Unico 10K 2008 Annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act

of 1934 For the Fiscal Year Ended February 29, 2008

Commission File Number: 000-30239

UNICO, INCORPORATED

(Exact name of registrant as specified in its charter)


Arizona		13-4171971
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8880 Rio San Diego Drive, 8th Floor, San Diego, California 92108 (Address of principal executive offices) (Zip code)

(619) 209-6124 (Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

None

(Title of each class)

N/A

(Name of Exchange on which registered)

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

Common Stock, $0.001 par value

(Title of Class)

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 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 past 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-KB is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-KB. [X]

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 the 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]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity as of the last business day of the registrant’s most recently completed fiscal year. $2,460,541, based on the last sale price of $0.0005 as reported on the OTC bulletin board.

The Registrant had 4,940,363,072 shares of common stock, $0.001 par value, outstanding as of May 08, 2008.

Transitional Small Business Disclosure Format (Check One)

Yes [ ] No [X]

TABLE OF CONTENTS


PART I	Page
ITEM 1. BUSINESS	3
ITEM 1A. RISK FACTORS	12
ITEM 1B. UNRESOLVED STAFF COMMENTS	12
ITEM 2. PROPERTIES	12
ITEM 3. LEGAL PROCEEDINGS	17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	17
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	18
ITEM 6. SELECTED FINANCIAL DATA	19
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	19
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	23
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	23
ITEM 9A(T).CONTROLS AND PROCEDURES	23
ITEM 9B. OTHER INFORMATION	24
PART III
ITEM 10. DIRECTORS EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	24
ITEM 11. EXECUTIVE COMPENSATION	26
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	27
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	28
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	30
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	30

PART I

Forward Looking Statements

This document includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company would like to caution certain readers regarding certain forward-looking statements in this document and in all of its communications to shareholders and others, on management’s projections, estimates and all other communications. Statements that are based on management’s projections, estimates and assumptions are forward-looking statements. The words believe, expect, anticipate, intend and similar expressions generally identify forward-looking statements. While the Company believes in the veracity of all statements made herein, forward-looking statements are necessarily based upon a number of estimates, and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies and known and unknown risks. Many of the uncertainties and contingencies can affect events and the Company’s actual results and could cause its actual results to differ materially from this expressed in any forward-looking statements made by, or on behalf, of the Company.

Possible Reverse Stock Split

On January 28, 2008 the stockholders of Unico, Incorporated approved a proposal to amend the Company’s Articles of Incorporation to authorize the Board of Directors, in its discretion, to effect a reverse stock split of the Company’s common stock at a ratio of up to one for five hundred during the six month period following the date of the Special Meeting of Shareholders. The Board of Directors has not yet approved a reverse stock split of the Company’s common stock. However, the Company believes that a reverse split of the Company’s common stock is in the Company’s best interest, as it will enable the Company to increase the number of authorized, but unissued common shares, which can then be used to permit the conversion of outstanding convertible debentures to shares of the Company’s common stock, and for raising additional needed capital. It will also assist the Company in increasing the trading price of the Company’s common stock to a level more acceptable to potential investors.

ITEM 1.

DESCRIPTION OF BUSINESS

General

Unico, Incorporated (“the Company”, “Unico” or “UNCN”) an Arizona corporation, was formed as an Arizona corporation on May 27, 1966. It was incorporated under the name of Red Rock Mining Co., Incorporated. It was later known as Industries International, Incorporated and I.I. Incorporated before the name was eventually changed to Unico, Incorporated in 1979.

On July 12, 2004, Unico filed an election with the U.S. Securities and Exchange Commission to become a business development company (“BDC”) pursuant to Section 54 of the Investment Company Act of 1940. On August 1, 2005, the Board of Directors unanimously approved a proposal to withdraw the Company’s election to be treated as a business development company as soon as practicable so that Unico could begin conducting business as an operating company rather than as a business development company subject to the Investment Company Act. On October 11, 2005, a Special Meeting of the Unico shareholders was held to consider and vote upon a proposal to authorize the Company’s Board of Directors to withdraw the Company’s election to be treated as a BDC and the proposal was approved. On October 12, 2005 a Notification of Withdrawal was filed with the Securities and Exchange Commission so that Unico could begin conducting business as an operating company rather than as a BDC subject to the Investment Company Act.

The mining operations at the Deer Trail Mine have been conducted through Unico's subsidiary, Deer Trail Mining Company, LLC (“Deer Trail Mining Company” or “DTMC”) since soon after DTMC was formed in late June, 2004. The mining operations at the Bromide Basin Mines have been conducted through Unico's subsidiary, Bromide Basin Mining Company, LLC (“Bromide Basin Mining Company” or "BBMC") since soon after BBMC was formed in late June, 2004. Future mining operations at the Silver Bell Mine will be conducted through Unico's subsidiary, Silver Bell Mining Company, Inc. ("SBMC").

Deer Trail Mining Company, LLC

On March 30, 1992, Unico, Incorporated entered into a Mining Lease and Option to Purchase agreement with Deer Trail Development Corporation, with headquarters in Dallas, Texas. Deer Trail Development Corporation is now known as Crown Mines, L.L.C. The lease was to run for a period of 10 years, and cover 28 patented claims, 5 patented mill sites and 171 unpatented claims located approximately 5 miles South of Marysvale, Utah. It includes mine workings known as the Deer Trail Mine, the PTH Tunnel and the Carisa and Lucky Boy mines. There are no known, proven or probable reserves on the property.

Effective December 1, 2001, a new lease agreement was entered into between the parties (“Deer Trail Lease”) covering the same property for a period of thirty (30) months. It was subsequently extended through a series of amendments.

In July 2007, Deer Trail Mining Company completed the purchase of the claims covered by the Deer Trail Lease. A total of $4,000,000 was paid to purchase the property over a period of approximately three years. The purchase of the claims also included the purchase of a fifty percent (50%) interest in Water Right No. 63-37, said fifty percent (50%) portion including a maximum flow of 0.125 cubic feet of water per second and a maximum annual diversion of 90.5 acre feet of water from Three Mile Spring for year-round mining purposes. The purchase of the claims also included a fifty percent (50%) interest in a contractual right to use water diverted under Water Right No. 63-3043 as evidenced and described in the Agreement between Cottonwood Irrigation Company and Deer Trail Development Corporation dated July 28, 1977. The fifty percent (50%) interest in the contractual water right allows Deer Trail Mining Company to truck not more than 2,500 gallons of water per week from the Cottonwood Creek to the Deer Trail Mine for mining activities during the irrigation season (April 15 to October 15), and possibly more during the remaining portion of each year.

Deer Trail Mining Company also obtained a lease from Crown Mines, L.L.C. of the remaining fifty percent (50%) interest in Water Right No. 63-37 and the remaining 50% interest in the contractual water right (Water Right 63-3043. The lease is for an initial term of 5 years for no rent. The lease may be terminated by Crown Mines, L.L.C. upon 12 months’ written notice if Crown Mines determines that the water rights covered by the lease are necessary for the operation and development of any of Crown Mines’ mining claims or for other permitted uses. The lease may be extended if Crown Mines determines that the water rights covered by the lease are not required for the operation and development of any of Crown Mines’ mining claims or for other permitted uses during the extension period, provided that the parties can agree on other terms including a price or rent for the extended term.

Crown Mines, L.L.C. retained a perpetual royalty interest on minerals taken from the claims purchased by Deer Trail Mining Company. The perpetual royalty is three percent (3.0%) of net smelter returns on minerals other than gold. The royalty rate for gold is three percent (3.0%) when the price of gold is less than or equal to $500 per troy ounce, four percent (4.0%) when the price of gold is more than $500 and less than or equal to $600 per troy ounce, and five percent (5.0%) when the price of gold is greater than $600 per troy ounce. Crown Mines, L.L.C. also retained an undivided three percent (3.0%) interest in any oil and gas and associated hydrocarbons produced from the claims.

