FORM 10-QSB

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED:

                  For the Quarterly Period Ended June 26, 2005

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

                          Commission File No. 02-27569

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

                            HEALTH EXPRESS USA, INC.
                            ------------------------
                      (EXACT NAME OF SMALL BUSINESS ISSUER)

                Florida                               65-0847995
                -------                               ----------
      (State or Other Jurisdiction       (I.R.S. Employer Identification Number)
   of Incorporation or Organization)

      1761 West Hillsboro Blvd., Suite 203, Deerfield Beach          33442
      -----------------------------------------------------          -----
             (Address of Principal Executive Offices)              (Zip Code)

          Issuer's telephone number, including area code         (954) 570-5900
                                                                 --------------

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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  |_|

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as to the latest practicable date:

           Class                          Outstanding shares at August 7, 2005
           -----                          ------------------------------------

        Common Stock                                 49,019,983
        ------------                                 ----------


<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

                    HEALTH EXPRESS USA, INC. AND SUBSIDIARIES

ITEM 1.  FINANCIAL STATEMENTS.

                    HEALTH EXPRESS USA, INC. AND SUBSIDIARIES

                         INDEX TO FINANCIALS STATEMENTS
                         ------------------------------

                                    Contents
                                    --------

                                                                         Page(s)
                                                                         -------

Consolidated Balance Sheet as of June 26, 2005 (Unaudited)                    3

Consolidated Statements of Operations as of June 26, 2005 (Unaudited)         4

Consolidated Statements of Cash Flows as of June 26, 2005 (Unaudited)         5

Notes to Consolidated Financial Statements as of June 26, 2005 (Unaudited) 6-12


                                       2
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                  June 26, 2005
                                  -------------
                                   (Unaudited)

                                     ASSETS
                                     ------
<TABLE>
<S>                                                                        <C>
      Current Assets
  Cash                                                                     $     22,351
  Prepaids                                                                        4,992
  Assets of discontinued operations                                                 126
                                                                           ------------
Total Current Assets                                                             27,469
                                                                           ------------

Other Assets
  Debt issue costs                                                                5,000
  Deposits                                                                        4,433
                                                                           ------------
Total Other Assets                                                                9,433
                                                                           ------------

Property and Equipment, net                                                $      2,251
                                                                           ------------

Total Assets                                                               $     39,153
                                                                           ------------

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                    ----------------------------------------

Current Liabilities
  Accounts payable                                                         $     26,211
  Accrued interest payable                                                       73,244
  Accrued interest payable - related party                                       25,627
  Accrued compensation and related taxes - related parties                      199,978
  Notes payable - related party                                                 171,660
  Notes payable, net of debt discount                                           533,333
  Convertible debenture                                                          14,200
  Liabilities of discontinued operations                                        223,906
                                                                           ------------
Total Current Liabilities                                                     1,268,159
                                                                           ------------

Long Term Liabilities
  Convertible debenture                                                          60,000
Total Long Term Liabilities                                                      60,000
                                                                           ------------

Total Liabilities                                                             1,328,159
                                                                           ------------

Commitments and Contingencies (Note 9)

Stockholders' Deficiency
  Preferred stock, $0.01 par value, 10,000,000
             Shares authorized, none issued and outstanding
  Convertible Preferred stock, Series A, $0.01 par value, 100,000 Shares
             authorized, none issued and outstanding
  Common stock, $0.001 par value, 50,000,000 shares authorized
             30,019,983 shares issued and 30,019,983 shares outstanding          30,020
  Common stock issuable (19,000,000 shares)                                      19,000
  Additional paid in capital                                                 10,075,493
  Accumulated deficit                                                       (11,413,519)
                                                                           ------------
Total Stockholders' Deficiency                                               (1,289,006)
                                                                           ------------

Total Liabilities and Stockholders' Deficiency                             $     39,153
                                                                           ============
</TABLE>

      See accompanying notes to unaudited consolidated financial statements


                                       3
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   Three months    Three months     Six months      Six months
                                                  ended June 26,   ended June 27,  ended June 26,  ended June 27,
                                                       2005             2004          2005             2004
<S>                                                <C>             <C>             <C>             <C>
Revenue                                            $         --    $         --    $         --    $         --
                                                   ------------    ------------    ------------    ------------
Operating Expenses
Compensation                                                 --         193,663              --         321,398
Debt issue cost expense                                   5,004          27,005          10,111          37,985
Depreciation                                                244             254             487             459
General and Administrative                               75,389          73,158         141,864         127,797
Total Operating Expenses                                 80,637         294,080         152,462         487,639
                                                   ------------    ------------    ------------    ------------
Loss from Operations                                    (80,637)       (294,080)       (152,462)       (487,639)
                                                   ------------    ------------    ------------    ------------
Other Income (Expense)
Interest income                                              --              18               1              29
Other income                                                 --              --           5,349              --
Interest expense                                        (33,250)        (15,754)        (55,697)        (27,666)
                                                   ------------    ------------    ------------    ------------
Total Other Expense, net                                (33,250)        (15,736)        (50,347)        (27,637)
                                                   ------------    ------------    ------------    ------------

