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, 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
incorporation or organization) Identification Number)
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 December 31, 2006:
- --------------------------------------------------------------------------------
$63,833,773
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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 December 31, 2006
- --------------------------------------------------------------------------------
Class "A" 15,981,433,343
Class "B" 1,280,000
UNIVERSAL EXPRESS, INC.
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet - December 31, 2006 3
Consolidated Statement of Operations -
Six months ended December 31, 2006 4
Consolidated Statement of Cash Flows -
Six months ended December 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 14
PART II - OTHER INFORMATION 15
SIGNATURES 17
2
UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31,
ASSETS 2006
----
CURRENT ASSETS:
Cash and Equivalents $ 335,137
Accounts Receivable, net of reserve of 423,853
Other Current Assets 2,859,576
------------
Total Current Assets 3,618,566
------------
PROPERTY AND EQUIPMENT
Computers and Equipment 398,602
Less Accumulated Depreciation (43,251)
------------
Net Propert and Equipment 355,351
------------
OTHER ASSETS:
Loan to Officer 707,791
Related Party Receivables 906,000
Notes Receivable 848,053
Customer List 650,000
Goodwill 1,558,276
Other Assets 42,841
------------
Total Other Assets 4,712,961
------------
TOTAL ASSETS $ 8,686,878
============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts Payable $ 839,599
Accrued Expenses
Trade 178,832
Interest 297,970
Bank Line of Credit 322,920
Accrued Officers' Salary 269,231
Current Portion of Long-Term Debt 81,998
Notes Payable 936,809
Convertible Debenture 100,000
------------
Total Current Liabilities 3,027,359
------------
Long-Term Debt, Net of Current Portion --
------------
TOTAL LIABILITIES 3,027,359
------------
MINORITY INTEREST IN SUBSIDIARIES (196,389)
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock, $.005 par value; Authorized 16,950,000,000 Shares
15,981,433,343 Shares Issued,15,981,393,343 Shares Outstanding 79,907,167
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 21,038,087
Stock Rights 22,389,192
Treasury Stock, at cost, 40,000 shares (14,350)
Deferred Compenstation (23,041,472)
Accumulated Comprehensive Income (Loss) (157,558)
Collateral Stock (3,920,000)
Accumulated Deficit (90,351,558)
------------
Total Stockholders' Equity (Deficiency) 5,855,908
------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 8,686,878
============
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, 2006 AND 2005
THREE MONTHS ENDED SIX MONTHS ENDED
2006 2005 2006 2005
---- ---- ---- ----
Revenues $ 992,435.00 281,861 1,474,333 $ 501,033
Cost of Goods Sold 825,759 227,167 1,139,434 394,690
----------------------------------------------------------------------
GROSS PROFIT 166,676 54,694 334,899 106,343
----------------------------------------------------------------------
OPERATING EXPENSES
Selling, General and Administrative 2,298,360 976,560 4,184,999 1,983,380
Amortization of Deferred Compensation 4,893,003 3,949,454 8,723,850 6,097,733
Stock Based Compensation -- 141,350 -- 324,450
Depreciation 18,236 9,197 36,577 19,700
----------------------------------------------------------------------
TOTAL OPERATING EXPENSES 7,209,599 5,076,561 12,945,426 8,425,263
----------------------------------------------------------------------
OPERATING LOSS (7,042,923) (5,021,867) (12,610,527) (8,318,920)
----------------------------------------------------------------------
OTHER INCOME (EXPENSE)
Other Income 5,500 -- 5,500 --
Interest Income 10,460 10,907 21,030 21,927
Interest Expense (6,695) (9,554) (13,519) (18,301)
----------------------------------------------------------------------
9,265 1,353 13,011 3,626
----------------------------------------------------------------------
LOSS $ (7,033,658) $ (5,020,514) $ (12,597,516) $ (8,315,294)
MINORITY INTEREST IN SUBSIDIARIES 53,422 -- 55,609 --
----------------------------------------------------------------------
NET LOSS $ (6,980,236) $ (5,020,514)# $ (12,541,907) $ (8,315,294)
COMPREHENSIVE LOSS - NET OF TAX -- -- (11,099)
----------------------------------------------------------------------
NET COMPREHENSIVE LOSS $ (6,980,236) $ (5,020,514) $ (12,553,006) $ (8,315,294)
======================================================================
BASIC NET LOSS PER COMMON SHARES $ (0.00) $ (0.00) $ (0.00) $ (0.00)
======================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 14,918,840,953 2,000,859,028 14,179,025,192 2,764,413,278
======================================================================
See notes to consolidated financial statements.
