U.S. 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 September 30, 1999

                         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 Ident Number)
incorporation or organization)

 20 South Terminal Drive, Plainview, New York                  11803
----------------------------------------------               ----------
    (Address of principal executive offices)                 (Zip Code)

     Registrant's telephone number, including area code (516) 349-1300.
                                                        ---------------

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 September 30, 1999:

--------------------------------------------------------------------------------
                                   $ 2,717,816
--------------------------------------------------------------------------------

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 September 30, 1999:
--------------------------------------------------------------------------------
Class "A"                                          10,065,988
Class "B"                                           1,280,000



<PAGE>





                             UNIVERSAL EXPRESS, INC.
                             -----------------------

                                      INDEX

                                                                        Page
                                                                        Number

PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements

 Balance Sheet - September 30, 1999                                       1
 Combined Statement of Operations - Three months
ended September 30, 1999                                                  2

 Combined Statement of Cash Flows -- Three months
ended September 30, 1999                                                  3

 Notes to Combined Financial Statements                                   4

Item 2.  Management's Discussion and Analysis of
Financial Condition and Results of Operations                             4

PART II - OTHER INFORMATION                                              12


SIGNATURE                                                                13









<PAGE>




UNIVERSAL EXPRESS, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT SEPTEMBER 30, 1999
                                                                       ASSETS
                                                                       ------
CURRENT ASSETS:
Cash                                                               $   (108,380)
Accounts receivable, net of allowance
for doubtful accounts of $182,400                                       693,922

Inventory                                                                98,849
Loans & Notes receivable                                              1,333,094

Other, Assets                                                           303,079
                                                                   ------------
            TOTAL CURRENT ASSETS                                   $  2,320,564

FURNITURE, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, net                                                       205,445
REORGANIZATION VALUE, net of amortization                               106,071
GOODWILL, net                                                           560,355
Investment A/C                                                        1,293,194
                                                                   ------------
             TOTAL ASSETS                                          $  4,485,629
                                                                   ============

LIABILITITES AND STOCKHOLDERS' EQUITY
-------------------------------------

CURRENT LIABILITIES
Accounts payable and accrued expenses                              $  2,335,612
Taxes payable                                                           176,548
Other                                                                    98,444
Loans/Notes Payable                                                   1,171,616
Convertible Debentures                                                  189,000
Long-Term Liabilities                                                   194,611
                                                                   ------------
TOTAL LIABILITIES                                                  $  4,165,831
                                                                   ============

STOCKHOLDERS' EQUITY
Common stock, Class A, $0.005 par value;
     authorized 147,000,000 shares;
     10,065,988 issued and outstanding                             $     50,330
Common stock, Class B, $0.005 par value;
     authorized 3,000,000 shares,
     1,280,000 issued and outstanding                                     6,400
Additional paid-in capital                                           21,756,781
Cash received for stock rights                                        1,640,002
Deferred compensation related to
     stock issued for services                                       (1,419,299)
Accumulated deficit                                                 (21,714,414)
                                                                   ------------
            TOTAL STOCKHOLDER'S EQUITY                                  319,798
                                                                   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $  4,485,629
                                                                   ============


                                       1

<PAGE>



UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

INCOME:                                                1999              1998
-------                                                ----              ----

Merchandise and service income                    $   102,591       $   138,299
Ticket sales                                          281,176           497,539
Delivery Services                                     950,677              --
Other income                                             --                --
TOTAL INCOME                                        1,334,444           635,838


COST AND EXPENSES:
------------------

Cost of goods and services                          1,028,256           430,034
Selling, general and administrative                 1,295,957           901,953
Depreciation and amortization                          79,681            79,037
                                                  -----------       -----------
                                                    2,403,894         1,411,024


LOSS BEFORE INTEREST                               (1,069,450)         (775,186)
                                                                    -----------

INTEREST INCOME                                          --                --
INTEREST EXPENSE                                       (3,180)           (3,451)


LOSS FROM CONTINUING OPERATIONS                    (1,072,630)         (778,637)
LOSS FROM DISCONTIUED OPERATIONS                            0                 0
                                                  -----------       -----------

