UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED March 31, 2004
Commission File Number 0-18094
UNIVERSAL EXPRESS, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 11-2781803
------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1230 AVENUE OF THE AMERICAS, SUITE 771,
ROCKEFELLER CENTER, NEW YORK, 10020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (917) 639-4157.
Securities registered pursuant to Section 12 (g) of the Act:
COMMON STOCK
----------------
(Title of Class)
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
----- -----
State the aggregate market value of the voting stock held by non-affiliates of
the registrant on March 31, 2004:
--------------------
$17,743,960
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
- -------------------------------------------------------------------------
Common Stock Outstanding at March 31, 2004
- -------------------------------------------------------------------------
Class "A" 681,040,652
Class "B" 1,280,000
UNIVERSAL EXPRESS, INC.
INDEX
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - March 31, 2004 3
Consolidated Statement of Operations -
Three and nine months ended March 31, 2004 4
Consolidated Statement of Cash Flows -
Nine months ended March 31, 2004 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Plan of
Operations 9
Item 3. Controls and Procedures 14
PART II - OTHER INFORMATION 15
SIGNATURES 17
2
UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 2004
ASSETS
CURRENT ASSETS:
Cash $ 377,679
Accounts Receivable 22,783
Net Investment in Financing Direct Leases 942,553
Other Receivables 9,126
Assets to be disposed of 1,498,681
Other Current Assets 692,378
------------
Total Current Assets 3,543,200
------------
PROPERTY AND EQUIPMENT, net 122,336
------------
OTHER ASSETS:
Loan to Officer 793,831
Related Party Receivables 906,000
Notes Receivable 245,773
Goodwill 7,900,450
Net Investment in Direct Financing Leases 609,208
Net Investment in Operating Leases 601,539
Other Assets 15,155
------------
Total Other Assets 11,071,956
------------
Total Assets $ 14,737,492
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses $ 273,142
Accrued Expenses 262,000
Accrued Officers' Salary 1,009,462
Accrued Interest 226,520
Bank Line of Credit 27,314
Liabilities to be disposed of 873,932
Current Maturities of Long-Term Debt 8,707,989
Notes Payable 464,400
Convertible Debentures 100,000
------------
Total Current Liabilities 11,944,759
------------
Long-Term Debt, Net of Current Maturities 482,364
------------
Total Liabilities 12,427,123
------------
STOCKHOLDERS' EQUITY:
Common Stock, $.005 par value; Authorized 750,000,000 Shares
681,040,652 Shares Issued,681,000,652 Shares Outstanding 3,405,203
Class B Common Stock, $.005 par value; Authorized 3,000,000
shares 1,280,000 shares issued and outstanding 6,400
Additional Paid-in Capital 51,528,838
Accumulated Deficit (45,992,487)
Accumulated Other Comprehensive Income (119,700)
Stock Rights 7,102,962
Common Stock in Treasury, at cost, 40,000 shares (14,350)
Deferred Costs Related to Stock Issued for Services (9,686,497)
Stock Issued For Collateral (3,920,000)
------------
Total Stockholders' Equity 2,310,369
------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 14,737,492
============
See notes to consolidated financial statements
3
UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THREE AND NINE MONTHS ENDING MARCH 31, 2003 AND 2004
THREE MONTHS ENDED NINE MONTHS ENDED
2004 2003 2004 2003
------------- ------------- ------------- -------------
Revenue $ 1,222,208 $ 321,495 $ 2,526,404 $ 2,043,381
Cost of Goods Sold 1,060,550 290,108 2,266,404 1,992,931
------------- ------------- ------------- -------------
Gross Profit 161,658 31,387 260,000 50,450
------------- ------------- ------------- -------------
Selling, General and Administrative 2,248,942 1,689,687 6,384,345 4,958,248
Depreciation 173,459 7,029 188,980 19,960
------------- ------------- ------------- -------------
Total Operating Expenses 2,422,401 1,696,716 6,573,325 4,978,208
------------- ------------- ------------- -------------
LOSS FROM OPERATIONS (2,260,743) (1,665,329) (6,313,325) (4,927,758)
Discontinued Operation
Income from Operations of Discontinued
Components 242,348 296,631
Loss on Discontinued Operations (38,264) -- (38,264) --
Other Income (Expense)
Interest Expense (9,777) (7,650) (25,552) (23,345)
Interest Income 54,009 12,231 77,902 37,081
------------- ------------- ------------- -------------
Income Before Taxes (2,012,427) (1,660,748) (6,002,608) (4,914,022)
Taxes (2,871) -- (72,434) --
------------- ------------- ------------- -------------
Net Income (Loss) $ (2,015,298) $ (1,660,748) $ (6,075,042) $ (4,914,022)
LOSS PER COMMON SHARES $ (0.00) $ (0.00) $ (0.01) $ (0.01)
============= ============= ============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 635,366,794 389,477,589 629,106,352 424,947,739
============= ============= ============= =============
NET INCOME (LOSS) $ (2,015,298) $ (1,660,748) $ (6,075,042) $ (4,914,022)
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized loss of marketable securities -- -- -- --
------------- ------------- ------------- -------------
COMPREHENSIVE INCOME (LOSS) $ (2,015,298) $ (1,660,748) $ (6,075,042) $ (4,914,022)
============= ============= ============= =============
See notes to consolidated financial statements.