Net Loss from Continuing Operations                $   (113,887)   $   (309,816)   $   (202,809)   $   (515,276)
                                                   ============    ============    ============    ============

Discontinued Operations
  Loss from operations of discontinued component
  (including loss on disposal of $0)                       (127)           (668)           (621)         37,975)
                                                   ------------    ------------    ------------    ------------
Loss on Discontinued Operations                            (127)           (668)           (621)        (37,975)
                                                   ------------    ------------    ------------    ------------

Net Loss                                           $   (114,014)   $   (310,484)   $   (203,430)   $   (553,251)
                                                   ============    ============    ============    ============

Net Loss Per Share - Basic and Diluted

Loss from continuing operations                    $      (0.00)   $      (0.02)   $      (0.01)   $      (0.04)
                                                   ------------    ------------    ------------    ------------
Loss from discontinued operations                                  $      (0.00)                   $      (0.00)

Net Loss Per Share - Basic and Diluted             $      (0.00)   $      (0.02)   $      (0.01)   $      (0.04)
                                                   ============    ============    ============    ============
Weighted average number of shares outstanding
during the period - basic and diluted                36,701,302      14,800,151      33,273,130      13,812,667
                                                   ============    ============    ============    ============
</TABLE>

      See accompanying notes to unaudited consolidated financial statements



                                       4
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows (Unaudited)
                                  June 26, 2005
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                            2005          2004
                                                                          ---------    ---------
<S>                                                                       <C>          <C>
Cash Flows from Operating Activities:
Net loss                                                                  $(203,430)   $(553,251)
Adjustments to reconcile net loss to net cash used in operating
activities:
Amortization of debt issue costs                                             10,111       37,985
Amortization of debt discount costs                                          12,163           --
Depreciation                                                                    487          459
Stock issued for services                                                        --       29,244
Issuance of stock options for services                                           --       53,840

Changes in operating assets and liabilities:
(Increase) decrease in:
  Other receivables                                                           5,239       (1,851)
  Prepaids and other assets                                                  (4,604)       4,184
  Assets of discontinued operations                                           5,309       (7,501)

Increase (decrease) in:
  Accounts payable                                                           12,183      (44,630)
  Accrued liabilities                                                        30,613       41,887
  Liabilities of discontinued operations                                     (9,881)     (32,160)
                                                                          ---------    ---------
Net Cash Used in Operating Activities                                      (141,810)    (471,794)
                                                                          ---------    ---------

Cash Flows from Investing Activities:
  Purchase of equipment                                                          --       (1,439)
                                                                          ---------    ---------
Net Cash Used in Investing Activities                                            --       (1,439)
                                                                          ---------    ---------

Cash Flows from Financing Activities:
  Proceeds from issuance of notes, net of debt discount                     175,000      549,255
  Disbursement for debt issue costs                                          (7,500)          --
  Disbursement to lender for debt discount                                  (17,500)          --
  Repayment of notes payable - related parties                               (8,000)          --
                                                                          ---------    ---------
Net Cash Provided by Financing Activities                                   142,000      549,255
                                                                          ---------    ---------

Net Increase in Cash                                                      $     190    $  76,021
                                                                          ---------    ---------
Cash at Beginning of Period                                                  22,161       52,861
                                                                          ---------    ---------
Cash at End of Period                                                     $  22,351    $ 128,882
                                                                          =========    =========

Supplemental Disclosure of Cash Flow Information:
Cash Paid for:
  Interest                                                                $  11,546    $     306
                                                                          =========    =========
  Taxes                                                                   $      --    $      --

Supplemental Disclosure of Non Cash Investing and Financing Activities:
  Stock issued to settle debenture                                        $  60,800    $
                                                                          =========    =========
  Stock issued under equity line of credit to pay down promissory notes   $  30,000    $      --
                                                                          =========    =========
Debt issue costs from issuance of convertible debenture                   $      --    $  50,746
                                                                          =========    =========
  Stock issued under equity line of credit to pay down convertible
    debenture                                                             $      --    $ 450,000
                                                                          =========    =========
  Stock issued for deferred consulting services                           $      --    $  55,000
                                                                          =========    =========
Issuance of stock options for services                                    $      --    $  53,840
                                                                          =========    =========
</TABLE>

      See accompanying notes to unaudited consolidated financial statements


                                       5
<PAGE>

                    HEALTH EXPRESS USA, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1 Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America and the rules and regulations of the United States Securities and
Exchange Commission for interim consolidated financial information. Accordingly,
they do not include all the information and footnotes necessary for a
comprehensive presentation of consolidated financial position and results of
operations.

It is management's opinion, however, that all material adjustments (consisting
of normal recurring adjustments) have been made which are necessary for a fair
consolidated financial statement presentation. The results for the interim
period are not necessarily indicative of the results to be expected for the
year.

For further information, refer to the audited consolidated financial statements
and footnotes of the Company for the year ending December 26, 2004 included in
the Company's Form 10-KSB.

