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 December 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
incorporation or organization) Number)
1230 AVENUE OF THE AMERICAS, SUITE 771, ROCKEFELLER CENTER,
NEW YORK, 10020
- -------------------------------------------------------------------------------
(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 December 31, 2004:
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$12,818,038
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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 December 31, 2004
- --------------------------------------------------------------------------------
Class "A" 1,056,702,890
Class "B" 1,280,000
UNIVERSAL EXPRESS, INC.
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INDEX
PAGE
NUMBER
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - December 31, 2004 3
Consolidated Statement of Operations -
Six months ended December 31, 2004 4
Consolidated Statement of Cash Flows -
Six months ended December 31, 2004 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis 7
of Financial Condition and Plan of
Operations
Item 3. Controls and Procedures 14
PART II - OTHER INFORMATION 14
SIGNATURES 15
2
UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, 2004
ASSETS 2004
------ ----
CURRENT ASSETS:
Cash and Equivalents $ 18,635
Accounts Receivable, net of reserve of 12,134
Other Current Assets 173,800
------------------
Total Current Assets 204,569
------------------
PROPERTY AND EQUIPMENT
Computers and Equipment 236,632
Less Accumulated Depreciation (108,436)
------------------
Net Propert and Equipment 128,196
------------------
OTHER ASSETS:
Loan to Officer 769,378
Related Party Receivables 906,000
Notes Receivable 224,208
Goodwill 397,107
Other Assets 14,805
------------------
Total Other Assets 2,311,498
------------------
------------------
Total Assets $ 2,644,263
==================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES:
Accounts Payable $ 821,291
Accrued Expenses
Trade 156,914
Officers' Salary 1,131,911
Interest 277,191
Bank Line of Credit 21,300
Current Portion of Long-Term Debt 119,648
Notes Payable 461,400
Convertible Debenture 100,000
------------------
Total Current Liabilities 3,089,655
------------------
LONG-TERM DEBT
Long-Term Debt, Net of Current Portion 21,921
------------------
Total Long-Term Debt 21,921
------------------
Total Liabilities 3,111,576
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STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock, $.005 par value; Authorized 1,550,000,000 Shares
1,056,702,890 Shares Issued,1,056,662,890 Shares Outstanding 5,283,515
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 54,681,308
Stock Rights 8,665,962
Treasury Stock, at cost, 40,000 shares (14,350)
Deferred Compenstation (16,339,576)
Accumulated Comprehensive Income (Loss) (119,700)
Accumulated Deficit (52,630,871)
------------------
Total Stockholders' Equity (Deficiency) (467,313)
------------------
------------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 2,644,263
==================
See notes to consolidated financial statements
3
UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THREE & SIX MONTHS ENDING DECEMBER 31, 2004 AND 2003
THREE MONTHS ENDED SIX MONTHS ENDED
2004 2003 2004 2003
---- ---- ---- ----
Revenues 131,495 1,084,098 579,787 1,267,147
Cost of Goods Sold 162,701 1,043,368 571,310 1,205,854
---------------------------------------------------------------------
Gross Profit (31,206) 40,730 8,477 61,293
---------------------------------------------------------------------
OPERATING EXPENSES
Selling, General and Administrative 886,699 1,295,866 1,819,494 2,422,804
Amortization of Deferred Compensation 938,357 798,454 1,794,833 1,635,994
Stock Based Compensation 7,763 - 95,763 57,160
Depreciation 8,222 8,034 16,163 15,521
---------------------------------------------------------------------
Total Operating Expenses 1,841,041 2,102,354 3,726,253 4,131,479
---------------------------------------------------------------------
Operating Loss (1,872,247) (2,061,624) (3,717,776) (4,070,186)
OTHER INCOME (EXPENSE)
Loss Recoupment from Discontinued Operations - 63,678
Income from Discontinued Operations 72,820 72,820
Interest Income 11,370 11,854 22,879 23,893
Interest Expense (19,616) (7,892) (39,452) (16,709)
-------------------------------------------------------------------
Total Other Income (Expense) (8,246) 76,782 47,105 80,004
---------------------------------------------------------------------
Loss Before Taxes $ (1,880,493) $(1,984,842) $ (3,670,671) $ (3,990,182)
Taxes $ - $ (69,562) $ - $ (69,562)
--------------------------------- --------------------------------
Net Income (Loss) $ (1,880,493) $(2,054,404) $ (3,670,671) $ (4,059,744)
BASIC NET LOSS PER COMMON SHARES $ (0.00) $ (0.00) $ (0.00) $ (0.01)
=====================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 921,904,058 573,527,478 807,513,873 614,123,950
=====================================================================
See notes to consolidated financial statements.