4
Universal Express Inc, and Subsidiaries
Condensed Consolidated Statements of Cash Flows - Unaudited
For the Nine Months Ended March 2004 and 2003
2004 2003
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CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Used by Continuing Operations $(4,817,741) $ (1,715,355)
Cash Used by Discontinued Operations 937,370 --
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (3,880,371) (1,715,355)
CASH FLOWS FROM INVESTING ACTIVITIES
Related Party Receivables -- (19,876)
Proceeds from sale of business unit 50,000 --
Acquisition of Goodwill (741,376) --
Acquisition of cash 66,550 --
Acquisition of property and equipment (35,469) (14,313)
----------- -----------
Net Cash Used In Investing Activities (660,295) (34,189)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Bank Line of Credit (7,727) (11,979)
Proceeds from Note Payable 400,000 --
Repayments of Notes Payable (5,600) (1,000)
Repayment Long Term Debt (817,965) (28,202)
Proceeds from stock rights 4,108,000 1,770,960
Proceeds from sale of stocks 999,600 --
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 4,676,308 $ 1,729,779
----------- -----------
NET INCREASE (DECREASE) IN CASH 135,642 (19,765)
CASH - BEGINNING OF YEAR 242,037 31,342
----------- -----------
CASH - END OF PERIOD $ 377,679 $ 11,577
=========== ===========
Non cash investing and financing activities for nine months
ended March 31, 2004:
On March 30, 2004, the company sold Bags to Go, Inc. for $308,776 including
cash proceeds fo $50,000 and two note receivables totalling $258,776.
The company issued 106,717,601 shares of common stock
The company issued 106,717,601 shares of common stock
valued at $7,265,165 for deferred services.
Shares issued for Collateral 40,000,000 valued at $3,920,000
The company issued long term debt totaling approximately $7,980,000
in the acquisition of Subcontracting Concepts, Inc. and Bags to Go.
The company assumed debt of approximately $2,237,000 in the
acquistion of the lease portfolio.
See notes to consolidated financial statements
5
UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES
Notes To Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial statements and with the instructions to Form 10-QSB and
Item 310 of Regulation S-B. Accordingly, they do not include all of the
information and disclosures required for annual financial statements. These
financial statements should be read in conjunction with the consolidated
financial statements and related footnotes included in the Company's annual
report on Form 10-KSB for the year ended June 30, 2003.
In the opinion of the Company's management, all adjustments (consisting of
normal recurring accruals) necessary to present fairly the Company's
financial position as of March 31, 2004 and the results of operations and
cash flows for the nine months ended March 31, 2004 have been included.
The results of operations for the nine months ended March 31, 2004, are not
necessarily indicative of the results to be expected for the full year
ended June 30, 2004.
2. SEGMENT INFORMATION
Nine months ended March 31, 2004:
Transportation/
Logistics & Equipment
International Leasing SubContracting Parents
Shipping Brokerage Services Other) Consolidated
------------ --------------- -------------- ------------ ------------
Revenue $204,739 $2,321,665 -- -- $2,526,404
Operating
Income/(Loss) ($438,747) ($314,128) -- ($5,560,450) ($6,313,325)
Nine months ended March 31, 2003:
Transportation/
Logistics & Equipment
International Leasing Parent
Shipping Brokerage (Other) Consolidated
------------ --------------- -------------- ------------
Revenue $ 99,256 $1,944,125 -- $2,043,381
Operating
Loss ($160,558) ($ 188,562) ($4,578,638) ($4,927,758)
Assets of the segment groups are not relevant for management of the businesses
nor for disclosure.