NET LOSS                                          $(1,072,630)      $  (778,637)
                                                  ===========       ===========

LOSS PER COMMON SHARE
Loss from continuing operations                   ($     0.11)      ($     0.22)
Loss from discontinued operations                        --                --

Net Loss                                          ($     0.11)      ($     0.22)
Weighted average number of
shares used in calculations                       $ 9,428,670       $ 3,542,908
                                                  ===========       ===========


                                       2

<PAGE>



UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

CASH FLOWS PROVIDED BY OPERATIONS                       1999            1998
                                                        ----            ----

Net Loss                                            $(1,072,630)   $  (778,637)
Adjustment to reconcile net loss to net
 cash used by operating activities:

Common stock issued for services rendered               198,150        179,565
Depreciation and amortization                            79,681         79,037
                                                    -----------    -----------
                                                       (794,799)      (520,035)
Change in assets and liabilities:
 (Increase)/Decrease in restricted cash                    --             --
 (Increase)/Decrease in accounts receivable            (156,788)       (30,998)
 (Increase)/Decrease in inventory                         1,313           --
 (Increase)/Decrease in loan to officers                   --          (36,494)
 (Increase)/Decrease in notes receivable                  1,151        (31,299)
 (Increase)/Decrease in deferred expenses
     and other assets                                      --             --
 Increase/(Decrease) in accounts payable
     and accrued expenses                              (268,537)        13,865
Increase/Decrease in taxes payable                       (4,453)        (3,529)

 Increase/(Decrease) in other liabilities               (32,307)       (15,419)
                                                    -----------    -----------

Cash provided (used) by operations                   (1,254,420)      (623,909)
                                                                   -----------

CASH USED IN INVESTING ACTIVITIES
Acquisition of furniture, equipment,
     and leasehold, improvements                           --             --
                                                    -----------    -----------

CASH PROVIDED BY FINANCING ACTIVITIES
Issuance of common stock                                648,876        250,000
Net proceeds from issuance of convertible debt             --             --
Proceeds from notes and loans payable                    60,000         66,000
Repayment of notes and other liabilities                   --         (168,500)
Proceeds From Stock Rights                              400,000        250,000
                                                    -----------    -----------

NET INCREASE (DECREASE) IN CASH                        (145,544)      (226,409)

CASH-Beginning of period                                 37,164        227,892
                                                    -----------    -----------

CASH-End of period                                  $  (108,380)   $     1,483
                                                    ===========    ===========


                                       3


<PAGE>


                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES
                    ----------------------------------------
                          Notes To Financial Statements
                                   (Unaudited)


1.    BASIS OF PRESENTATION
---------------------------

Reference is made to the Company's Consolidated financial statements as of June
30, 1999 and for the fiscal year then ended, filed with the United States
Securities and Exchange Commission for a complete discussion of the Company's
significant accounting policies and other matters.

The accompanying unaudited consolidated interim financial statements reflect all
adjustments that, in the opinion of management are necessary for a fair
presentation of financial position as of September 30, 1999, and results of
operations for the nine months then ended.


                      MANAGEMENT DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


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.

The business of Universal Express, Inc. (the "Company") has undergone major
transitions in recent years.

On May 7, 1999, the Company acquired 51% of the capital stock of SkyWorld
International Courier (SkyNet Miami), in consideration for a note of $450,000
payable by the Company in eighteen monthly installments of $25,000 each
commencing June 15, 2000. In addition, the Company agreed to payoff a $500,000
loan to SkyNet Miami from a bank. The Company also provided SkyNet Miami with
$600,000 of additional working capital. No capital stock consideration from the
Company was involved in this transaction.

SkyNet Miami is part of an international shipping network specializing in
corporate discount pricing to its customers. Its revenues for its most recent
fiscal year were in excess of $5,000,000.

The Company believes that that acquisition of SkyNet Miami will benefit the PBC
Network by providing PBC store owners with reduced international shipping rates
over their present vendors.




                                       4

<PAGE>


Management has developed other new ancillary businesses to support its core
packaging and shipping businesses.