Crown Mines, L.L.C. also retained an access easement and a water line pipeline easement across the claims sold to Deer Trail Mining Company.

Deer Trail Mining Company has agreed to provide Crown Mines, L.L.C. with information obtained as a result of Deer Trail Mining Company’s exploration activities on the claims, and Deer Trail Mining Company granted to Crown Mines, L.L.C. a right of first refusal to repurchase the claims or any portion thereof.

In August 2006, Deer Trail Mining Company entered into a Mining Lease with Joel Johnson covering the Clyde, Clyde Intermediate and Crown Point claims. These claims are located near the Deer Trail Mine. Deer Trail Mining Company has leased the claims for the purpose of conducting mine exploration, evaluation, and possible mining activities on the claims. The Mining Lease is for two years, with options to extend the lease for 50 additional one year periods. Under the terms of the Mining Lease, Deer Trail Mining Company paid initial down payments totaling $31,000 with $4,000 due in the second year of the lease. If Deer Trail Mining Company elects to extend the lease, it must pay $3,000 for the first extension year, and the annual lease extension payment increases ten percent (10%) per year thereafter. Additionally, Deer Trail Mining Company will pay three percent (3%) of the gross sale proceeds from the sale of any ore concentrates, or other mineral resources extracted from the claims.

In September 2006, Deer Trail Mining Company entered into a Non-Patented Mining Claims Lease covering approximately 70 additional claims covering approximately 1,500 acres in Piute County Utah for the purpose of exploration, evaluation and mining activities. In consideration for the rights under the agreement, the Deer Trail Mining Company agreed to pay the lease holders $7,000 per year for each of the first three years. Deer Trail Mining Company has the right to extend the lease for 50 additional one year periods. If extended by Deer Trail Mining Company, the annual lease payment is $10,000 in each of years four and five, and thereafter the annual lease payment increases by ten percent (10%) per year. In addition to the annual lease payments, Deer Trail Mining Company has also agreed to pay an amount equal to three percent (3%) of the gross sales proceeds from all ore, concentrates, and all other productions of mineral resources extracted from the claims. The agreement contains an option to purchase the claims exercisable at $350,000 during the five first years of the lease. The exercise price increases $50,000 per year thereafter. It may only be exercised while the lease is effective.

Following the formation of the Deer Trail Mining Company in June 2004, Unico assigned all of the various assets, liabilities and operations associated with the Deer Trail Mine to Deer Trail Mining Company which has assumed responsibility for making payments under the Deer Trail Lease.

Since June 2004 Deer Trail Mining Company has assumed operations, ownership and management control of the Deer Trail Mine. Deer Trail Mining Company presently has 18 full time employees, 1 part time employee and 4 consultants. The necessary permits to commence mining activities at the Deer Trail Mine have been acquired, provided that the surface disturbance from the mining

activities does not exceed 10 acres for both mine and mill. In early 2005, Unico and Deer Trail Mining Company, received approval of the company's Large-Scale Mining Permit for the Deer Trail Mine in Marysvale, Utah. The State of Utah's Division of Oil, Gas and Mining granted approval of the company's application to expand its existing small mining project to a large mining operation, which is expected to significantly increase the area of mining activity and the capacity of the company's mill at the Deer Trail Mine. This Large-Scale permit takes the place of the previous two Small-Scale permits described above. In 2004, Unico filed to obtain a construction permit with the State of Utah Department of Environmental Quality (both the Utah Division of Air Quality and the Utah Division of Water Quality) for the Deer Trail Mine tailings impoundment pond no. 2.

Prior to June 2004, Unico worked to reopen the Deer Trail Mine. Unico commenced limited mining activities in late March 2001 on the Deer Trail Mine. There were between 2 and 5 miners at various times working full time in the Deer Trail Mine both on mine development work and production work until approximately October 2003. Their efforts were concentrated in the 3400 Area of the mine, from which they removed approximately 1,000 tons of ore per month. The ore was stock-piled and some of it has been crushed. Some of the employees have worked on mine maintenance.

Unico completed a mill on site at the Deer Trail Mine. In November 2001, Unico began milling activities. Unico started screening and crushing ore dumps on the upper Deer Trail Mine and moved the materials to the ball mill. Currently the Deer Trail Mining Company is reconstructing the mill to enhance productivity and efficiency. In July 2006, Deer Trail Mining Company completed the upgrades to the screening plant and began screening the ore dumps at the upper Deer Trail Mine. Once screened, the material is moved to the mill facility and stockpiled for further processing. The Company anticipates running this material through its mill once reconstruction is complete.

On August 31, 2005, Deer Trail Mining Company entered into a five-year purchase contract with PGM, LLC of Los Angeles under which PGM will purchase precious metal bearing concentrates from the Deer Trail processing center. Most sales will not occur until the mill processing center is complete at the Deer Trail Mine. PGM has advanced Deer Trail Mining Company $25,000 for an initial shipment of concentrates that will be produced on a pilot plant basis.

The Company is currently in contact with several smelters and a trading company to determine how best to sell the lead concentrates, and zinc concentrates which will be produced by the Deer Trail Mine mining and milling operations. The concentrates can be transported by either rail or truck, and there are a variety of trucking companies that are willing and able to transport concentrates to smelters or other places designated by purchasers.

In September 2004, Deer Trail Mining Company completed its first phase of exploratory drilling at the Deer Trail Mine. The Deer Trail Mining Company contracted Lang Exploratory Drilling to complete the phase of drilling. Lang completed a total of 3,653 feet of reverse circulation drilling and finished 28 drill holes at specified targets located on the Upper Deer Trail Mine. 741 samples were safeguarded by Lang Exploratory Drilling during this phase and shipped to ALS Chemex at its Elko, Nevada facility for independent lab verification and analysis.

The first phase of exploration drilling was designed to identify near surface deposits, determine potential resources and define limits of mineralization south of the main ore channel mined at the Upper Deer Trail Mine. Historical data of the workings was sufficient to delineate the grade of mineralization remaining in the stopes, but no data was available to delineate the grade of mineralization outside the workings or how far that mineralization flowed into the surrounding formations. The initial phase of reverse circulation drilling serves as an adequate means to define the limits of mineralization south of the main ore channel, which is situated in the lower Toroweap formation, along the crest and down the northeast limb of the Deer Trail anticline.

This phase of drilling was accomplished with lower cost reverse circulation drill holes in order to establish the presence of mineralization at the Upper Deer Trail area. Once the limits of mineralization are established, work can begin to further define those zones by diamond core drilling. This initial phase of drilling is considered merely a starting point in generating data for pre-feasibility and feasibility studies for the Deer Trail Mine operations.

The most upper holes RC-1 through RC-7 were placed well above the elevation of the known workings of the No. 2 Tunnel and slightly south of the northwesterly trending ore channel. Significant mineralization was intercepted in holes RC-1 and RC-2, which were drilled in the area closest to the main ore channel.

Drill holes RC-5, 6, 8, 9, 13 and 14 were all drilled well south of the historically delineated mineralization, and on the southern most up-side of a post mineral fault. It can be concluded that mineralization intercepted in these holes is not directly related to the mineralization of the main Upper Deer Trail ore channel.


