Exhibit 99.1

                                  Press Release


Pennexx Foods, Inc. Provides Update on Credit Agreement Default

PHILADELPHIA--May  15,  2003--Pennexx  Foods, Inc. (OTC Bulletin Board: PNNX), a
leading  provider of case-ready  meat to retail  supermarkets  in the Northeast,
announced today that its lender, Smithfield Foods, Inc., has advised the Company
of its  intention  to sell the  collateral  for its loan on May 30,  2003 unless
Smithfield  receives  immediate  payment  of all  amounts  due  under  the  loan
(approximately $11.5 million plus satisfaction of the Smithfield guaranty of the
operating  lease for  approximately  $11.9  million) or unless the parties reach
another mutually satisfactory resolution of this matter.

The Company is discussing financial  alternatives with potential investors which
would  enable  the  Company to obtain a  Smithfield  forbearance  agreement,  or
alternatively,  to repay the Smithfield  obligations in full.  Although  certain
investors  have  expressed  preliminary  interest in making such an  investment,
there is no assurance  that the Company  will  succeed in this effort.  Any such
investment may be dilutive to existing shareholders.

"We are working  diligently to put this financial hurdle behind us and are eager
to turn our attention  back to satisfying  the growing demand from our customers
for  case-ready  meat.  The nature and scope of the  discussions we have held to
date encourage us to believe that we may reach a satisfactory  resolution," said
Mike Queen, chairman and chief executive officer of Pennexx.

The Company is past due by 15 days on an interest  payment due to Smithfield and
also failed to make a required  prepayment of the excess loan advance created as
a result of reductions in the Company's eligible inventory and eligible accounts
receivable.  The Company is also in default of the net worth  covenant under the
Smithfield  credit  agreement.  The sale of the collateral,  if it should occur,
would, in effect, terminate the Company's business.

The Company also failed to pay its monthly  operating lease payment to Commerce,
which was due on May 1, 2003 in the amount of approximately $151,000.

About Pennexx

Established  in 1999,  Pennexx Foods,  Inc. is a leading  provider of case-ready
meat to retail  supermarkets  in the  northeastern  U.S.  The company  currently
provides  case-ready meat within a 300-mile radius of its plants to customers in
the  Northeast  in order to assure  delivery of product  with an extended  shelf
life. The company cuts, packages,  processes and delivers case-ready beef, pork,
lamb and veal in  compliance  with the United States  Department of  Agriculture
("USDA")  regulations.  Pennexx customers  include many significant  supermarket
retailers.

Safe Harbor

Certain  statements  made  herein  that  use the  words  "estimate",  "project",
"intend", "expect",




"believe", "prospects" and similar expressions are intended to identify
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve known
and unknown risks and uncertainties which could cause the actual results,
performance or achievements of the Company to be materially different from those
which may be expressed or implied by such statements, including, among others,
risks or uncertainties associated with the market for the Company's products,
and other laws, changes in competition and the loss of key personnel. For
additional information regarding these and other risks and uncertainties
associated with the Company's business, reference is made to the Company's
reports filed from time to time with the Securities and Exchange Commission.

- --------------------------------------------------------------------------------
Contact:
     Pennexx Foods, Inc.
     Michael Queen, 215/743-4331
       or
     Lippert/Heilshorn & Associates, Inc.
     Investor Relations:
     Jody Burfening, 212/838-3777
     jks@lhai.com
       or
     Lippert/Heilshorn & Associates, Inc.
     Media:
     Chenoa Taitt, 212/838-3777
     ctaitt@lhai.com