In November, 1999, the Company announced the signing of an agreement with
Imaging Technology Solutions, L.L.C. ("NetEx") pursuant to which NetEx will
provide services for the PBC Network. NetEx is a full-featured software and
service combination designed to securely transmit any document, including paper,
graphical images, hand written documents and electronic media via the Internet.
The Company believes that NetEx is the first Internet-based document delivery
service to seemlessly integrate a patented imaging platform, real-time document
linking, telephone notification and tiered digital security in an easy-to-use
Internet-ware graphical user interface. Accordingly, the Company believes that
NetEx provides a secure, expedient, and economical alternative to faxes,
overnight couriers and traditional email. The Company is offering to raise for
the "NetEx Program" and the PBC Network members $1.7 million dollars, in
increments based on a roll out schedule for the program and equipment, for the
members of the PBC Network throughout the United States. The Company will
provide each member store owner with a scanner valued at $300 for the members to
begin offering their customers the program for a fee based on usage. The PBC
Network will earn revenues based on the usage of the program by the members and
their customers.

In December, 1999, the Company announced the signing of a non-binding letter of
intent with Talk Visual Corp. to enable the PBC Network to offer its members
videocalling systems for the use of their customer. There can be no assurance
that the Company will reach a definitive agreement with Talk Visual Corp.

The Company believes its strategy of developing PBCNetwork is unique to the
private postal industry. The Company believes that PBCNetwork has established
itself as a provider of quality products and services that benefit the owners of
private postal businesses. In order for PBCNetwork to continue to provide
high-quality products and services essential to today's market needs, the
Company believes that it is necessary to develop a strategy for the "third wave"
of the industrial revolution - the Internet. While PBCNetwork members do not
currently compete with traditional overnight couriers, the Company believes that
NetEx will provide them with the opportunity to increase revenues through the
use of NetEx's technology for a minimal investment.

The Company's Web Site is www.usxp.com.

The Company purchased the Entertainment division of U.S. Transportation Systems,
Inc. (USTS) in 1997. The division consisted mainly of: Downtown Theatre Ticket
Agency, Inc., or Advance Entertainment (now known as "Manhattan Concierge"),
which provides theater, sports and special events tickets and concierge
services. The Company intends to incorporate this division into its expanding
list of services to the members of its PBC Network. These services are marketed
through toll-free phone numbers (1-888-NYSHOWS, 1-800-NYSHOWS AND
1-800-THE-SHOW) and Manhattan Concierge's web site (www.manhattanconcierge.com).


                                       5

<PAGE>



This concierge business is a nationally promoted source for high visibility
venues such as the Olympics, U.S. Open, Super Bowl and the World Series. It has
been serving corporate and individual clients throughout the United States for
over fifty-three years. The Company intends to incorporate this value-added
service into the PBC Network expanding menu of offerings to its member stores
while attempting to increase Manhattan Concierge's own business presence in the
entertainment industry.

In 1994, the Company acquired an advertising agency, Images Design & Marketing
(Images). This agency is the in-house marketing and promotional department of
the Company. The service of Images is primarily utilized to maximize the
Universal Express and the PBC Network's names and trademarks. Images is also
expected to reduce advertising costs for the PBC Network members by eliminating
the "agency commissions" paid to advertising agencies by printers and other
sources of media.

Management is now concentrating on raising new capital and focusing on new
ventures, including the PBC Network and SkyNet Miami.

Management views this fiscal year as a period of transition and anticipates
growth based upon its decision to concentrate on core business development
through the PBC Network and SkyNet Miami.

USXP's principal subsidiaries and divisions include:
Private Postal Network.com
The Postal Business Center Network.com
Manhattan Concierge
SkyNet Miami
WorldPost Network.com
Images Design and Marketing
UniqueNet, Inc.
Packaging Plus Services, Inc.

PRIVATE POSTAL NETWORK.com
--------------------------

On May 15, 1999, the name of the Association of Packagers and Carriers, APAC was
changed to the Private Postal Network.com (PPN), with two divisions, Postal
Business Center Network.com (PBC network.com) and an international shipping
division, WorldPost Network.com.

