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, 2006
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 March 31, 2006:
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$111,738,167
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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.
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Common Stock Outstanding at March 31, 2006
- --------------------------------------------------------------------------------
Class "A" 8,239,031,843
Class "B" 1,280,000
UNIVERSAL EXPRESS, INC.
INDEX
PAGE
NUMBER
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - March 31, 2006 3
Consolidated Statement of Operations -
Nine months ended March 31, 2006 4
Consolidated Statement of Cash Flows -
Nine months ended March 31, 2006 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 13
PART II - OTHER INFORMATION 14
SIGNATURES 15
-2-
UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 2006
ASSETS 2006
CURRENT ASSETS:
Cash and Equivalents $ 1,299,823
Accounts Receivable, net of reserve of 63,590
Other Current Assets 527,501
------------
Total Current Assets 1,890,914
------------
PROPERTY AND EQUIPMENT
Computers and Equipment 238,152
Less Accumulated Depreciation (127,483)
------------
Net Propert and Equipment 110,669
------------
OTHER ASSETS:
Loan to Officer 730,286
Related Party Receivables 906,000
Notes Receivable 849,513
Goodwill 397,107
Other Assets 13,805
------------
Total Other Assets 2,896,711
------------
------------
Total Assets $ 4,898,294
============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts Payable $ 836,517
Accrued Expenses
Trade 199,352
Officers' Salary 771,987
Interest 278,665
Bank Line of Credit 14,130
Current Portion of Long-Term Debt 92,497
Notes Payable 52,400
Convertible Debenture 100,000
------------
Total Current Liabilities 2,345,548
------------
LONG-TERM DEBT
Long-Term Debt, Net of Current Portion --
------------
Total Long-Term Debt --
------------
Total Liabilities 2,345,548
------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock, $.005 par value; Authorized 9,950,000,000 Shares
8,239,031,843 Shares Issued,8,238,991,743 Shares Outstanding 41,195,160
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 37,862,356
Stock Rights 15,257,462
Treasury Stock, at cost, 40,000 shares (14,350)
Deferred Compenstation (15,875,347)
Accumulated Comprehensive Income (Loss) (119,700)
Collateral StockDeferred Compenstation (3,920,000)
Accumulated Deficit (71,839,235)
------------
Total Stockholders' Equity (Deficiency) 2,552,746
------------
------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 4,898,294
============
See notes to consolidated financial statements
-3-
UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THREE & NINE MONTHS ENDING MARCH 31, 2006 AND 2005
THREE MONTHS ENDED NINE MONTHS ENDED
2006 2005 2006 2005
---- ---- ---- ----
Revenues $ 306,911 $ 136,647 $ 807,944 $ 716,434
Cost of Goods Sold 225,573 90,568 620,263 661,878
------------------------------------------------------------------------
Gross Profit 81,338 46,079 187,681 54,556
------------------------------------------------------------------------
OPERATING EXPENSES
Selling, General and Administrative 1,632,927 1,129,148 3,616,307 2,948,642
Amortization of Deferred Compensation 2,460,238 1,422,802 8,557,971 3,217,635
Stock Based Compensation 555,126 103,800 879,576 199,563
Depreciation 9,518 9,292 29,218 25,355
------------------------------------------------------------------------
Total Operating Expenses 4,657,809 2,665,042 13,083,072 6,391,195
------------------------------------------------------------------------
Operating Loss (4,576,471) (2,618,963) (12,895,391) (6,336,639)
OTHER INCOME (EXPENSE)
Loss Recoupment from Discontinued Operations -- -- -- 63,678
Investment Income - Gain (Loss) 1,991 -- 1,991 --
Interest Income 10,854 11,252 32,781 34,131
Interest Expense (14,246) (7,469) (32,547) (46,921)
------------------------------------------------------------------------
Total Other Income (Expense) (1,401) 3,783 2,225 50,888
------------------------------------------------------------------------
Loss Before Taxes $ (4,577,872) $ (2,615,180) $ (12,893,166) $ (6,285,751)
Taxes $ -- $ -- $ -- $ --
------------------------------------------------------------------------
Net Income (Loss) $ (4,577,872) $ (2,615,180) $ (12,893,166) $ (6,285,751)
BASIC NET LOSS PER COMMON SHARES $ (0.00) $ (0.00) $ (0.00) $ (0.01)
========================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 1,633,672,972 1,191,382,909 4,130,564,405 814,372,487
========================================================================
See notes to consolidated financial statements.