4
UNIVERSAL EXPRESS INC, AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
FOR THE SIX MONTHS ENDED DECEMBER 2006 AND 2005
2006 2005
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(12,553,006) $ (8,315,294)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 43,251 19,700
Common shares issued for services 215,500 324,450
Amortization Of Deferred Compensation 8,723,850 6,097,733
Forgiveness of Officer Loan 35,947 37,479
Adjustment to Net Income (46,925) --
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (345,587) (27,584)
(Increase) decrease in other current assets (2,128,720) 1,152
(Increase) decrease in notes receivables -- 5,000
(Increase) decrease in loan to officer (21,029) (21,925)
(Increase) decrease in other assets (12,973) --
Increase (decrease) in accounts payable and accrued expenses (41,910) 112,776
Increase (decrease) in accrued officers salary 267,184 (29,973)
Increase (decrease) in accrued interest 12,667 13,950
----------------------------
Net cash provided (used) by operating activities (5,851,751) (1,782,536)
----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (66,957) (1,520)
Loan From Officer -- 130,000
Credit Card Line of Credit 321,845 29,067
Notes Payable 983,973 --
Purchase of Property and Equipment (124,813) --
Purchase of Customer List (650,000) --
Acquisition of Goodwill (1,301,949) --
----------------------------
Net Cash provided (used) by investing activities (837,901) 157,547
----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 421,500
Issuance of stock rights for cash 5,037,768 1,208,000
Long term debt payments (8,831) (12,500)
Notes payable payments (94,664) (1,500)
Bank line of credit payments (11,943) (9,004)
----------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,922,330 1,606,496
----------------------------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (1,767,322) (18,493)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 2,102,459 19,140
----------------------------
CASH AND EQUIVALENTS, END OF PERIOD 335,137 647
============================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
----------------------------
Interest paid in cash $ 852 $ 4,351
============================
NON-CASH FINANCING ACTIVITIES:
Issuance of common stock for deferred compensation 12,918,240 3,261,350
Issuance of common stock for conversion of stock rights -- 99,000
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, 2006.
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, 2006 and the results of operations
and cash flows for the six months ended December 31, 2006 have been
included.
The results of operations for the six months ended December 31, 2006, are
not necessarily indicative of the results to be expected for the full year
ended June 30, 2007.
2. Segment Information
Six months ended December 31, 2006:
Transportation/
Logistics & Equipment
International Leasing Parent
Shipping Brokerage (Other) Consolidated
------------- -------------- ------- ------------
Revenue $1,474,333 $ --0-- $ --0-- $1,474,333
Operating
Income/(Loss) (1,356,952) --0-- (11,196,054) (12,553,006)
Six months ended December 31, 2005:
Transportation/
Logistics & Equipment
International Leasing Parent
Shipping Brokerage (Other) Consolidated
------------- -------------- ------- ------------
Revenue $ 501,033 $ --0-- $ --0-- $ 501,033
Operating
Loss (491,106) (3,345) (7,820,843) (8,315,294)
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, 2006 the Company issued
1,987,500,000 shares of common stock. Of such shares issued, 1,953,000,000
were issued for deferred services, and 34,500,000 for services.
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)
Luggage Express Found
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.
A new subsidiary; Luggage Express Found's mission is to deliver luggage that has
been lost by the airlines, to customers in the most efficient and convenient way
possible. Utilizing a fleet of trucks together with the knowledge of the
transportation industry, Luggage Express Found takes the frustration out of
missing baggage. Luggage Express Found includes Global Trucking, Airport
Alliance and American Delivery Systems.
MadPackers(TM) is a service oriented company that is assisting the college world
by moving students and their belongings into their rooms ahead of time; creating
a fluid move in process on the first days of school for students, parents and
administrations across the country through a "door to dorm(TM)" shipping
service. MadPackers takes students' belongings from their home and sends them
directly to their college residences. They also take students' belongings back
home after the semester has ended. They store students' belongings during
winter, summer, and study abroad breaks, as well as ship to study abroad and
spring break destinations. MadPackers provides students, parents, and
administrations an innovative solution to the move in process on and off
campuses across the country.
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:
9
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.
Individual Services and Products
o Flowers/Gift Baskets
o Corrugated & Packaging
o Moving Supplies
o Customized Corrugated
o Parcel Insurance
o E-Bay Power Selling Franchises
o Certified/Registered E-mail's
o Personalized Postage
o Discounted Supplies
o Joint Promotions
o Fingerprinting
o Credit Union
o Consolidated Shipping rates
o Supplemental Health Insurance
o Print Certified Mail
o On-line Purchasing
o Van Sales
o Visa Debit Card
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.
10
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.
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.
11
On October 24, 2006, The Company announced that Virtual Bellhop had entered into
a strategic partnership with Windstar Cruises.
On November 2, 2006, the Company announced that Luggage Express has begun
advertising with the National Hockey League team, the Florida Panthers.
On November 2, 2006, the Company announced the completion of its Uniform
Offering Circular and Franchise Agreement for its Luggage Express Associates
Program (LEAP.
On November 2, 2006, the Company announced the acquisition of the business of
American Delivery Systems, a baggage delivery company operating out of
Hollywood, Fort Lauderdale International Airport, delivering lost or misplaced
luggage from airlines to travelers.
On December 12, the Company announced the Luggage Express holiday gift card
program.
On December 28, the Company announced its sponsorship of the Signalsport BMW
race team.