Private postal and business service centers form a highly fragmented cottage
industry. The Company believes that this industry generates over $5 billion in
sales annually and consists of more than 15,000 independent operators. The
Company believes there is a market opportunity for the development of an
association with the goal of unifying and organizing independent and franchised
postal


                                       6


<PAGE>

stores nationwide. PBC Network members are connected to other members and the
PBC Network Headquarters via the PBC Web Site (PBCNetwork.com) or by telephone
at "1-888-873-2722". The PBC Web Site is utilized not only by members but also
will be used by the general public. Only one PBC Network store per Zip Code will
be accepted, thus creating internal quality control standards.

The PBC Network, with the help of other media outlets, found that the emergence
of E-Commerce is being overlooked by the big retail outlets. The Company
believes these firms have not at this point moved well to address the online
focus that is gaining momentum. As the online population becomes more frequent
and E-Commerce gains speed, the Company believes that the PBC Network will have
laid the foundation that will be needed to provide the necessary adaptations for
future commerce.

The Company believes that business-to-consumer e-commerce will benefit from
consumers seeking the lowest possible price, convenience and public acceptance
over fears of insecure transactions and the difficult task of converting these
"eyeballs" into transactions.

The Company believes that E-commerce success factors such as quality domain
name, first mover advantage, capital to build a brand name, convergence with an
established brick and mortar player and the emergence of a leader in most
categories will determine the survival of the fittest.

The Company believes that industries will turn to the Internet to improve their
existing business models or introduce an innovative one.

As e-commerce grows, someone must deliver the purchased goods to the consumer.
The Company believes that companies such as FedEx, UPS and the U. S Postal
Service are well positioned. The opportunity in this market has drawn lots of
attention, as "Others" are quickly developing to snatch-away business from these
companies. Although traditional shipping companies have been handling most
online purchases, the Company believes that residential delivery is not their
forte. The Company believes that UPS delivers about 2.4 million packages to
homes each day, while Fedex delivers around 320,000. The Company believes that
startups will eventually need a distribution system to deliver nearly anything
that customers purchase on-line.

A particular trend that the Company feels will further revolutionize the
e-commerce space surrounds strategic alliances between virtual companies and
traditional brick and mortar companies. The Company believes leverage can be
created being both online and off-line. The Company believes that distribution
issue present a problem for many e-commerce companies. And that traditional
companies, with their existing infrastructure, can be invaluable in fulfilling,
packaging and shipping orders. There are also benefits of offering customers
multiple sales and service channels.


                                       7


<PAGE>


The PBC Network is an association formed to create a long overdue and needed
profitable partnership between packaging store owners and carriers, similar in
theory to FTD. The PBC Network provides store owners with a variety of
cost-effective services and products to increase their profitability, while they
still maintain their local identities or franchise loyalties. The PBC Network's
goal it to provide consumers nationwide with a feeling of quality assurance when
they frequent a PBC Network location.

SERVICES OFFERED TO PBC NETWORK MEMBERS & STRATEGIC GOALS

The PBC Network has been formed to create a value-added association among
packaging and shipping centers as well as the actual carriers of freight
worldwide.

In return for a low monthly membership fee, the PBC Network offers a unique
combination of value-added services on the e-commerce horizon.

A list of immediate and future benefits for association members includes:

IMMEDIATE BENEFITS:

E-Commerce representation and a highly structured
plan for these outlets
          Discounts for Web Utilization
          Savings on shipping prices through quantity discounts
          Centralized billing to lower certain costs
          Pre-paid discounts on shipping
          Professional theme coordinated advertising programs
          PBC Network Web Site linking all members with outside customers
          E-mail customer leads Scholarship Programs for members' children
          Packaging education programs
          Organized conventions
          PBC Network health/ dental insurance
          PBC Network shipping insurance
          Computer software/ hardware, Sales and consulting
          Shipping hot line and tracking for customers
          Continual development of new profit centers
          Quality control for member and customer benefits
          Affordable legal representation
          National customer service satisfaction department
          Political lobbying
          Vacation of the month program
          Discounted air cargo/ next day worldwide rates
          Discounted copier and/or fax, postal meter leasing programs
          Discounted long distance rates
          Discounted printing programs
          Discounted van and equipment leasing program
          Prepaid phone card
          Centralized purchasing
          Monthly Newsletter
          Brand recognition of PBC Network Logo
          PBC Network advisory council
          Store (design/modernization) program

                                       9

<PAGE>


This value-added Network is expected to revitalize and re-define the private
postal industry and position itself for additional acquisitions within the
transportation industry that may benefit its members' collective strength.