-4-
Universal Express Inc, and Subsidiaries
Consolidated Statements of Cash Flows - Unaudited
For the Nine Months Ended March 2006 and 2005
2006 2005
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(12,893,166) $ (6,285,752)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 29,218 25,355
Common shares issued for services 879,576 199,563
Amortization Of Deferred Compensation 8,557,971 3,217,635
Issuance of stock for Bonus 98,500
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 5,174 (32,468)
(Increase) decrease in other current assets (320,401) (45,000)
(Increase) decrease in other receivables -- 7,700
(Increase) decrease in notes receivables 5,000 (331,523)
(Increase) decrease in loan to officer 23,210 24,199
(Increase) decrease in other assets 1,000 (3,250)
Increase (decrease) in accounts payable an accrued expenses 48,285 (126,155)
Increase (decrease) in accrued officers salary (163,070) 12,750
Increase (decrease) in accrued interest 20,790 12,199
----------------------------
Net cash provided (used) by operating activities (3,707,913) (3,324,747)
----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (1,520) (60,139)
Related Party Receivables -- (3,600)
Net Cash provided (used) by investing activities (1,520) (63,739)
----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 691,500 575,000
Issuance of stock rights for cash 4,361,500 2,758,000
Long term debt payments (34,146) (22,431)
Notes payable payments (4,500) (6,000)
Bank line of credit payments (3,922) (5,518)
Credit Card Line of Credit payment (20,316) --
----------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,990,116 3,299,051
----------------------------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1,280,683 (89,435)
CASH and Equivalents, beginning of period 19,140 100,038
----------------------------
CASH and Equivalents, end of period 1,299,823 10,603
============================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash 6,984 --
Non-Cash Financing Activities:
Issuance of common stock for deferred compensation 10,106,830 8,418,559
Issuance of common stock for conversion of stock rights 139,000 50,000
Issuance of common stock for loan Repayment -- 400,000
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, 2005.
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, 2006 and the results of operations and
cash flows for the nine months ended March 31, 2006 have been included.
The results of operations for the nine months ended March 31, 2006, are not
necessarily indicative of the results to be expected for the full year
ended June 30, 2006.
2. SEGMENT INFORMATION
Nine months ended March 31, 2006:
TRANSPORTATION/
LOGISTICS & EQUIPMENT
INTERNATIONAL LEASING PARENT
SHIPPING BROKERAGE (OTHER) CONSOLIDATED
-------- --------- ------- ------------
Revenue $ 807,944 $ 0 $ -- $ 807,944
Operating
Income/(Loss) (1,437,428) -- (11,455,738) (12,893,166)
Nine months ended March 31, 2005:
TRANSPORTATION/
LOGISTICS & EQUIPMENT
INTERNATIONAL LEASING PARENT
SHIPPING BROKERAGE (OTHER) CONSOLIDATED
-------- --------- ------- ------------
Revenue $ 363,477 $ 352,957 $ 0 $ 716,434
Operating (570,609) (367,728) (5,347,414) (6,285,751)
Loss
Assets of the segment groups are not relevant for management of the businesses
nor for disclosure.
-6-
3. CAPITAL STOCK
During the quarter ended March 31, 2006 the Company issued
2,269,832,500 shares of common stock. Of such shares issued, 27,000,000
were sold, 2,029,400,000 shares were issued for deferred services,
206,970,000 for advisory services, 4,000,000 for stock rights and
2,462,500 for bonuses.
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/Postal Nation UniversalPost International Courier Service
Universal Express Logistics, Inc.
Virtual Bellhop(TM)
Luggage Express(TM)
LEAP (Luggage Express Associate Program division)
MadPackers, Inc.
Universal Express Capital Corp.
Universal Cash Express
Universal Express Properties
MARKETPLACE
A challenging global economy has grown over the past decade. Internet, catalog
and retail sales continue to mandate an inexpensive and responsive outsourced
final mile Domestic and International delivery network. That innovative and
outsourced final mile network continues to be addressed by Universal Express and
it has undergone visionary expansion in the last decade. Strong strategic
relationships are currently being established with companies and manufacturers,
thus strengthening its long term private postal network, its luggage business
and its logistical courier network.
-7-
Members of the UniversalPost's 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.
Luggage Express has begun to separate passengers from suitcases and offer a
safer and more pleasurable travel experience.
These courier companies and private postal centers form a highly fragmented
cottage industry. Universal Express believes that since this industry generates
over $14 billion in sales and presently consists of more than 30,000 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 and couriers nationwide. These members are electronically connected to
other members via our new website, new sales and products.
Our company believes that an affordable outsourced distribution system is needed
to suit consumers' future 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 outsourced and innovative 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 9,000 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.
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.
-8-
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. Today's 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 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.
Universal Cash Express, a division of Universal Express Capital, is a leader in
the pre-paid PIN based products industry. Cash Express develops products and
services for companies wishing to expand their current market penetration into
this exciting and growing market segment. Cash Express employs industry experts
that are able to advise these companies on which products are desired by this
market niche. Cash Express is further able to assist our corporate clients by
designing the perfect product for them to accelerate their profit potential.
The Company is also affiliated with The Coalition for luggage Security. The
Coalition is made of companies and individuals with the mission of creating
safer air travel by separating luggage from passengers. The Founder and
President of the Coalition is Richard Altomare, who is also the CEO and Chairman
of the Company. Currently, his white paper entitled, "More Safety, Less Hassle
for American Travelers: A Private Sector Solution" has been circulated in
Congress. You can read more about the Coalition and this white paper at
WWW.LUGGAGESECURITYCOALITION.COM.
UNIVERSALPOST(TM) NETWORK- THE PRIVATE POSTAL NETWORK
UniversalPost Network, 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 Network 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.