4
UNIVERSAL EXPRESS INC, AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
FOR THE SIX MONTHS ENDED DECEMBER 2004 AND 2003
2004 2003
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (3,670,672.00) $ (4,059,744.00)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 16,163 15,521
Common shares issued for services 95,763 57,161
Amortization Of Deferred Compensation 1,794,833 1,635,994
Forgiveness of Officer Loan -
Write-down Officer Loan - 16,907
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 32,485 518,572
(Increase) decrease in other current assets (30,000) -
(Increase) decrease in other receivables 7,700 (2,242)
(Increase) decrease in notes receivables 285,782 -
(Increase) decrease in loan to officer 16,217 -
(Increase) decrease in other assets (3,250) (688,046)
Increase (decrease) in accounts payable an accrued expenses 7,901 173,506
Increase (decrease) in accrued officers salary 153,596 -
Increase (decrease) in accrued interest 38,557 -
------------------------------------------
Net cash provided (used) by operating activities (1,254,925) (2,332,371)
------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (42,145) (35,469)
Acquisition of Goodwill (680,000)
Acquisition of Cash 66,550
Related Party Receivables - -
------------------------------------------
Net Cash provided (used) by investing activities (42,145) (648,919)
------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 999,600
Issuance of stock rights for cash 1,238,000 3,608,000
Long term debt payments (15,505) (138,844)
Notes payable payments (3,000) (4,100)
Bank line of credit payments (3,828) (5,352)
------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,215,667 4,459,304
------------------------------------------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (81,403) 1,478,014
CASH and Equivalents, beginning of period 100,038 242,037
------------------------------------------
CASH and Equivalents, end of period 18,635 1,720,051
==========================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash - -
Non-Cash Financing Activities:
Issuance of common stock for deferred compenstation 4,546,541 5,502,088
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, 2004.
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 December 31, 2004 and the results of operations
and cash flows for the six months ended December 31, 2004 have been
included.
The results of operations for the six months ended December 31, 2004, are
not necessarily indicative of the results to be expected for the full year
ended June 30, 2005.
2. SEGMENT INFORMATION
- -- -------------------
Six months ended December 31, 2004:
TRANSPORTATION/
LOGISTICS & EQUIPMENT
INTERNATIONAL LEASING PARENT
SHIPPING BROKERAGE (OTHER) CONSOLIDATED
-------- --------- ------- ------------
Revenue $226,886 $352,901 $ 0 $ 579,787
Operating
Income/(Loss) (293,440) (300,123) (3,077,108) (3,670,671)
Six months ended December 31, 2003:
TRANSPORTATION/
LOGISTICS & EQUIPMENT
INTERNATIONAL LEASING PARENT
SHIPPING BROKERAGE (OTHER) CONSOLIDATED
-------- --------- ------- ------------
Revenue $101,963 $1,165,184 $0 $1,267,147
Operating
Loss (504,752) (196,359) (3,431,453) (4,132,564)
Assets of the segment groups are not relevant for management of the
businesses nor for disclosure.
6
3. CAPITAL STOCK
-------------
During- the quarter ended December 31, 2004 the Company issued 228,308,350
shares of common stock. Of such shares issued, 219,333,350 shares were
issued for deferred services, 475,000 for advisory and 8,500,000 for
collateral.
4. SUBSEQUENT EVENTS
-----------------
On January 27, 2005, the Company announced the introduction of The
Universal Express Courier Association.
On February 14, 2005, the Company satisfied the $400,000 loan reflected in
Notes Payable to the Consolidate Balance Sheet ended December 31, 2004.
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) evolved into a conglomerate of supportive
companies and divisions centered around its private postal system.
The Company's principal subsidiaries and divisions are:
UniversalPost Private Postal Network
UniversalPost International Courier Service
Virtual Bellhop(TM)
Luggage Express(TM)
Universal Express Capital Corp.
Universal Cash Express
Universal Express Properties
7
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 continued major expansion in the last decade. Strong
strategic relationships are currently being established with companies and
manufacturers, thus strengthening the UniversalPost private postal network.
Members of the UniversalPost 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.
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 UniversalPost that produces growing revenue streams
for both its members and USXP. USXP offers its UniversalPost 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.
UniversalPost(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.
8
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 UniversalPost 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.
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.