The Company announced in 1998 that the PBC Network had formed an Advisory
Council. This council consists of PBC members from 7 regions of the United
States. The goal of the Council is to obtain a more specific regional view of
the CMRA industry through the cooperative efforts of the PBC members.

In 1998 the Company announced that the PBC Network had formed a strategic
alliance with Kodak to make available the Kodak Image Magic Picture Maker to the
PBC Network member stores nationwide.

During the year, the PBC Network also announced relationships with other leading
vendors, for use of its members, including the following:

3M - Heat free, non-electric laminating system and various office supplies.
American Airlines Advantages Frequent Flyer Miles
Reslinx Incentive Travel Program
Century Marking/Stamper 2000 - Discounted rates on custom rubber stamps
     for resale.
Discounts on planning and scheduling products available through Wescosa-Florida.
GBC - Discounts on laminating/binding/finishing equipment and supplies.
Keena - Discounts on tape and sealing products.
Kittrich - Discounts on licensed mailing supplies.
MBNA Bank - Co-Marketing/Corporate Credit Card program.
Nova Information Services - Discounts on credit card processing with most
     monthly fees waived.
Paychex - Discounts on payroll services.
Rediform - Discounts on business forms and other office products and services.
Risk Management - Business Insurance Services.
Hertz - Co-Marketing/Car Rental Referral program.
Ti-Mail - Discounts on decorated Tyvek mailing products.
Wescosa-Florida - End-column discounts on office supplies.
X-Stamper - Discounts on stock rubber stamps.


Future PBC Network benefits should include but not be limited to e-commerce,
mail order contract for individual stores, Internet document delivery systems,
national moving preparation program, direct access to packing supplies, audio
visual training, electronic car/truck rental, national television advertising,
auto club, video conferencing, bar-coded luggage national pick-up program,
advertising revenues directly from carriers.


                                       9

<PAGE>


This value-added Network with the goal of revitalizing the private postal
industry and positioning itself for additional acquisitions within the
transportation industry that benefit its members' collective strength.

IMAGES DESIGN AND MARKETING: In 1994, management acquired an advertising agency,
Images Design & Marketing. This agency is the in-house marketing and promotional
department of the Company. Images occupies space in the same building that the
Company leases. By utilizing this arrangement, management expects to achieve
substantial cost savings on its promotional programs and marketing support of
its other subsidiaries. Management expects to reduce the cost of development of
marketing and promotional programs for the Business Centers, thereby
inexpensively maximizing promotion of the Universal Express and the PBC names
and trademarks.

Management expects to reduce advertising expenditures for PBC Network Members
through group buying discounts and eliminating the "agency commissions" paid to
an ad agency by printers and sources of media. Typically, printers of
promotional material and media outlets such as newspapers, magazines and radio
escalate costs more for infrequent users.

UNIQUENET: In 1996, the Company launched its venture called UniqueNet. UniqueNet
is an interactive, specialty gifts Web Site on the Internet's WorldWide Web
(UniqueNet.Com). The Web Site will showcase the Company's line of distinctive
and "trendy" gifts. On-line visitors to the Web Site will be able to view,
select and purchase products through their personal computer using an on-line
order form or regular mail. A retail partner is presently being examined and
auction E-Commerce fulfillment may be originated from this site.

PACKAGING PLUS SERVICES
-----------------------

Packaging Plus Services, Inc. is the corrugated box subsidiary of USXP. A
manufacturing facility is being sought relatively close to the main office. The
Company intends to be a full service corrugated box manufacturer. Additionally,
other equipment has been identified and readied for purchase. The Company
believes that this core business will lend itself to expanding the customer base
and "trim-out" a new and enhanced market. The Company believes that the
additional equipment and marketing effort will enable Packaging Plus Services,
Inc. to become a significant player in the corrugated market.