6
3. CAPITAL STOCK
During the nine months ended March 31, 2004 the Company issued 189,792,420
shares of common stock. Of such shares issued 20,400,000 shares were sold,
106,717,601 shares were issued for deferred services, 1,579,000 for
advisory services, 16,000,000 shares for stock rights,40,000,000 for
collateral, 95,819 for the exercise of warrants and 5,000,000 for notes
payable. Also during the nine months ended March 31, 2004, the Company
received $4,108,000 for stock rights.
4. LONG-TERM DEBT
Long-term debt is comprised of the following:
Installment note arising from settlement agreement due in monthly
installments of $1,185 including interest through
December 2004. This note bears interest at 12.5% 12,145
Promissory note to bank payable in equal monthly installments Of $2,167
plus interest through October 2006. The note bears Interest at 0% per
annum until May 2004, at which time the rate will be fixed at a rate of 2%
over the then prevailing prime rate. The note is secured by substantially
all the Company's assets. 69,324
Loans payable to former owners of Virtual Bellhop, LLC, payable in monthly
installments of $3,333 plus interest
At 4% through May 2005. 81,998
Note payable to former shareholders of SCI payable as follows:
$500,000 in January 2004 and 28 equal quarterly payments quarterly
payments of $250,000 plus interest at 5.03%
through December 31, 2010. (See Foot Note #5) 6,850,000
Notes payable assumed in the acquisition of lease portfolio payable over
the individual loans with interest rates
ranging from 7.25% and 8.25%. $1,976,886
Loan to former shareholder of SCI payable on demand with
interest at 5.5% per annum 200,000
Total 9,190,353
-----------
Less current maturities 8,707,989
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Long-term debt, net of current maturities 482,364
-----------
Total maturities of long-term debt as follows:
Twelve months ended March 31,
2005 8,707,989
2006 482,364
Total 9,190,353
-----------
5. DISCONTINUED OPERATIONS
On March 30, 2004 the Company sold Bags to Go, Inc to its former owner.
Bags to Go, Inc. was originally purchased by the Company on January 22,
2004. The decision to sell the component was based on the Company's
decision to lower its long-term debt. The purchase price consisted of (a)
$179,500, with $25,000 paid on March 30, 2004 and 24 equal monthly
installments of $6,437.50, (b) $129,275, with $25,000 paid on March 30,
2004 and 24 equal monthly installements of $4,344.83 and (c) the
cancellation of the note due to the former owner of Bags to Go, Inc. of
which, the balance on March 30, 2004 was $424,666.
Subsequent to March 31, 2004, the Company sold Subcontracting Concepts,
Inc. to its former owners. Subcontracting Concepts, Inc. was originally
purchased by the Company on November 28, 2003. The decision to sell the
component was based on concern and apprehension which was voiced by
Subcontracting Concepts', Inc. insurance carriers, financial institutions
and clients regarding the recent Securities and Exchange Commission's
public complaint filed against Universal Express, Inc. The purchase price
consisted of (a) $91,667 payable at the closing, (b) $458,333 payable in
five equal monthly payments of $91,666.60, (c) the surrender of 5,000,000
shares of the Company's common stock and (d) the cancellation of the note
due to the former owners of Subcontracting Concepts, Inc. of which, the
balance on the date of the closing was $6,850,000. The assets and
liabilities of Subcontracting Concepts, Inc. as of March 31, 2004 are
included in assets and liabilities to be disposed on the balance sheet.
Assets and Liabilities to be disposed of are comprised to the following as
March 31, 2004:
Accounts receivable $1,359,490
Other receivables 62,691
Other current assets 50,000
Equipment 26,500
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$1,498,681
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Accounts payable and accrued expenses $ 673,932
Long-term debt 200,000
----------
$873,932
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Included in this report are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable; it
can give no assurance that such expectations reflected in such forward-looking
statements will prove to be correct. The Company's actual results could differ
materially from those anticipated in the forward-looking statements as a result
of certain factors, including sales levels, distribution and competition trends
and other market factors.