Hole	Interval From – to-- (ft)	Gold (grams/troy oz.)	Silver (grams/ Troy oz.)	Lead (%)	Zinc (%)

RC-1	190 – 230 40	0.207	10.98	0.355	0.205

RC-2	40 - 45 5	0.364	95.36	3.61	0.390

Includes	175 - 180 5	0.369	45.71	2.87	1.41

RC-10	65 - 95 30	0.363	16.48	0.086	0.022

RC-11	60 - 70 10	1.36	52.25	0.758	0.191

Includes	65 - 70 5	2.26	32.69	0.961	0.289

RC-12	85 - 90 5	0.460	137.14	3.94	1.00

RC-17	55 - 65 10	0.799	13.02	0.033	0.012

RC-18	45 - 50 5	1.54	40.77	0.154	0.018

RC-19	0 – 140 140	0.527	14.65	0.116	0.107

Includes	35 - 45 10	2.64	14.11	0.840	1.26

Includes	35 - 40 5	4.66	21.15	1.30	2.14

Includes	75 - 120 45	0.930	34.86	0.135	0.021

Includes	95 - 105 10	3.17	88.63	0.303	0.019

Includes	100 – 105 5	4.78	151.02	0.682	0.008

RC-20	95 – 100 5	1.92	62.02	0.218	0.030

RC-21	95 - 110 15	0.899	74.29	0.145	0.014

RC-22	110 - 120 10	1.77	18.14	0.074	0.024

Includes	115 - 120 5	3.25	27.52	0.079	0.014

In early 2005, Deer Trail Mining Company contracted with Connors Drilling to commence an underground diamond core drill program. This 2nd phase of exploratory drilling inside the PTH Tunnel of the Deer Trail Mine has been completed. The Phase II underground diamond core drilling program was primarily designed to target known horizons of mineralization and identify new mineralized horizons throughout the main ore channel of the Deer Trail Mine. The Company completed 7,235 feet of diamond core drilling and finished 13 underground drill holes. According to preliminary reports by the Company’s geologist, all of the holes drilled were reported to intersect mineralization within their designated targets. That report states that a total of approximately 514 feet of mineralization was intersected and consisted mostly of sulfide minerals (e.g. tetrahedrite, galena, pyrite, chalcopyrite and sphalerite). Other intercepts were encountered through oxidized mineral not reported in this total, as well as zones of subtly altered rock that may contain high mineral values and offer significant potential. The company is now working on final independent core logging and splitting verification. Once complete, it plans to ship its core samples to an independent lab for analysis.

In March 2006, Deer Trail Mining Company, LLC entered into an agreement with Behre Dolbear and Company (USA), Inc. to conduct geological services and consulting at Unico’s Deer Trail Mine in Marysvale, Utah. The focus of Behre Dolbear’s work is related to the underground diamond core drilling program undertaken at the Deer Trail Mine in 2005. Behre Dolbear is currently performing the geological core logging and spitting verification on the samples and overseeing the shipment of those samples to ALS

Chemex for analysis. Behre Dolbear has also been contracted to report on the mineralization and provide additional technical advice on the project as desired by Deer Trail Mining Company, LLC.

Behre Dolbear and Company (USA) has issued the following information from the Interim Summary Report on their work completed thus far. The report from Behre Dolbear states:

“Unico, Incorporated drilled 7,235 feet of BQ diameter core at various inclinations and azimuths from four drill stations in the Patrick Thomas Henry (PTH) adit at the Deer Trail Mine from December 2004 to April 2005. At that time, the core was not logged in detail and no analyses were done. Table 1 summarizes the drilling statistics. The station locations are defined based on the approximate footage from the PTH adit portal.

Table 1

Unico Phase II Drill Holes


UDDH Drill Hole #	Station Location	Inclination (in degrees)	Azimuth	Total Length (Feet)
1*	4400	-45	102	740
2	4400	-40	102	648
3*	4400	-42	92	782
4*	4400	-42	150	554
5*	4400	-55	102	664
6	4400	-45	21	409
7	4400	-58	298	733
8	4400	-75	300	565
9*	4700	-45	116	460
10	4900	-75	0	460
11*	3400	+45	258	454
12*	3400	+45	162	355
13*	3400	-65	125	420
Total Footage				7,235

*Logged by Behre Dolbear

Behre Dolbear & Company (USA), Inc. (Behre Dolbear) contracted with Unico in March 2006 to geologically log the core, select intervals for analyses and assays, supervise the sawing of the selected intervals, submit those samples to a laboratory for analyses, opine on the mineralization observed, and provide technical advice to Unico. Between March 23, 2006 and October 6, 2006, Behre Dolbear logged in detail 4,429 feet of core from the eight holes indicated in Table1. A total of 550 samples totaling 611 feet of core containing trace to significant mineralization from six of the holes (UDDH 1, 5, 9, 11, 12, and 13) has been selected, sawed, submitted for analyses and assays, and the results received and evaluated. Analyses are pending from 228 samples from 385 feet of core in UDDH 3. UDDH 4 has been logged, but sample intervals have not been selected.

ALS Chemex (Chemex) did the analyses and assays at its laboratory in North Vancouver, British Columbia. Sample preparation, analyses, and assays were done as requested by Behre Dolbear using Chemex’s standard protocols. Gold was determined by fire assay with an atomic absorption spectrometry (AAS) finish. All samples were also analyzed for a 34-element suite of major and potentially significant trace elements using an aqua regia digestion and an emission spectrographic scan. Chemex’s quality control-quality assurance system complies with the requirements of the international standards ISO 90001:2000 and ISO17025:1999.

The Pennsylvanian Callville Limestone is the host of the mineralization in the holes logged by Behre Dolbear at the Deer Trail Mine. Behre Dolbear has logged over 4,400 feet of core that traverses the various lithologies of the upper +700 feet of that formation. This detailed logging has resulted in the recognition of ten previously unrecognized informal members and/or other subdivisions that will enable future work to place the mineralized horizons in the vicinity of the mine into stratigraphic perspective.

The mineralization in the Callville Limestone typically consists of stratabound narrow conformable bands of semi-massive to massive sulfides separated by relatively long intervals of weakly mineralized to barren rock. Ore minerals include sphalerite, galena, chalcopyrite, and tetrahedrite-tennantite. Where the significantly mineralized zones are thicker, the mineralized bands are closer together.

Based on the analytical results received to date, Behre Dolbear combined 33 continuous assay intervals from six holes into gross assay intervals ranging from 2.3 feet to 95 feet in length, uncorrected to true stratigraphic width. Intervals within the gross intervals were combined into 113 detailed intervals based on their grades.

The best intervals based on thickness and grades in multiple metals in the six holes from which analyses have been received are listed in Table 2.

Table 2 shows that significant mineralization in most of the holes is confined to relatively narrow intervals ranging from 1.0 feet to 10.6 feet. The thickest intercept with significant mineralization is in UDDH 12 at 55.2 feet. The intervals are uncorrected for the true widths of the intercepts and will all be thinner than stated, some possibly as much as fifty percent thinner. Overall, silver contributes the most value of the metals in Table 2 with zinc second and gold, copper, and lead contributing subordinate values. In some of the intervals, the silver and gold are high but the base metals are low. Copper contributes more value than zinc in some of these intervals. Only one of the intervals (UDDH 11 at 105.0 to 110.6 feet) has high values in all of the metals. The highest gold and silver values are in UDDH 1 (5.273 ppm Au=0.167oz/t Au; 366.9 ppm Ag= 10.71 oz/t Ag), and UDDH 11 (4.564 ppm Au= 0.133 oz/t Au; 585.1 ppm Ag= 17.08oz/t Ag).

Table 2

Best Interval from Each Analyzed Hole


UDDH	Analyzed From	Analyzed To	Interval (Feet)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
1	365.5	370.4	4.9	5.723	366.9	0.01	0.16	0.42
	406.6	417.2	10.6	1.062	177.6	0.11	0.58	1.58
	456.0	462.5	6.5	0.350	156.4	0.24	1.38	2.08

5	322.0	327.0	5.0	0.870	164.1	0.25	2.09	1.27
	419.0	419.9	0.9	1.510	116.0	0.27	0.35	0.18

9	293.7	300.1	6.4	0.372	46.8	0.15	1.28	1.78
	434.6	435.6	1.0	0.310	102.0	0.39	5.20	6.59

11	7.7	13.4	5.7	4.564	585.1	0.45	0.71	0.83
	105.0	110.6	5.6	1.600	550.6	0.96	2.0	2.43

12	5.8	61.0	55.2	0.608	183.1	0.44	0.40	0.67
	220.0	221.9	1.9	2.170	128.0	0.01	0.01	3.32

13	77.9	78.9	1.0	0.380	188.0	0.60	3.10	3.89

There is potential for an economic deposit at the Deer Trail Mine if the metals occur together in significant grades and in widths (generally greater than 10 feet) that are adequate for mining. Additional work is required to determine if those conditions exist. Before additional drilling is done, the results of the logging, analyses, and observations by Behre Dolbear should be combined with the data and results from previous work to develop a three-dimensional model of the deposit. Development of that model will require data from surface and underground mapping, previous mining, and drilling from this and previous campaigns. All of this data on lithologies, structures, mineralization, and alteration must be put together on maps and cross sections to build the model. Based on that model, the geometry (true widths and lateral extents) and grades of the mineralization as currently known will be indicated and decisions can be made if additional drilling has the potential to define economically mineable mineralization. It has not been determined if there is adequate data available from previous work to construct a good model.”