UNIVERSALPOST(TM) - THE PRIVATE POSTAL NETWORK
----------------------------------------------
UniversalPost, 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. UniversalPost 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 Customized Rubber Stamps
9
o Equipment Leasing
o Moving Supplies
o Car Rental
o ATM's
o Business and Office Supplies
o Parcel Insurance
o Credit Card Processing
o Check Processing
o Prepaid Debit Card Load Stations
o Visa - MasterCard
o Discounted Supplies
o Joint Promotions
o Mailing Lists
o Video Tape to DVD Conversion
o Fingerprinting
o International Cell Phone Rental
o Credit Union
o Message On Hold
o Health Care Coverage
o Gift Cards
o Passport & Visa Expediting
o Retail Products
o Cardtronics
On October 14, 2004, the Company announced an agreement with Paymentech for
electronic payment processing services.
On November 8, 2004, the Company announced its strategic partnership with
PrideRock, a leasing provider of outsourced fingerprint and data management
technology.
On November 30, 2004, the Company announced a strategic partnership with The
Convex Group to distribute Flexplay limited-play DVD's in member stores.
On January 25, 2005, the Company announced a strategic alliance with Express ATM
Northeast, to provide Cardtronics ATMs to member stores.
UNIVERSALPOST(TM) - INTERNATIONAL COURIER SERVICE
-------------------------------------------------
UniversalPost, the International Courier Service, is an alliance of
independently owned and operated express courier services operating in 268
cities in 120 countries. UniversalPost 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, UniversalPost members offer flexible, customized
10
International services to meet a client's specific distribution needs. Instead
of operating our own costly fleet, UniversalPost 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 UniversalPost are totally
dependent upon their suppliers' shipping. The obvious synergy between
UniversalPost, the International Courier Service and UniversalPost, the private
postal network, enhances our unusual position in the shipping service industry.
Now UniversalPost 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 UniversalPost Networks' use of the
UniversalPost 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.
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.
On January 27, 2005, the Company announced a joint venture with the Cash Express
11
division to offer a Luggage Express Gift Card.
On January 28, 2005, the Company announced Madison & Mulholland, one of the
leading VIP gift bag companies would add to its newest A-list products A Luggage
Express gift card promotion.
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 its subsidiary
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 UniversalPost(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 October 1, 2004, the Company announced a new distribution agreement with
I-PrePay, a leading provider of prepaid products, telecom and the new touch
screen I-PrePay terminals.
On October 25, 2004, the Company announced a partnership with 1-800-TOW-TRUCK
Pre-paid Roadside Assistance Cards(TM).
On December 29, 2004, the Company announced the launching of its VISA stored
value payroll card program.
On January 13, 2005, the Company announced an agreement with DataWave Services
(Canada), a leading point-of-sale activation provider the Company's gift cards
to 4,000 Canadian retail locations.
On January 25, 2005, the Company announced the launching of a Universal RX
Prescription Discount Card good at over 35,000 chain pharmacies.
12
UNIVERSAL EXPRESS PROPERTIES
----------------------------
The Company announced its real estate division on November 12, 2004. The
division will concentrate on commercial property acquisitions, commercial loans
and other lending activities, and will seek to be the lead investor in private
placements, limited partnerships and other activities with a goal to develop a
portfolio sufficient to operate the company as a real estate investment trust
(REIT).
RESULTS OF OPERATIONS - SIX MONTHS ENDED DECEMBER 31, 2004.
- -----------------------------------------------------------
SIX MONTHS ENDED
2004 2003
---- ----
Revenues
Logistics & International shipping - 226,886 101,963
Transportation / Equipment - 352,901 1,165,184
Leasing
Cost Of Goods Sold 571,310 1,205,854
Selling, General and Administration 1,819,494 2,422,804
Depreciation & Amortization 16,163 15,521
During the six months ended December 31, 2004 operating revenues decreased to
$579,787 from $1,267,147. This decrease is due mainly to the pending sale of our
Capital leasing division.
Cost of revenues were $571,310 and $1,205,854 respectively.
LIQUIDITY AND CAPITAL RESOURCES - FOR THE SIX MONTHS ENDED DECEMBER 31, 2004
- ----------------------------------------------------------------------------
The net proceeds from investments in the Company was approximately $1,238,000.
Approximately $1,254,925 was used in its operating activities.
Until the UniversalPost Network, Universal Express Capital, UniversalPost
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
13
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.
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 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.
On March 2, 2004, the Company brought an action against the SEC in federal court
in Florida on damages from the "naked shorting" of its shares and other matters.
Thereafter, on March 23, 2004 the SEC brought an action in federal court in New
York against certain officers of the Company. Both suits are pending.
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.
14
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 --
--------------------------------
NONE
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: February 18, 2005
15