Universal Express, Inc. (USXP) has evolved into a conglomerate of supportive
companies and divisions centered around its private postal system.
The Company's principal subsidiaries and divisions are:
WorldPost Private Postal Network
WorldPost International Courier Service
Virtual Bellhop(TM)
Luggage Express(TM)
Universal Express Capital Corp.
Universal Cash Express
MARKETPLACE
A challenging global economy has grown over the past decade. Internet, catalog
and retail sales continue to mandate an inexpensive and responsive final mile
Domestic and International delivery network. That innovative and outsourced
final mile network continues to be addressed by Universal Express, Inc.
Universal Express has continues major expansion in the last decade. Strong
strategic relationships are currently being established with companies and
manufacturers, thus strengthening the WorldPost private postal network.
Members of the WorldPost private postal network provide the public with a
complement to the U.S. Post Office for many retail and business postal services.
In addition, these Postal Service Centers offer individuals and business
customers an additional variety of personal business services and merchandise.
Our private postal and business service centers form a highly fragmented cottage
industry. Universal Express believes that since this industry generates over $8
billion in sales and presently consists of more than 20,000 independent
operators, there is a market opportunity for the development of an association
with the goal of unifying and organizing the independent and franchised postal
stores nationwide.
Our company believes that an affordable outsourced distribution system is needed
to suit consumers' needs. Universal Express believes it has positioned itself to
be a contender in the global economy for the next decade with the development of
its complementary subsidiaries.
8
USXP is now positioned as a significant player in the international shipping and
transportation industries. By building its divisions through classic outsourcing
techniques, USXP's future revenue growth will not be offset by increased
overhead.
In just the past few years, USXP has identified more than 8,000 private postal
centers in a network called WorldPost that produces growing revenue streams for
both its members and USXP. USXP offers its WorldPost Network members discounted
services from some of the country's largest vendors, as well as innovative new
luggage services that resonate in the world's present security-conscious travel
climate.
USXP's business strategy is far more than the sum of today's parts. The
company's three highly synergistic divisions position the company to create an
entirely new industry paradigm by offering the private postal industry and
consumers value-added services and products, logistical services, equipment
leasing and cost-effective delivery of goods and services worldwide.
WorldPost(TM) Network, the name for USXP's private postal network, taps the
purchasing power of over 20,000 privately-owned and operated postal stores to
create the nation's first truly organized and funded private postal system.
USXP's Web-based CRM software system empowers swift delivery of business
products and services to the network: commercial mail receiving; office products
and supplies; packaging and shipping; copying, imaging, photo finishing and
digital services; home office boutique items; and even concierge services.
Universal Express Logistics, Inc. joins the company's visionary Luggage
Express(TM) service offered through the WorldPost Network and its Internet-based
Virtual Bellhop(R) luggage pickup and delivery service to free travelers from
the stress of dealing with their luggage as they travel across the country and
around the world. USXP charges an average of $70 per piece to deliver
dropped-off luggage to a traveler's final destination. The target customer is
the upscale traveler planning extended stays at destination resorts, but the
service is equally appealing to any traveler who prefers not to pay extra
airline fees or struggle with heavy and awkward baggage at either end of their
trip. When you consider that by 2005 domestic airline luggage is expected to
exceed 3 billion pieces annually, USXP's revenue potential is substantial as
acceptance of luggage transportation services reaches critical mass with further
branding and advertising.
Universal Express Capital Corp. is a full-service, asset-based transportation
and leasing service that provides capital acquisition funding for the business
sector. USXP has established strategic alliances with a number of major
manufacturing firms in the limousine, livery, small fleet, vehicle rental,
delivery truck and van, bus and aircraft industries. The company projects
minimum annual lease originations of $24 million. USXP recently entered into a
management contract with Go Commercial Leasing Corp., which has a
well-established customer base in the commercial transportation industry.
9
USXP Platinum(TM) Card is its answer to the millions of people who regularly
send money overseas to their families. The USXP prepaid, FDIC insured ATM card
provides an instant, secure method of money transfer across international
borders. USXP Platinum Card also targets the 30% of the U.S. population with no
checking accounts or credit and, with over 9,000 retail locations--a
distribution plan that is creatively affordable.
WORLDPOST(TM) - THE PRIVATE POSTAL NETWORK
WorldPost, a private postal network, is an association formed to create a very
much needed partnership between previously unconnected shipping and packaging
store owners. This concept has been accomplished many times before in American
industries, most notably by FTD's maturation of the independent florists across
America and Interflora's unification and development of florists in Europe.