In November 2006, Deer Trail Mining Company modified and expanded the agreement with Behre Dolbear and Company (USA), Inc. forgeological services at Unico’s Deer Trail Mine. The new agreement and work order addsseveral new areas of consulting that will fall under Behre Dolbear’s scope of services on the Deer Trail project. Under these new revisions Behre Dolbear will assemble all the available data relating to the locations, volumes, and grades of the tailings that Deer Trail intends to process through the Project's mill. Based on the information available, Behre Dolbear will estimate the volumes, tonnages, and grades of those tailings and will, if needed, recommend a drilling program to better define those tonnages and grades. Behre Dolbear will summarize the results of the drill core logging completed to date and correlate those results with pertinent assays of material from those holes to determine the factors from the logging that relate to and facilitate the location of significant mineralization. With Deer Trail's assistance, Behre Dolbear will assemble all the available data (mineralization, rock types, structure, alteration, etc.) from past drilling and mining, focusing on the 3100-3400 zone in the PTH adit, i.e., the 3400 East Stope and 3400 East Stope Extension, which is the zone most

easily accessible for near-term mining. Behre Dolbear will correlate data from the extant logging effort and assays with the data from past drilling and mining to locate and model, to the extent possible, potentially mineable mineralization in the 3100-3400 zone. Behre Dolbear will determine if logging of the holes not yet logged in the 4400 zone of the PTH adit is warranted, based upon the logging to date of holes in that zone and any available data from past drilling and mining. Behre Dolbear will assist Deer Trail with judgments and potential approaches to exploitation of the Toroweap Sandstone in the 8600 area of the PTH adit. (It appears that this area has the greatest potential for hosting high grade, large tonnage mineralization at the Deer Trail Mine. That area is, however, the portion of the existing workings that is least accessible for mining in the near term.) The agreement calls for additional personnel and support for Behre Dolbear’s work at the Deer Trail Mine. Further, the modifications call for reorganizing and redirecting site efforts that have heretofore focused specifically on the logging, chemical analyses, and interpretation of the drill cores. Behre Dolbear will focus on those aspects of the expanded work scope that will most quickly lead to the definition and potential reporting of ore reserves in the form of mine tailings. They will also focus strongly on the development of mineralization models that facilitate judgments regarding the 3100-3400 area of the PTH adit and the timing of work in the 8600 area.

On May 14, 2008, Behre Dolbear & Company (USA), Inc. sent Unico, Inc. and Deer Trail Mining Company, LLC a proposed final report and appendices on Project J06-034 regarding the Relationship of Stratigraphy and Mineralization at the Lower (New) Deer Trail Mine. Upon approval by Unico, Inc and DTMC, LLC, submission of the report and appendices will complete the work relating to the core logging that Behre Dolbear, Unico and Deer Trail Mining Company have agreed upon in the Proposal and Consulting Agreement dated March 14, 2006 and the Work Change Order dated November 7, 2006. The report entitledEvaluation of the Deer Trail Tailings at the Deer Trail Mine, Piute County, Utahhas been removed from the revised report and a Conclusions and Recommendations section will be added in the Executive Summary which will be revised accordingly by Behre Dolbear. Executives and Management of Unico and Deer Trail Mining Company are currently reviewing the report and expect to announce details of the report once completed.

In September 2007, Deer Trail Mining Company completed the construction of a new electrical substation that will supply power to the reconstructed mill and processing facility. The substation is designed to supply up to 2.5 megawatts of electrical power well beyond the estimated 1.5 megawatts estimated to run the mill and processing facility. Additional power is expected to be used for future mining activities and expansion plans on site. The Company recently completed the construction of a secondary substation to interface directly with the mill and processing facility and it is now energized.

In February, 2008, the Deer Trail Mining Company completed underground rehabilitation work up through to the 3400 level of the PTH tunnel of the Deer Trail Mine. The work was contracted through Atlas Mining Company to conduct initial underground maintenance including the replacement of timber sets, clean up of the main haulage way and installation of ground support where needed to the main PTH haulage tunnel.

In April, 2008, the Deer Trail Mining Company completed reconstruction work of the floatation circuit at the mill and processing facility at the Deer Trail Mine. Testing of the floatation circuit is currently underway utilizing screened material from the stockpiles on site.

Silver Bell Mining Company, Inc.

Silver Bell Mining Company, Inc. was incorporated in the State of Utah on April 26, 1993. It has acquired 26 patented mining claims located in American Fork Canyon, Utah County, Utah, which is organized into three separate parcels. The claims contain mining properties that have not been mined for production since 1983. The properties were mined primarily for silver, lead and zinc. There are no known, proven or probable reserves on the property.

Silver Bell Mining Company conducted some exploration work on the Silver Bell Mine through 2004. Silver Bell Mining Company plans to conduct a feasibility study in order to analyze the claims prior to commencing any future mining activities on the claims. Silver Bell Mining Company anticipates that any future ore mined from the Silver Bell Mine will be transported to the Deer Trail Mine site where it can be further processed. Silver Bell Mining Company may also seek a joint venture mining partner to jointly develop the Silver Bell Mine. Silver Bell Mining Company anticipates that any ore mined from the Silver Bell Mine will be transported to the Deer Trail Mine site where it will be crushed and milled.

In August 2006, Silver Bell Mining Company reached a preliminary agreement for a joint venture with the Polymet Company, LLC for mining at the Silver Bell Mine and executed a letter of intent. A subsequent definitive agreement to finalize the details of the joint venture was expected to be signed by August 31, 2006. However, the parties failed to reach a definitive agreement, and the parties are no longer involved in negotiations.

Bromide Basin Mining Company, LLC

On July 20, 2001, Unico entered into a Mining Lease and Option to Purchase with Kaibab Industries, Inc., an Arizona corporation. The parties then entered into a Revised Mining Lease and Option to Purchase in April 2003 (the "Revised Kaibab Mining Lease"). Following the formation of the Bromide Basin Mining Company in June 2004, Unico assigned all of its assets, liabilities and operations associated with the Bromide Basin Mines to Bromide Basin Mining Company. A Second Revised Mining Lease and Option to Purchase was entered into with Bromide Basin Mining Company in May 2005 which expired November 1, 2005. Effective May 1, 2006, the parties entered into a Third Revised Mining Lease and Option to Purchase (the “Third Revised Mining Lease”). At that time Unico paid approximately $63,592 to Kaibab Indutries, Inc. for past due lease payments, taxes and BLM fees. Under the Third Revised Mining Lease, Kaibab Industries, Inc. leased to Bromide Basin Mining Company certain mining claims located in the Henry Mountain Mining District in Garfield County, Utah containing approximately 400 acres, which included the Bromide Basin Mines. The Third Revised Mining Lease granted to Bromide Basin Mining Company the option to purchase six (6) fully permitted patented mining claims and twenty-one (21) located mining claims comprising in all over 400 acres of Bromide Basin in the Henry Mountain Mining District located in Garfield County, Utah. The option exercise price was $835,000 for all specified mining claims, mill sites and dumps being leased. The lease was extended until October 31, 2007 at which time it expired. The Company has chosen not to extend it or pursue the purchase option.