On December 28, the Company announced that Luggage Express had partnered with
THEGREENHOUSE luxury destination spas.
On February 5, 2007, the Company a partnership between Luggage Express and
Castro Travel, with nine offices from California to London to the Philippines,
with some of the largest companies in the world as clients.
MadPackers
MadPackers(TM) is a service oriented company that is assisting the college world
by moving students and their belongings into their rooms ahead of time; creating
a fluid move in process on the first days of school for students, parents and
administrations across the country through a "door to dorm(TM)" shipping
service. MadPackers takes students' belongings from their home and sends them
directly to their college residences. They also take students' belongings back
home after the semester has ended. They store students' belongings during
winter, summer, and study abroad breaks, as well as ship to study abroad and
spring break destinations. MadPackers provides students, parents, and
administrations an innovative solution to the move in process on and off
campuses across the country.
On November 2, 2006, the Company announced that Madpackers would launch a Door
to Dorm" concert tour covering 25 colleges.
On November 2, 2006, the Company announced the introduction by Madpackers of its
student based service expansion into areas outside the shipping and storage
areas.
On December 11, 2006, the Company announced the Madpackers' Holiday Gift Card
for discount services for parents and students.
On December 12, 2006, the Company announced Madpackers' Campus Rep program.
12
On January 29, 2007, the Company announced that Madpackers had acquired Smart
Movers, an 11-year old shipping and storing business for college students
serving 23 schools in the northeast.
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 the establishment of its real estate division in 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).
13
Results of Operations - Six Months ended December 31, 2006.
Six Months Ended
----------------
2006 2005
---- ----
Revenues
Logistics & International shipping - 1,474,333 501,033
Transportation / Equipment - -0- -0-
Leasing -0- -0-
Other - -0- -0-
Cost Of Goods Sold 1,139,434 394,690
Selling, General and Administration 4,184,999 1,983,380
Depreciation & Amortization 36,577 19,700
During the six months ended December 31, 2006 operating revenues increased to
$1,474,333 from $501,033. This increase is due mainly to the acquisition of
Global Trucking Services, Inc.
Cost of revenues were $1,139,434 and $394,690 respectively.
Liquidity and Capital Resources - for the six months Ended December 31, 2006.
The net proceeds from investments in the Company was approximately $5,037,768.
Approximately $5,851,751 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
14
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 for $168 Million in 2003 against North American
Airlines and its President Mr. McKinnon in New York Supreme Court, Queens
County, New York, for breach of contract and fraud, plus punitive damages. This
suit was predicated upon Mr. McKinnon's actions following the signing of a
contract for Universal to purchase this charter airline, the breach of that
contract in various ways by Mr. McKinnon and Mr. McKinnon's attempts to
frustrate the accomplishment of the proposed acquisition. This case is pending.
In 2005, the Company filed a lawsuit for $269 Million against Capitalliance
Financial Services and individuals and firms associated with Capitalliance in
New York Supreme Court, New York County. This suit was predicated upon a series
of failed transactions proposed to our Company, which were grounded on fraud,
misrepresentation and a series of forged instruments and documents. This case is
pending.
In 2006, the Company brought an action in New York Supreme Court, County of
Albany, for $160 Million against Coach Industries Group and related companies.
This suit is predicated on fraud and breach of contract, with respect to the
violation of a "right of first refusal" our Company had to purchase a courier
management company, Corporate Development Services (formerly, SubContracting
Concepts, Inc.). This case is pending.
On March 2, 2004, the Company brought suit against the SEC in Federal Court in
Florida seeking damages from "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. These matters are pending. The
Company and its President have been leading opponents of the growing "naked
shorting" scandal for ten years and has joined with many other public companies
in focusing on this national problem in press releases and public forums. It is
significant that the Company has received very substantial jury verdicts and
judgments concerning this problem, as indicated below.
15
On July 26, 2001, a jury in the Circuit Court of the Eleventh Circuit, Dade
County, Florida awarded the Company a damage verdict after trial, of $87,622,000
compensatory damages, $275,000,000 punitive damages and $26,286,000 pre-judgment
interest, or a total judgment entered of $389 Million, against Select Capital
and various stock manipulators and "naked shorters." This judgment continues to
grow with post-judgment interest. On August 23, 2003, another jury in the
Circuit Court, Dade County, Florida, after trial, awarded another verdict to the
Company in the total amount of $137 Million, against South Beach Financial and
related stock manipulators and "naked shorters". Judgment was entered in favor
of the Company upon this verdict. This judgment continues to grow with
post-judgment interest. These judgments were non-appealable. Collection efforts
on behalf of the Company with respect to these judgments are ongoing and the
Company believes that the judgments are substantially collectable.
The Company is involved in several lawsuits with vendors, suppliers, and
professionals. These claims are all disputed by the Company. The Company
believes that the 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 8-K dated October 18, 2006.
Current Report filed on Form 8-K/A dated November 22, 2006.
16
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: February 20, 2007 /s/ Richard A. Altomare
-----------------------
Richard A. Altomare, President
and Chairman of the Board