-9-
Individual Services and Products
o Flowers/Gift Baskets
o Corrugated & Packaging
o Equipment Leasing
o Moving Supplies
o Customized Corrugated
o Parcel Insurance
o Credit Card Processing
o Check Processing
o Visa - MasterCard
o Discounted Supplies
o Joint Promotions
o Fingerprinting
o Credit Union
o Consolidated Shipping rates
o Van Leasing
On March 14, 2006, The Company announced its new division, PostalNation, a Web
Site and primary search engine for all postal store members, vendors and
consumers for product and service needs offered through UniversalPost.
On April 25, 2006,the Company announced that its divisions Universal Post and
PostalNation had agreed with QuikDrop International to offer its technology and
hardware for eBay marketing for customers of postal store members throughout the
United States.
UNIVERSALPOST(TM) NETWORK- INTERNATIONAL COURIER SERVICE
UniversalPost Network, the International Courier Service, is an alliance of
independently owned and operated express courier services operating in 268
cities in 120 countries. UniversalPost Network 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 Network members offer flexible,
customized International services to meet a client's specific distribution
needs. Instead of operating our own costly fleet, UniversalPost Network 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 Network are totally
dependent upon their suppliers' shipping. The obvious synergy between
UniversalPost, the International Courier Service and UniversalPost Network, the
private postal network, enhances our unusual position in the shipping service
industry.
-10-
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, making domestic luggage to
exceed 3 billion suitcases. Luggage Express and Virtual Bellhop are indeed
poised for luggage-free travel.
On October 20, 2005, The Company announced Luggage Express' innovative revenue
program for the selling of Luggage Express Associate Program (LEAP) territories
to investors and business entrepreneurs.
On November 2, 2005, the Company announced the development of a logistic
subsidiary MadPackers, Inc. for the futuristic form of shipping personal items
for college and university students.
On February 10, 2006, the Company announced the engagement of Francorp, Inc. the
premier franchising organization to guide and assist the Company in the
franchising program for its L.E.A.P. (Luggage Express Associate Program)
division.
-11-
On March 10, 2006, the Company announced the completion of the final phase of
its customer management system for its various businesses, HANDLES-06.
On March 14, 2006, the Company's college delivery service, MadPackers, announced
its participation at the invitation of numerous Fortune 500 Companies to present
its programs directly at College Spring Break 2006.
On April 13, 2006, the Company announced that MadPackers, its college shipping
and logistics division, had launched its promotional tour of universities.
On April 25, 2006, Madpackers announced a signed agreement with Florida Atlantic
University.
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, a division of Universal Express Capital, is a leader in
the pre-paid PIN based products industry. Cash Express develops products and
services for companies wishing to expand their current market penetration into
this exciting and growing market segment. Cash Express employs industry experts
that are able to advise these companies on which products are desired by this
market niche. Cash Express is further able to assist our corporate clients by
designing the perfect product for them to accelerate their profit potential.
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).
On February 27, 2006, the Company announced the signing of a letter of intent to
purchase a South Florida based fuel and wholesale jobber, which servicing 144
gas stations and directly owns 46 of them.
-12-
RESULTS OF OPERATIONS - NINE MONTHS ENDED MARCH 31, 2006.
NINE MONTHS ENDED
-----------------
2006 2005
---- ----
Revenues 809,935 363,477
Logistics & International shipping -
Transportation / Equipment Leasing -- 352,957
Other -
Cost Of Goods Sold 620,263 661,878
Selling, General and Administration 13,053,854 6,365,840
Depreciation & Amortization 29,218 25,355
During the nine months ended March 31, 2006 operating revenues increased to
$809,935 from $716,434. This increase is due mainly to increased volume in
Logistics & Courier Services.
Cost of revenues were $620,263 and $661,878 respectively.
LIQUIDITY AND CAPITAL RESOURCES - FOR THE NINE MONTHS ENDED MARCH 31, 2006.
The net proceeds from investments in the Company was approximately $5,053,000.
Approximately $3,707,913 was used in its operating activities.
Until the UniversalPost Network, Postal Nation, Virtual Bellhop, Luggage
Express, MadPackers, USXP Capital, UniversalPost International Delivery,
Universal Express Properties and the Company's other businesses, are fully
developed, 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 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.
On October 5, 2005, the Company sued Capitalliance Financial Services LLC, Union
Commercial LLC and others for $269 Million for fraud, false documents and
misrepresentation.
On January 3, 2006, the Company announced the filing of a $160 Million lawsuit
against Coach Industries Group (CIGI), its subsidiary Corporate Development
Services and others for fraud and breach of contract.
The Company is involved in several lawsuits with vendors, suppliers, and
professionals. These claims are disputed by the Company. The Company believes
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 -- NONE
-14-
SIGNATURES:
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company's report on Form 10-QSB has been signed below by the following person on
behalf of the registrant and in the capacities and on the dates indicated.
UNIVERSAL EXPRESS, INC.
Date: May 5, 2006 /S/ RICHARD A. ALTOMARE
-----------------------
Richard A. Altomare, President
and Chairman of the Board
-15-