The Company has concluded its evaluation of the property, and has determined that the leased premises outlined under the Kaibab Mining Lease is not feasible for large scale mining activities by Bromide Basin Mining Company, and will not exercise its purchase option with Kaibab Industries.

Plan of Operation

During the next 12 months, the Company’s plan of operation is to raise approximately $2,500,000 for investment into two of its subsidiary companies: Deer Trail Mining Company and Silver Bell Mining Company. The funds are intended for the following purposes during the next twelve months:

Complete analytical certification by independent lab, ALS Chemex, and final reporting from consulting firm, Behre Dolbear & Company (USA), on the logging and shipment of core samples identified and taken from the completed 2^nd phase of exploratory drilling at the Deer Trail Mine;

Continue sampling and analyzing mineralized rock samples, stockpiles and dump material from the Deer Trail Mine to evaluate the most efficient means to conduct future mining and milling activities;

Expand metallurgical research department at the Deer Trail Mine and Mill Facility;

Purchase additional lab equipment for metallurgical purposes;

Upgrade mine infrastructure and begin underground mining activities including maintenance and rehabilitation work at the Deer Trail Mine;

Continue to upgrade and complete the re-construction project on the existing mill at the Deer Trail Mine;

Upgrade the crushing facility at the upper Deer Trail Mine and continue screening the ore dumps;

Begin milling and processing activities at the Deer Trail Mill and Processing Facility;

Acquire new mining equipment to improve operations at the Deer Trail Mine;

Conduct additional survey and mapping work on the Clyde and Crown Point mining claims including improvements to the property and potentially underground and surface exploratory drilling on the claims; and

Commence a feasibility study on the potential of the mining claims at the Silver Bell Mine beginning in the Summer of 2008.

Smelting and Refining

All of the smelting and refining of ore will be handled by other companies. Smelters capable of handling the Deer Trail concentrates include the Cominco Lead and Zinc smelters in Trail, British Columbia, Canada, and the Grupo Mexico (formerly Asarco) smelter in Torreon, Mexico. Occasionally, high grade copper-silver concentrates may be sent to the Noranda smelter in Belledune, New Brunswick, Canada.

Dependence on Metal Prices

Unico's mining activities will be largely dependent on metal prices. The prices may fluctuate on the world commodity markets and will be beyond the influence of Unico. A substantial reduction in the price of metals might impede Unico's ability to economically mine or to raise additional capital. Similarly, recent increases in metal prices have been beneficial to mining companies, and may increase Unico's ability to acquire new capital.

Competition

Unico competes with many mining companies in the U.S. and throughout the world. The majority of Unico's competitors are much larger and better financed than Unico. Some of Unico's competitors have closed mining operations in past years due to low metal prices. Some mining operations have been consolidated through mergers or other acquisitions. Recent increases in metal prices have helped mining companies in expanding operations and in their efforts to acquire new capital.

Employees

During the fiscal year ended February 29, 2008 the Company and its subsidiaries had a total of 21 employees. Through its subsidiaries, the Company had 18 full time employees, 1 part time employee and 4 consultants. The full time employees include a general manager, senior engineer/mine manager, metalurgist and geologist. Unico believes the number of employees may increase to approximately 30 within the next twelve months. In the event the mining operations are successful, additional employees may be added in the future.

During the fiscal year ended February 29, 2008, the Company ended its agreement with Javelin Advisory Group to provide administrative support for a monthly fee of $10,000 and added a full time CFO.

Governmental Regulation

Mining and/or processing activities are subject to numerous permitting and environmental laws and regulations administered by active federal, state, and local authorities, particularly the Utah Division of Oil, Gas and Mining. Although the permits necessary for mining operations on the patented and unpatented Deer Trail Mine claims and on the patented Silver Bell Mine claims have already been obtained, Unico may be required to expand such permitting in order to fully develop the properties. In order to obtain expanded permits, it may be necessary to gather and analyze baseline data, complete environmental assessments or environmental impact statements with appropriate steps to mitigate potential adverse impacts, and modify the proposed plans in order to accommodate environmental impacts, all of which may take an indeterminate amount of time to complete.

The mining operations are regulated under the jurisdiction of the Mine Safety and Health Administration or "MSHA" to some degree to insure safe operations. Without proper training of personnel and compliance to all MSHA rules, the mine could be subject to heavy fines and closure. Unico strives to comply with MSHA regulations and maintain a good working relationship with MSHA. The mining operations are subject to periodic inspections by MSHA which, depending on the outcome of an inspection, could curtail production until any violations have been cured.

During approximately the last two years Unico has received some minor citations from MSHA and fines have been assessed. Unico is current on its payment obligations with respect to outstanding fines.

Cost and Effect of Compliance with Environmental Laws

Environmental regulations and guidelines have been established by state and federal agencies to insure that the environment is not permanently adversely impacted. Deer Trail Mining Company presently has $215,799 in reclamation bonds with the U.S. Forest Service and the Utah Division of Oil, Gas and Mining. As Unico expands its operations it will become necessary to comply with further regulations for larger operations and more bonding will be required from time to time. Permitting will be an ongoing function of Unico's operations.

Compliance with the Sarbanes-Oxley Act of 2002

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). The Sarbanes-Oxley Act imposes a wide variety of new regulatory requirements on publicly held companies and their insiders. Many of these requirements will affect us. For example:

Our chief executive officer and chief financial officer must now certify the accuracy of the financial statements contained in our periodic reports;

Our periodic reports must disclose our conclusions about the effectiveness of our controls and procedures;

Our periodic reports must disclose whether there were significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses; and

We may not make any loan to any director or executive officer and we may not materially modify any existing loans.

The Sarbanes-Oxley Act has required us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the new regulations promulgated thereunder. We will continue to monitor our compliance with all future regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.

Code of Ethics and Audit Committee Charter

The Board of Directors of the Company adopted a Code of Ethics and an Audit Committee Charter.

The Code of Ethics applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote:

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

Full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Company;

Compliance with applicable governmental laws, rules and regulations;

The prompt internal reporting of violations of the Code; and

Accountability for adherence to the Code.

Unico’s code of ethics was filed as an exhibit to Form 10-KSB for the year ended February 28, 2006.

The primary responsibility of the Audit Committee is to oversee the Company's financial reporting process on behalf of the Company's Board of Directors and report the result of their activities to the Board. Such responsibilities shall exclude but shall not be limited to, the selection, and if necessary the replacement of the Company's independent auditors, review and discuss with such independent auditors and the Company's internal audit department (i) the overall scope and plans for the audit, (ii) the adequacy and effectiveness of the accounting and financial controls, including the Company's system to monitor and manage business risks, and legal and ethical programs, and (iii) the results of the annual audit, including the financial statements to be included in the Company's annual report on Form 10-KSB. Uinco’s audit committee charter was incorporated by reference from the Company’s Annual Report on Form 10-KSB for the Year Ended February 28, 2005 filed on June 20, 2005.

ITEM 1A.

RISK FACTORS

Smaller reporting companies are not required to provide the information specified by this item.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.

DESCRIPTION OF PROPERTY

Deer Trail Lease

On March 30, 1992, Deer Trail Mining Company, LLC entered into a Mining Lease and Option to Purchase agreement with Deer Trail Development Corporation, with headquarters in Dallas, Texas. Deer Trail Development Corporation is now known as Crown Mines, L.L.C. The lease was to run for a period of 10 years, and cover 28 patented claims, 5 patented mill sites and 171 unpatented claims located approximately 5 miles South of Marysvale, Utah. It included mine workings known as the Deer Trail Mine, the PTH Tunnel and the Carisa and Lucky Boy mines. The lease was extended several times prior to the Company’s purchase of the claims in July 2007.

Crown Mines, L.L.C. also retained an access easement and a water line pipeline easement across the claims sold to Deer Trail Mining Company.

