,  and a
decrease in depreciation of $40,549.

AlphaNet's  selling,  general  and  administrative  expenses  for the nine month
period ended September 30, 2009 were $517,076  compared to $711,757 for the same
period in 2008,  a decrease  of  $194,681 or 27.4%.  The  decrease is  primarily
attributable to decreased compensation expense and decreased occupancy costs due
to the  relocation of the Toronto  office.  Also,  equipment  costs and supplies
expenses are lower  reflecting  the decrease in business  activity.  In February
2009,  AlphaNet's  Canadian employees were put on a four day week reflecting the
decline in workload due to decreased business for the Office (TM) product.

Zunicom's selling, general and administrative expenses for the nine month period
ended September 30, 2009 were $349,730  compared to $430,148 for the same period
in 2008,  a decrease  of $80,417  or 18.7%.  The  decrease  is  attributable  to
decreased  accounting  fees which were higher in 2008 due to additional  expense
related  to  Sarbanes  Oxley  compliance  and  other  issues,  and  lower  stock
compensation.  There were no stock options issued in the nine month period ended
September 30, 2009.
                                       22
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

For the nine month period ended September 30, 2009, the Company recorded $36,510
in  depreciation  and  amortization  expense  compared  to $77,059 in 2008.  The
decrease  is  principally  due to  declining  equipment  purchases  in  AlphaNet
consistent with the decline in the Office(TM) product.

OTHER INCOME / EXPENSE

Zunicom's consolidated interest income for the nine month period ended September
30,  2009 was  $212,949  compared to  interest  income of $270,346  for the same
period in 2008,  a decrease of  $57,397,  or 21.2%.  The  decrease is due to the
decrease in interest on the UPG notes  reflecting a decline in the amount of the
notes due to the principal payments. Interest income consists of interest on the
UPG notes plus interest on bank cash balances.

Loss in earnings of investee of $240,713 represent  Zunicom's share of UPG's net
loss for the nine month period ended  September  30, 2009 recorded in accordance
with the equity method of accounting for an unconsolidated investee.

Other,  net,  represents loss on sale of assets and loss on foreign exchange for
the nine months ended September 30, 2009, of $21,886 compared to $24,517 for the
same period in 2008.  In 2008,  the loss on sale of assets and foreign  exchange
were  offset by the  proceeds of $666,667  from the sale,  in June 2008,  of two
patents no longer required by the Company.

INCOME TAXES

The provision for income taxes represents  changes in the Company's  non-current
deferred tax liability resulting from its loss from operations and the impact of
book, tax differences on its excess loss account. The provision for income taxes
for the nine month period ended September 30, 2009, of $2,311,658  resulted from
the change in book, tax differences  from the impairment  charges  recognized in
the first quarter of 2009.

The Company evaluated its investment in UPG at March 31, 2009 to determine if an
other than  temporary  decline in fair value below the cost basis had  occurred.
The primary input in estimating  the fair value of the investment was the quoted
market value of UPG publicly traded shares as at March 31, 2009,  which declined
significantly  from the date of the initial  investment  in December  2006. As a
result of the severe decline in the quoted market value, the Company  recognized
an  impairment in other income (loss) of $4,367,891 to adjust the costs basis in
the investment to its estimated fair value.

In conjunction with its evaluation of its investment in UPG described above, the
Company also evaluated its two unsecured promissory notes from UPG in the amount
of $4,753,125 to determine if an other than temporary  decline in the fair value
of the notes had occurred.  The principle inputs in estimating the fair value of
the UPG notes was the possible  impairment of UPG's ability to service the notes
in the future given the revenue decline in the first quarter of 2009, especially
from its largest customer,  and the profitability decline from 2007 to the first
quarter of 2009.  As a result,  the Company  recognized  an  impairment in other
income  (loss)  of  $1,425,788  to adjust  the cost  basis of the notes to their
estimated  fair value.  As a result,  the carrying  value of the UPG notes as of


                                       23
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

September 30, 2009,  is $2,596,088.   The Company is dependent upon the interest
and  principal  payments  on the UPG notes for its cash flow (see Note K below).
The Company does not believe,  however,  that an  impairment of the value of the
notes will negatively impact its ability to continue as a going concern over the
next  twelve  months.  The  Company  has  sufficient  cash on  hand to meet  its
obligations  over the next  twelve  months  and the  Company  believes  that any
negative  impact from an impairment in the value of the notes would occur toward
the end of the term of the notes.