PBC Network Stores use basic corrugated and because of their non-centralized
purchasing, they are forced to pay above market prices. Through the PBC Network,
the stores will be able to purchase through a centralized purchasing, thus
lowering their costs and making their overall operations more competitive. This
would enable the Member to create a new market for customized boxes the Company
believes will help to expand their customer base and increase their market
share.

                                       10

<PAGE>



RESULTS OF OPERATIONS
---------------------

The three months ended September 30, 1999, as compared to the three months ended
--------------------------------------------------------------------------------
September 30, 1998:
-------------------

                                                    Three Months Ended
                                                    September 30,
                                                    1999                 1998
                                                    -------------------  -------
Revenues
--------
Merchandise and Service Income                        $  102,591      $  138,299
Ticket Sales                                             281,176         497,539
Delivery Services                                        950,677            --
                                                      ----------      ----------
Total Revenues from Current Operations                $1,334,444         635,838
                                                      ----------      ----------

Total - Revenues                                      $1,334,444         635,838

Cost of Goods and Services                            $1,028,256         430,034

Universal Express, Inc. (USXP), is an integrated business service conglomerate.
Its principal subsidiaries and divisions include the Private Postal Network.com
(with two divisions, Postal Business Center Network.com (PBC Network Inc. and
WorldPost Network.com), Manhattan Concierge, Packaging Plus Services, Inc.
(corrugated business), Images Design and Marketing, and UniqueNet.

During the three months ended September 30, 1999, the Company's current business
operations generated revenues of $1,334,444, as compared with operating revenues
of $635,838 for the same three month period in 1998, an increase of 110%.

Merchandise and service income was $102,519 for the September 30, 1999 quarter,
as compared with $138,299 for the 1998 quarter, a decrease of 26%, due to the
discontinuation of the Office Quick business.

Ticket sales for Manhattan Concierge for the 1999 quarter were $281,176, as
compared with $497,539 for the 1998 quarter, a decrease of 43% due to seasonal
factors.

Delivery service revenues for the 1999 quarter of $950,677 arose from the
operations of SkyNet Miami.

Selling, general and administrative expenses were $1,295,957 for the three
months ended September 30, 1999, as compared with $901,953 for the same three
month period in 1998, an increase of 43%


LIQUIDITY AND CAPITAL RESOURCES - FOR THE FIRST QUARTER
-------------------------------------------------------

The net proceeds from new loans and investments in the Company was approximately
$540,000, all of which was used in its operating activities. Common stock in the
amount of approximately $198,150 was issued for services rendered.


                                       11

<PAGE>


Until the PBC Network is fully operational, the Company faces a situation
whereby it needs to raise additional cash in the near future. Management is
continuing efforts to raise cash by arranging lines of credit and obtaining
additional equity. The Company's future business operation will require
additional capital.

Management continues to explore methods to increase working capital through
convertible subordinated debt and additional equity infusions, as well as
possible acquisitions.

THE YEAR 2000
-------------

The Company made an assessment of its Year 2000 readiness in 1999. Based on the
simulations and contacts with hardware and software vendors, the Company
upgraded systems and software in Universal Express, and one of its subsidiaries,
Manhattan Concierge. The approximate cost of the hardware and software upgrades
was $25,000.

The process of upgrading and making all system Year 2000 compliant was
completed. Simulations and testing was also completed and all systems and
hardware are currently Year 2000 compliant.

As of January, 2000 no problems have arisen and all Year 2000 upgrades and
changes were successful.


PART II -- OTHER INFORMATION
----------------------------

Item 1.         LEGAL PROCEEDINGS
                -----------------

The Company is involved in several old lawsuits with vendors and
suppliers. 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.



                                       12
<PAGE>



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
                --------------------------------

                (A) Exhibits
                    --------
                    10.1 NetEx Contract
                    -------------------
                    27.1 Financial Data Schedule
                    ----------------------------
                (B) Reports on Form 8-K: -- NONE



SIGNATURES
----------

Pursuant to the requirements 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: January 6, 2000