The Deer Trail claims are located in the Tushar Mountains of East Central, Utah in the Mount Baldy and Ohio Mining districts. They are located on Deer Trail Mountain, approximately 5 miles South of Marysvale, Utah and are accessible by a gravel county road which is in good condition. There are no known, proven or probable reserves on the property.

The Deer Trail ore body was first discovered by deer hunters in 1878. The ore body originally cropped out at the surface. It is estimated that between 1878 and 1917, about 10,000 tons of ore were mined. A small mill was installed in 1918, and between 1918 and 1923 the mine produced about 138,000 tons of predominately oxidized ore averaging 1.38 opt gold, 11.49 opt silver and 3.26% lead. Zinc and copper were not recovered. In 1923, mining was suspended when the workings encountered a fault that cut off the ore,

and for more than 20 years production was limited to drawing stopes and removing pillars. In 1945, the PTH tunnel was started to explore for the faulted extension of the Deer Trail ore body. The 3,400 ore body was encountered unexpectedly by this tunnel and a total of 5,000 tons of ore averaging 2.84% lead, 0.76% copper, 6.26% zinc, 15.17 opt silver and 0.19 opt gold were shipped. By 1964, the PTH tunnel had intersected the offset part of the Deer Trail ore body. From 1964 until 1981 this segment of the ore body produced over 100,000 tons of unoxidized sulfide ore averaging 5% lead, 0.6% copper, 12% zinc, 15 opt silver, and 0.10 opt gold. The present working face is still in ore.

The PTH Tunnel penetrates more than 10,000 feet with a developed network of tunnels, shafts and raises at the 3,400 foot area and at the 8,000 foot area and was mined extensively for gold and silver for about 20 years. The timbered and ventilated tunnel includes more than two miles of track for ore cars accessed through a covered entrance structure.

The mine facilities also include ore cars, battery operated engines, an engine storage and charging house, an electric power substation, a miner's locker room, a compressor building, a 1,000 gallon underground gasoline storage tank with gas pump, two front end loaders, three dump trucks and a general office, two fully operational labs and a core sampling facility. Deer Trail Mining Company believes water is accessible to the site.

The Deer Trail mining property was developed by the Deer Trail Development Corporation, now known as Crown Mines, LLC, located in Dallas, Texas. The property has been leased out several times since production ceased in 1981 and is presently owned by Deer Trail Mining Company, LLC. There has been little production since then. Several major mining companies have explored the property. These include Noranda, Phelps Dodge and Goldfields. One smaller company drilled and analyzed the mill tailings from the upper Deer Trail Mine area in 1990. The results of the drilling and other tests were not conclusive, and at present there are no known proven or probable reserves on the claims.

Unico leased the property effective June 1, 1992. Unico has produced a few small lots of ore from the stopes in the 8600 area of the PTH tunnel for testing and evaluation purposes, and has developed several excellent targets within those workings. In April 2001, Unico began limited mining operations which were concentrated in the 3400 area of the mine until underground mining operations temporarily stopped in October 2003. Unico transferred all rights and obligations to the Deer Trail Mining Company in June 2004. Deer Trail Mining Company purchased the claims in July 2007, and is the current owner and operator of the Deer Trail Mine. Deer Trail Mining Company resumed underground mining operations at the Deer Trail Mine in late 2004. Underground mine operations have focused on infrastructure improvements during this past fiscal year along with continuing the exploration, testing and development of mineable reserves.

Deer Trail Mine Geological Information

The Deer Trail mine workings expose westerly dipping sedimentary rocks of three units: the Toroweap and Queantoweap Formations and the Callville Limestone. The Deer Trail ore body is in the lower part of the Toroweap Formation and consists of a nearly continuous group of semiconcordant replacement bodies flanking a central vein. About half of this ore body is exposed in the Old Deer Trail mine workings and is oxidized; the other half is located in the 8600 area workings and consists of unoxidized sulphide ore. The Queantoweap Formation, which underlies the Toroweap, is a quartzite and hosts no known mantos. The underlying Callville Limestone contained the 3400 ore body.

The Toroweap Formation exposed in the 8600 area consists of a wide range of interbedded lithologies, including quartzite, limestone, dolomite, shale, and chert, which form 50 or more recognizable units ranging in thickness from a inch to several feet. In contrast, the underlying Queantoweap Sandstone consists of a fairly uniform medium-grained, well-sorted massive quartzite.

The Calville Limestone in the Deer Trail mine lacks marker beds, and lithologic facies change rapidly. The rocks are cut by several faults of unknown displacement. The marked lateral variations in lithology have made it possible to identify only seven correatable stratigraphic assemblages. The upper 240 feet of the Callville Limestone in the 3400 area consists dominantly of mudstones containing quartz silt, evaporite nodules, and sponge spicules. Below 240 feet, dolomite containing microfossils and peloids is abundant and evaporites are absent. In the 8600 area, the Callville has been observed in drill core and there it contains thick beds of course-grained anhydrite.

The Toroweap Formation in the mine area strikes generally north-south and dips 201 W. The Deer Trail ore body rakes across this inclination with a bearing of N 701 W, so the average plunge of the ore zone into Deer Trail Mountain is about 181.

The mantos in the Old Deer Trail mine workings closely followed the axis of the Deer Trail anticline, a relationship that was used to guide development. In the 8600 area, however, the mantos and the anticline axis diverge and the deepest workings are about 1500 feet apart.

The Deer Trail ore body consists of a semicontinuous group of narrow, elongate strata-bound replacement bodies developed adjacent to a central vein. The ore body has a sinuous ribbon like shape in plain view and has been mined for a length of approximately 5,525 feet over a width averaging 32 to 38 feet and a height averaging about 15 to 30 feet.

A set of cross faults that trends east-northeast and dip steeply to the north are exposed in the mine workings in the 8600 area. These have an aggregate stratigraphic throw of about 150 feet, down to the north. One of these faults is the 18 Drift fault or 18 North fault. These faults are now occupied by quartz veins as much as 15 feet thick that contain substantial quantities of lead, zinc, arsenic, silver, gold, copper and molybdennum. The 18 north fault consists of quartz with good values in gold, silver and copper with very little other metals which could possibly be marketed to smelters as a flux.

Deer Trail Mine Workings

The mine workings at the Deer Trail consist of the upper Old Deer Trail mine workings and the PTH tunnel mine workings. The Old Deer Trail mine consists of three levels, approximately 100 vertical feet apart. The first level was first accessed from the surface through the discovery shaft of 1878, with several adits interconnecting from the surface. The second level or the No. 2 Tunnel level is accessed through one known tunnel and consists of several large stopes interconnected with a series of drifts, winzes, and raises. The third level or the No. 3 Tunnel level was used as a haulage tunnel and was the main level of the Old Deer Trail mine. It consists of drifts and raises all accessed by 18" narrow gauge track. The present workings are only partially accessible. Many drifts have caved. All three levels are interconnected allowing for good ventilation.

The PTH Tunnel workings underlie the Old Deer Trail workings by approximately 450 feet and accessed 4,000 feet to the south. The PTH Tunnel was started in 1945 to intersect the faulted Deer Trail ore body. It is a 5'x7' tunnel that extends over 10,000 feet into Deer Trail Mountain. Almost all areas of these workings are accessed by 18" narrow gauge track. The tunnel trends to the north-northwest paralleling the base of Deer Trail Mountain. At approximately 3,400 feet the tunnel intersected unexpectedly mineralization in the Callville Limestone. This mineralization was developed on the PTH Tunnel level as well as two levels below 100 vertical feet apart. Bedded mineralization associated with the Wet Fault was produced via a series of drifts, winzes, stopes and raises. A ventilation/escape shaft was driven to the surface in this area. The tunnel next encountered mineralization at approximately 8,600 feet, where the tunnel encountered the continuation of the Deer Trail ore body. Several thousand feet of drifts was driven to explore and exploit the deposit. An internal shaft was driven 250 feet to gain access to the shallowing dipping ore where three more levels were established. Again several hundred feet of drifts, stopes, raises and winzes were driven to mine the ore body.