The  Company  recognized  the other than  temporary  decline in the value of its
investment in UPG and the impairment in the long term note  receivable  totaling
$5,793,679 in other income (expense) in its statement of operations.

LIQUIDITY

Zunicom, on a consolidated basis, had cash and cash equivalents of $2,096,159 at
September 30, 2009.

Net cash used in  operating  activities  was  $485,365 for the nine month period
ended  September  30, 2009 as compared to a provision of cash of $50,426 for the
same  period  in 2008.  The  cash  used in  operating  activities  is  primarily
attributable  to decreases in accounts  receivable - trade,  inventory,  prepaid
expenses and other current assets,  accounts payable, and accrued liabilities of
$183,658,  offset by an  increase  in  accounts  receivable  - other of  $3,967.
Changes in non-cash charges  consisted of increases in depreciation,  impairment
of the investment in UPG and the UPG notes, write-off of property and equipment,
equity in earnings of investee,  and  stock-based  compensation  of  $6,121,024,
offset by a decrease in provision for income taxes of $2,311,658.

Net cash used in investing  activities for the nine month period ended September
30, 2009,  was $21,300 as compared to net cash provided of $643,441 for the same
period in 2008. The net cash used in investing activities consisted of purchases
of UPG stock of $20,400.

Net cash  provided  by  financing  activities  for the nine month  period  ended
September 30, 2009 was $1,079,994  representing principal payments received from
UPG of $1,096,875  offset by $16,881  representing  payment of cash dividends on
the Company's preferred stock.

In 2006,  UPG (then a wholly owned  subsidiary  of the  Company)  obtained a $16
million line of credit from Compass Bank  (guaranteed  by the Company ) that was
to expire on May 5, 2007,  but was extended for 45 days.  On July 31, 2007,  the
bank terminated the Company's guaranty of UPG bank indebtedness.











                                       24

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

On July 31,  2007,  (UPG  then only 40% owned by the  Company)  a  subordination
agreement  with  the  bank was  signed  that  provides  for the  Company  (i) to
subordinate  its  $5,850,000 UPG notes to any Compass Bank loan and (ii) to hold
in trust  for the  benefit  of the  bank the  principal  and  interest  payments
received by the Company from UPG on the UPG notes  payable to the  Company.  The
Company sought rescission or modification of this subordination agreement by the
bank. Until the resolution of this issue, the Company accounted for all payments
by UPG on the notes as  "restricted  cash." On June 17, 2008,  the Company,  the
bank,  and UPG signed a "Second  Amended and Restated  Creditors'  Subordination
Agreement"  under which the Company  continues to subordinate  its $5,850,000 in
UPG notes to any Compass  Bank loan but removes  the  provision  under which the
Company was to hold in trust the principal and interest  payments  received from
UPG on the UPG notes.  The Company  now shall  receive and may spend all regular
payments  on the UPG  notes.  Accordingly,  the  Company  no  longer  classifies
receipts under the UPG notes as restricted  cash. UPG secured a $30 million line
of credit with Compass Bank and has an outstanding loan under the line.

Zunicom  management  believes  that cash on hand will be  sufficient to meet its
operational needs over the next year.

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. In addition,  our notes receivable from
UPG are at fixed rates of interest.


















                                       25
<PAGE>
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, 2009.  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, 2009
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.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None

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).





                                       26
<PAGE>
          10.1 Second  Amended and Restated  Creditors  Subordination  Agreement
          (incorporated  by reference to the Company's  Quarterly Report on Form
          10-Q for the Quarter ended June 30, 2008, Commission File No. 0-27210,
          filed August 14, 2008)

          14.1 Code of Ethics and  Business  Conduct as adopted  March 30,  2004
          (incorporated by reference to the Company's Annual Report on Form 10-K
          for the Fiscal Year ended December 31, 2003, Commission File No.
          0-27210, filed March 31, 2004)

          31.1  Certification of Chief Executive Officer Pursuant to Section 302
          of the  Sarbanes-Oxley  Act  of  2002*  31.2  Certification  of  Chief
          Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
          2002*

          32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C.
          Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002* 32.2 Certification of Chief Financial Officer Pursuant to
          18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the
          Sarbanes- Oxley Act of 2002*
-----------------
* Filed herewith.



































                                       27
<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 13, 2009                    /s/ John C. Rudy
                                       --------------------------------
                                       John C. Rudy
                                       Chief Financial Officer
                                       (principal financial officer)







































                                       28