WorldPost provides independent store owners with a variety of cost effective
services and products to help increase their profitability, while they are still
able to maintain their local or franchised identities.
Individual Services and Products
o Flowers/Gift Baskets
o Money Transfer Services
o Corrugated & Packaging
o Lamination and Photo ID's
o Customized Rubber Stamps
o Equipment Leasing
o Moving Supplies
o Car Rental
o Customized Corrugated
o Business and Office Supplies
o Parcel Insurance
o Credit Card Processing
o Check Processing
o Payroll and Tax Processing
o Prepaid Debit Card Load Stations
o Visa - MasterCard
o Discounted Supplies
o Joint Promotions
o Mailing Lists
o Shredder Cushioning Systems
o Retail Products
o Luggage Express
o Employee Benefits
o Bad Check Collection
o Passport Expediting
o Message on Hold
o Video Tape to DVD Conversion
o Fingerprinting
o Income Tax Preparation
o Recycling
o Health Care Coverage
o In Store Signmaking
o Retail Products
o Sign Making
10
WORLDPOST(TM) - INTERNATIONAL COURIER SERVICE
WorldPost, the International Courier Service, is an alliance of independently
owned and operated express courier services operating in 268 cities in 120
countries. WorldPost provides global delivery and services to international
firms. This network currently delivers over 650,000 packages per month and is
part of the world's largest independently owned courier network. It is the 5th
largest express courier network in the world behind the integrated United States
express carriers such as FedEx, UPS and DHL.
Unlike the major integrators who operate their own aircraft and thus offer rigid
pick up and delivery schedule, WorldPost members offer flexible, customized
International services to meet a client's specific distribution needs. Instead
of operating our own costly fleet, WorldPost offers express International air
courier service and expedited air cargo through regularly scheduled commercial
airlines to transport time-sensitive documents, parcels, freight and mail.
According to industry estimates, private postal stores alone ship $600,000,000
annually in International packages and without WorldPost are totally dependent
upon their suppliers' shipping. The obvious synergy between WorldPost, the
International Courier Service and WorldPost, the private postal network,
enhances our unusual position in the shipping service industry.
Now WorldPost Network members can offer an in-house solution for international
deliveries at a higher profit margin for themselves and increase the value of
international delivery service to their customers rather than the more expensive
traditional carriers. The WorldPost Networks' use of the WorldPost envelope for
their international shipping method instead of outsourced options strengthens
the local postal stores' position as an international delivery solution.
LUGGAGE EXPRESS(TM) AND VIRTUAL BELLHOP
Luggage Express and its premier service, the Virtual Bellhop, facilitate and
manage the movement of baggage door to door for leisure and business travelers.
With many years of logistical corporate and entrepreneurial experience in
relevant core businesses, Universal Express has created a powerful logistical
business model driven by multi-channel distribution and multi-market demand. We
have established relationships with travel service providers and distribution
partners.
11
There are significant market opportunities not limited to the abundance of
checked bags presently being moved each year. Making travel easier and more
enjoyable through luggage free travel is the goal of our two companies.
Whether it be through partners like hotels, airlines, cruise lines, credit card
companies, airline or travel agencies, or simply our neighborhood postal store,
we continue to introduce Americans to luggage-free travel.
With over 1.5 billion suitcases presently being checked by domestic passengers,
our companies offer significant benefits to the airlines. Customer satisfaction,
easier check-in, a secure alternative to curb-side check-in, less congestion in
the departure hall and minimizing departure delays, defines our service. The FAA
expects the number of airline passengers to double by 2005, making domestic
luggage to exceed 3 billion suitcases. Luggage Express and Virtual Bellhop are
indeed poised for luggage free travel.
UNIVERSAL EXPRESS CAPITAL CORP.
The Universal Express family of companies has broadened the nature of its core
business by entering the financial services industry via the subsidiary of
Universal Express Capital Corp. A full service, asset based transportation and
equipment lessor, Universal Express Capital Corp. provides capital acquisition
funding, in the form of lease financing, to the national business community as
well as within the framework of Universal Express' other affiliates and
subsidiaries.