Water was encountered in the 280 winze and pumps were installed in order to continue mining. Mining was stopped in 1981 due to lack of processing and smelting facilities. The present face in the 280 area is still in ore. The width of the face was increasing as well as the value of the ore. A raise to connect the PTH workings with the Old Deer Trail Mine was started located approximately where the PTH Tunnel crossed the 18 North fault. It is presently up 140 feet.

Deer Trail Mine Mineral Resources

The resources have been outlined above. However, further efforts to increase the mineable resources of the mine are being explored. Deer Trail Mining Company completed phase one which included a reverse circulation exploratory drill program in the upper Deer Trail Mine area. Deer Trail Mining Company also completed a second phase of underground diamond core drilling conducted in the PTH Tunnel of the Deer Trail Mine, which began in first quarter of 2005 to attempt to prove up reserves. Deer Trail Mining Company is also evaluating ways to mine more efficiently in order to mine lower grade ores economically. Deer Trail Mining Company is evaluating whether cyanide may be used in processing its ore. Deer Trail Mining Company acquired two heavy media separators. The heavy media separator is a method whereby low grade material can be upgraded underground. Areas left undeveloped in the mine due to the amount of waste rock between narrow mineralized beddings might effectively be produced by using heavy media separator technology.

The Deer Trail deposit is similar to many deposits in Utah, such as Tintic and Park City, where mine reserves were drilled approximately two years ahead of production due to the nature of the deposits and the costs involved in drilling out entire reserves before mining began. It is planned that reserves in the Deer Trail will be established two to three years ahead of production. Exploration drilling will be conducted in conjunction with mine production. Several prospective targets will be drilled from underground as the workings advance.

To date only two known mineralized horizons have been exploited. Deer Trail Mining Company believes the underlying formations contain very favorable horizons for mineralization, but they have yet to be tested. Deer Trail Mining Company believes the potential is excellent that more mineralization will be discovered.

Deer Trail Mining Company's Purchase of 680 Acres Near the Deer Trail Mine

On August 28, 2000, Unico purchased approximately 680 acres of raw ground located in Piute County, State of Utah for $200,000. This land is adjacent to the existing Deer Trail Mine property owned by Unico which is currently operated by the Deer Trail Mining Company. The property was purchased from Tech-Sym Corporation of Houston, Texas.

Deer Trail Mining Company purchased the property for the purpose of establishing a mill site on the property and to use as a place to store waste rock from mining operations, and for other general mining and business purposes.

In June 2002, this property was encumbered by a trust deed securing a loan in the amount of $200,000 which was used to finance general operations of Deer Trail Mining Company. On June 25, 2004, the balance and accrued interest related to this debt was repaid through the issuance of common stock.

Silver Bell Mine

On December 6, 2000, Unico acquired all of the issued and outstanding shares of stock of Silver Bell Mining Company, Incorporated, a Utah corporation, in consideration for the issuance of 3,000,000 restricted shares of Unico common stock. In June 2002, all of the Silver Bell Mining claims were encumbered by a trust deed securing a loan in the amount of $350,000 which was used to finance general operations of Silver Bell Mining Company, Incorporated. On June 25, 2004, the balance and accrued interest related to this debt was repaid through the issuance of common stock.

Silver Bell Mining Company, Incorporated was incorporated in the State of Utah on April 26, 1993. It has acquired 26 patented mining claims located in American Fork Canyon, Utah County, Utah, which is organized into three separate parcels. The claims contain mining properties which have not been mined for production since 1983. The properties were mined primarily for silver, lead and zinc. There are no known, proven or probable reserves on the property.

The Silver Bell deposit was first discovered in 1871 by soldiers stationed at Fort Douglas in Salt Lake City. Mining was confined to select high grade ores averaging 100 ounces per ton in silver. The workings consisted of an adit and a winze and ore was lowered down the mountain by means of a cable and rail system. The mine was enlarged to accommodate larger equipment in 1980 and some ore was produced which averaged 22 ounces in silver per ton of ore. The deposit consists of a single fissure or vein known as the Silver Bell fissure which averages six feet in width and dips to the NW at 62 degrees. It has been exposed for over 300 feet in depth and over 1,200 feet of strike length. Associated with the fissure several mineralized horizons (mantos) have been encountered. Recent independent sampling done by Watts, Grifiths, and McQuat and others demonstrate that the mantos are far richer than the vein mineralization with values as high as 120 ounces per ton silver. The deposit contains both oxide and sulphide ore rich in silver, lead, zinc and copper. The sulphide mineralization contains more values than the oxides. The mineralized system is located within the Maxfield cambrian limestone unit and extends down through the Ophir units into the Tintic Quartzite. There is presently an estimated resources of over 100,000 tons.

Silver Bell Mining Company conducted some exploration work on the Silver Bell Mine in Summer, 2003 through 2004. Silver Bell Mining Company plans to commence an exploration and resource definition program at the Silver Bell Mine during Summer, 2006. Silver Bell Mining Company may also seek a joint venture mining partner to jointly develop the Silver Bell Mine. Silver Bell Mining Company anticipates that any ore mined from the Silver Bell Mine will be transported to the Deer Trail Mine site where it will be crushed and milled.

Bromide Basin Mines

On July 20, 2001, Bromide Basin Mining Company, LLC entered into a Mining Lease and Option to Purchase with Kaibab Industries, Inc., an Arizona corporation, covering certain mining claims at the Bromide Basin Mines. The lease was renewed several times until it expired on October 31, 2007. The Company has decided not to renew the lease or exercise its purchase option.

The primary purpose of the agreement was to allow Bromide Basin Mining Company access to the claims to conduct an extensive preproduction feasibility study prior to any additional mining production and to analyze the potential of the claims before exercising its purchase option from Kaibab Industries. It has been determined that the mine is not suitable for a large scale mining operation by the Company, and the Company will not renew the lease or exercise its purchase option.

Purchase of Mining Equipment

In April 2003, Unico purchased certain mining equipment from Kaibab Industries, Inc. for $165,000. To pay for the equipment, Unico executed a promissory note which Unico and Bromide Mining Company, LLC have collectively assumed liability to make payments of $2,000 per month, this promissory note was extended until July 1, 2005. The promissory note was paid in full in April 2006 when Unico paid approximately $125,785 to Kaibab Industries, Inc. All of this mining equipment was moved to the Deer Trail mine where it is being used.

Principal Offices

Our principal offices are located at 8880 Rio San Diego Drive, 8^th Floor, San Diego, California 92108. We lease on a month-to-month basis at a rate of US $4,602 per month. We believe our office space is suitable for our needs for the foreseeable future.

ITEM 3.

LEGAL PROCEEDINGS

During the fiscal year ended February 29, 2008, the Company settled six lawsuits filed in the Twelfth Circuit (State) Court in Florida stemming from defaulted convertible debentures totaling $1,025,000 and $36,406 of interest. Unico agreed to settle all of the actions by issuing a total of 3,926,315,790 shares of its common stock to the plaintiffs These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, after a hearing with notice to, and an opportunity to be heard from, interested parties, as to the fairness of each transaction, by a state court in Florida which specifically determined, prior to declaring that the transactions were exempt under Section 3(a)(10), that the transactions were fair to the interested parties.

The Company scheduled a special meeting of its shareholders on December 21, 2007 at which shareholders were to vote on a proposal to amend the Company’s articles of incorporation to authorize the Company’s board of directors, in its discretion, to effect a reverse stock split of the Company’s common stock at a ratio of up to one-for-five hundred during the six month period following the date of a special meeting of shareholders. On December 17, 2007, plaintiff Legacy Trading Group (“Legacy”), a California limited liability company, filed an action against Unico alleging violation of Section 14(a) and (c) of the Securities Exchange Act of 1934 and the rules promulgated thereunder, and Arizona Revised Statute § 19-705. The action was filed in the United States District Court, Southern Division of California (Civil No. 07CV 2344-L (RBB)). Legacy filed an ex parte application for a Temporary Restraining Order (“TRO”), contending that notice of the special meeting of Unico’s shareholders and/or the related proxy statement was not provided to all shareholders. At a hearing held on December 18, 2007, the Court granted the application for a TRO, and enjoined and restrained Unico from holding the special meeting of the shareholders on December 21, 2007 or at any other time until the preliminary injunction hearing in this matter was heard. The preliminary injunction hearing was held on January 8, 2008. Plaintiff’s application for a preliminary injunction was denied at the hearing on the grounds of being moot. Unico believes notice of the special meeting of Unico’s shareholders and the related proxy statement for the December 21, 2007 special meeting were sent to all shareholders entitled to receive such pursuant to applicable federal proxy rules and the Arizona Revised Statutes. However, since the TRO prevented the Company from holding the special meeting of shareholders on December 21, 2007, the Company rescheduled the special meeting which was held on January 28, 2008 at 10:00 a.m.

On April 29, 2007, Bromide Basin Mining Company, LLC was served with a lawsuit filed on April 10, 2008 by Kaibab Industries, Inc. in Maricopa County, Arizona state court (No. CV2008-008121). The plaintiff alleges that Bromide Basin Mining Company, LLC owes $30,000 in rent for the months of May through October 2007, when the mining lease expired. The plaintiff also alleges that Bromide Basin Mining Company, LLC has failed to vacate the premises and that it owes an additional $5,000 per month as a holdover tenant commencing November 1, 2007 until it vacates the premises. The plaintiff has also asked for interest, attorney’s fees and court costs. Bromide Basin Mining Company, LLC has vacated the premises.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

A special meeting of the shareholders of Unico was held on January 28, 2008 to consider and vote upon a proposal to amend Unico’s Articles of Incorporation to authorize Unico’s board of directors, in its discretion, to effect a reverse stock split of Unico’s common stock at a ratio of up to 1 for 500 shares during the six month period following the date of the special meeting of shareholders. The proposal was approved by the shareholders with 2,194,297,224 shares voting in favor of the proposal, 1,724,664,523 shares voting against, and 7,923,462 shares abstaining.

Although Unico’s board of directors has not yet approved a reverse stock split of the Company’s common stock, the Company believes that a reverse stock split is in the Company’s best interests as it will enable the Company to increase the number of authorized, but unissued common shares, which can then be used to permit the conversion of outstanding convertible debentures into shares of the Company’s common stock, and for raising additional needed capital. It will also assist the Company to increase the trading price of the Company’s common stock to a level more acceptable to potential investors.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The Company’s common stock is traded on the OTCBB (Over-The-Counter Bulletin Board) under the symbol “UCOI”. The following table sets forth the trading history of the common stock on the Bulletin Board for each quarter during the last two fiscal years ended February 29, 2008, as reported by Dow Jones Interactive and/or Pink Sheets, LLC. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions. The quotations have been adjusted to reflect the Company’s 1 for 100 reverse stock split that occurred August 11, 2006 as though the reverse stock split had occurred March 1, 2006.


Quarter Ending		Quarterly High		Quarterly Low
5/31/2006	$	.45	$	.08
8/31/2006	$	.13	$	.046
11/30/2006	$	.057	$	.0056
2/28/2007	$	.017	$	.0055
5/31/2007	$	.0093	$	.0021
8/31/2007	$	.0034	$	.0010
11/30/2007	$	.0021	$	.0006
2/29/2008	$	.0009	$	.0004

Holders of Record

As of May 15, 2008 there were approximately 624 holders of record of the Company’s common stock. The Company believes it has many additional shareholders who hold shares through brokerage accounts and/or in street name.

Dividends

We have not paid any dividends during the last two fiscal years ended February 29, 2008 or since then. We currently intend to retain any earnings to finance the development and expansion of our operations and do not anticipate paying cash dividends or making any other distributions on our shares of common stock in the foreseeable future. Our future dividend policy will be determined by our board of directors on the basis of various factors, including our results of operations, financial condition, business opportunities and capital requirements.

Under Arizona state corporate law, no dividends may be paid if, after giving effect to the dividends, either: (a) Unico would not be able to pay its debts as they become due in the usual course of business; or (b) Unico's total assets would be less than the sum of its total liabilities plus, unless Unico's articles of incorporation provide otherwise, the amount that would be needed, if Unico were to be dissolved at the time of the distribution, to satisfy the preferential rights on dissolution of shareholders whose preferential rights are superior to those receiving the dividend.

Recent Sales of Unregistered Securities

From March 1, 2007 through February 29, 2008 Unico issued convertible debentures (“Debentures”) aggregating approximately $3,764,954 to Blue Marble, approximately $1,200,000 to Compass Capital Corporation and approximately $500,000 to Moore Investment Holdings that were unpaid, and of which $3,965,100 are in default. Some of these debentures, with the exception of those issued to Moore Investment Holdings, along with other debentures issued before March 1, 2007 were assigned to Blue Marble Investments, Outboard Investments, Umbrella Holdings and Yanzu, Inc. Because Unico, Incorporated failed to pay the Debentures when due, a total of approximately six (6) lawsuits were filed by these Debenture holders against Unico, Incorporated in the Twelfth Circuit (State) Court in Florida during the fiscal year ended February 29, 2008.

The Debentures provided that the principal amount and accrued interest were convertible, at the option of the holders of the Debentures, into shares of Unico’s common stock at a price per share equal to 50% of the closing bid price of Unico’s common stock as quoted on the OTC Bulletin Board on the immediately preceding trading day prior to the notice of conversion.

Unico agreed to settle each action by issuing shares of its common stock to the plaintiffs using a valuation of approximately 14% to 20% of the then existing bid price of Unico, Incorporated common stock. These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, after a hearing with notice to, and an opportunity to be heard from, interested parties, as to the fairness of each transaction, by a state court in Florida which specifically determined, prior to declaring that the transactions were exempt under Section 3(a)(10), that the transactions were fair to the interested parties.

From March 1, 2007 until February 29, 2008, in connection with the exercise of conversion rights by the holders of the Debentures and pursuant to the litigation settlements, Unico issued an aggregate of 3,926,315,790 shares of its common stock.

Unico believes that there were no underwriters involved in any of the stock issuances described above, and there were no underwriting discounts or commissions paid. The stock in each transaction was issued pursuant to Section 3(a)(10) of the Securities Act of 1933 as “securities issued in exchange for one or more bona fide outstanding securities, claims or property interests . . . where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions . . . .”

All convertible debentures issued to Compass Capital Corporation, Blue Marble and Reef Holdings that were unpaid as of January 2008 were purchased by, and assigned to, Moore Investment Holdings LLC.

During the fiscal year ended February 29, 2008, the Company issued a total of 8,627,463 shares of its common stock to Ray C. Brown pursuant to convertible debentures in consideration of the conversion of $16,566 in accrued interest and $7,079 in principal. These shares were issued without registration in reliance on Section 4(2) of the Securities Act of 1933 for transactions not involving any public offering, and the certificates representing the shares were appropriately restricted. No underwriters were involved, and no underwriting discounts or commissions were paid.

For information concerning sales of shares of Unico's Common Stock by Unico which were not registered under the Securities Act of 1933 during the fiscal years ended February 28, 2006 and February 28, 2007 please refer to Unico's annual reports on Form 10-KSB for the fiscal years ended February 28, 2005, and February 28, 2006, respectively, and to Unico’s quarterly reports on Form 10-QSB for the quarters ended May 31, 2005 and 2006, August 31, 2005 and 2006 and November 30, 2005 and 2006.

ITEM 6.

SELECTED FINANCIAL DATA

Not applicable.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

The following information should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-K.