UNIVERSAL CASH EXPRESS
Universal Cash Express further exhibits its product diversification by providing
the USXP Platinum(TM) stored value card to consumers nationwide. With a growing
percentage of the population needing a simple and inexpensive alternative to
traditional bank accounts combined with the continuing technological
advancements of a "cash-less" society, Universal Cash Express now provides
consumers with the banking services they want without the banking hassles.
Universal Cash Express has launched its newest product line, Branded Gift Card
Programs, such as the FTD Gift Card and the Luggage Express Rewards Program.
Distributing this product through the WorldPost(TM) Network exposes the USXP
Platinum stored value card to the wide range of consumers patronizing the 20,000
postal stores nationwide while enhancing store owners revenue via sales, fund
loading, payroll and recurring usage fee structures associated with the card. A
myriad of credit, finance, and marketing applications will be offered to USXP
Platinum cardholders.
On March 16, 2004, the Company announced a floral gift card distribution
agreement with InComm, Inc.
12
RESULTS OF OPERATIONS - FOR NINE MONTHS ENDED MARCH 31, 2004
NINE MONTHS ENDED
--------------------------------
2004 2003
---------- ----------
Revenues
Logistics & International shipping - $ 204,739 $ 99,256
Transportation / Equipment -
Leasing $2,321,665 $1,944,125
Subcontracting Services - -- --
Cost Of Goods Sold $2,266,404 $1,992,931
Selling, General and Administration $6,384,345 $4,958,248
Depreciation & Amortization $ 188,980 $ 19,960
During the nine months ended March 31, 2004 operating revenues increased
$2,526,404 from $2,043,381, an increase of approximately 23.6%. This increase is
due mainly to increased sales in our logistics and leasing departments.
Cost of revenues were $2,266,404 and $1,992,931 respectively.
LIQUIDITY AND CAPITAL RESOURCES - FOR THE NINE MONTHS ENDED MARCH 31, 2004
The net proceeds from investments in the Company was approximately $5,107,600.
Approximately $3,880,371 was used in its operating activities.
Until the WorldPost Network, Universal Express Capital, WorldPost International
Delivery and the Company's other businesses, are fully operational and
integrated the Company will continue to rely on equity and debt raised to fund
its operations. Management is continuing efforts to raise cash by arranging
lines of credit, and obtaining additional equity capital. The Company's future
business operations will require additional capital.
Management is presently exploring methods to increase available credit lines as
well as methods to increase working capital through both traditional and
non-traditional debt services.
CONTROLS AND PROCEDURES
Richard Altomare, our Chief Executive Officer and Chief Financial
Officer, performed an evaluation of the Company's disclosure controls and
procedures within 90 days prior to the filing date of this report. Based on his
evaluation, he concluded that the controls and procedures in place are
sufficient to assure that material information concerning the Company which
could affect the disclosures in the Company's quarterly and annual reports is
made known to him by the other officers and employees of the Company, and that
the communications occur with promptness sufficient to assure the inclusion of
the information in the then-current report.
13
There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect those controls
subsequent to the date on which Mr. Altomare performed his evaluation.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company recently filed a lawsuit in New York against North American Airlines
and its principal for $168,000,000, plus punitive damages.
The Company was awarded a $389 million dollar damage verdict by a jury in Dade
County, Florida, upon which judgment was entered, against Select Capital, Ronald
G. Williams and Walter Kolker. On April 21, 2003, the Company was awarded an
additional $137,000,000 judgment upon a verdict after trial by a different jury
in Dade County, Florida, against two other parties to this matter, Sheldon
Taiger and South Beach Financial. We believe that the judgments, which are
non-appealable, are substantially collectable.
The Company is involved in several lawsuits with vendors and suppliers. These
claims are all disputed by the Company. The Company believes that disposition of
these matters will not have a material adverse effect on the Company's financial
position.
Item 2. CHANGES IN SECURITIES -- NONE
---------------------
Item 3. DEFAULTS ON SENIOR SECURITIES -- NONE
-----------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
--------------------------------------------
HOLDERS - NONE
Item 5. OTHER INFORMATION -- NONE
-------------------------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
Current Report filed on Form 8K dated February 12,2004
SIGNATURES
Pursuant to the requirement 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.
UNIVERSAL EXPRESS, INC.
/S/ RICHARD A. ALTOMARE
---------------------------
Richard A. Altomare,
President and Chairman
of the Board.
Dated: May 19, 2004
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