Note 2 Nature of Operations and Summary of Significant Accounting Policies

(A)  Nature of Operations

Health Express USA, Inc. (the "Company") was incorporated in Florida on July 2,
1998 to develop, construct and operate health and gourmet fast food restaurants.
In June 2004, the Company decided to sell its Boca restaurant operation due to
lack of profitability (see Notes 3 and 4). There is no guarantee that the
Company will be able to sell the restaurant at an acceptable price. The
restaurant was closed in December 2004.

(B)  Revenue Recognition

The Company follows the guidance of the Securities and Exchange Commission's
Staff Accounting Bulletin No. 104 for revenue recognition. The Company records
revenue when persuasive evidence of an arrangement exists, services have been
rendered or product delivery has occurred, the sales price to the customer is
fixed or determinable, and collectibility is reasonably assured.

During the three and six months ended June 26, 2005, the Company did not
recognize any revenues. During the three and six months ended June 27, 2004,
revenues earned by the Company were reflected as a component of discontinued
operations. (See Note 4)

(C) Principles of Consolidation

The consolidated financial statements include the accounts of Health Express
USA, Inc. and its wholly owned subsidiaries (collectively, the "Company"). All
significant intercompany accounts and transactions have been eliminated in
consolidation.

(D)  Net Loss Per Share

SFAS No. 128, "Earnings Per Share," requires companies with complex capital
structures or common stock equivalents to present both basic and diluted
earnings per share ("EPS") on the face of the income statement. Basic EPS is
calculated as the income or loss available to common stockholders divided by the
weighted average number of common shares outstanding during the period. Diluted
EPS is calculated using the "if converted" method for common share equivalents
such as convertible securities and options and warrants. The accompanying basic
and diluted EPS computations are the same as the inclusion of common stock
equivalents in the diluted computation would be anti-dilutive. Common stock
equivalents, if converted, would have increased common shares outstanding at
June 26, 2005 and June 27, 2004 by approximately 5,556,800 and 7,994,666,
respectively.


                                       6
<PAGE>

(E) Stock Based Compensation

The Company follows the fair value method under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," in accounting for stock-based transactions with employees and
non-employees.

In December 2002, SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure," was issued. This pronouncement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," and provides guidance to companies
that wish to voluntarily change to the fair value based method of accounting for
stock-based employee compensation, among other provisions. The Company has
historically accounted for, and will continue to account for, its employee
stock-based compensation under the fair value based method provisions of SFAS
No. 123, and therefore the issuance of SFAS No. 148 did not have any impact on
the Company's consolidated financial position, results of operations or cash
flows.

See Note 7(B).

(F) Reclassifications

Certain amounts in the year 2004 unaudited consolidated financial statements
have been reclassified to conform to the year 2005 unaudited consolidated
presentation.

(G) Quarterly Period-End

The Company's quarterly period ended on the last Sunday of June.

Note 3 Going Concern

As reflected in the accompanying unaudited consolidated financial statements,
the Company has a net loss of $203,430 and net cash used in operations of
$141,810 for the six months ended June 26, 2005, and an accumulated deficit of
$11,413,519 a working capital deficiency of $1,240,690 and a stockholders'
deficiency of $1,289,006 at June 26, 2005.

The Company has incurred cumulative losses since inception, has funded
operations primarily through related-party loans and investor capital, has not
generated sufficient revenues from its operating activities to cover its
expenses and has taken formal action to discontinue its restaurant operations
(See Note 4). The Company is in default on its obligation to repay a $250,000
note payable and a $150,000 note payable (See Note 6(A)).

Management recognizes that the Company must generate additional resources to
enable it to continue operations. Management is planning to obtain additional
capital principally through the sale of its equity securities. The Company has
entered into a share exchange agreement with CSI Business Finance, Inc. ("CSI")
whereby CSI shall become a wholly-owned subsidiary, as more fully described in
Note 10. The realization of assets and satisfaction of liabilities in the normal
course of business is dependent upon the Company obtaining additional equity
capital and ultimately obtaining profitable operations. However, no assurances
can be given that the Company will be successful in these activities. Should any
of these events not occur, the accompanying consolidated financial statements
would be materially affected. The unaudited consolidated financial statements do
not include any adjustments that might be necessary if the Company is unable to
continue as a going concern.

Note 4 Discontinued Operations

In June 2004, the Company decided to sell its Boca Raton restaurant operations.
The Company has determined that the decision to sell this component is due to
lack of profitability. There is no guarantee that the Company will be able to
locate a buyer willing to pay an acceptable price for the restaurant operations.
The restaurant was closed in December 2004. Pursuant to the provisions of SFAS
No. 144, the long-lived assets relating to the Company's restaurant operations
classified as held for sale and will be reported as discontinued operations.

All assets and liabilities identified as part of the disposal group have been
classified as current since the related benefits and obligations for these items
are expected to be realized and settled within one year. The disposal group
includes components from both the Boca Raton store and the Ft. Lauderdale store.


                                       7
<PAGE>

The following is a summary of the assets and liabilities of the disposal group
at June 26, 2005:

                    Assets to be disposed of:
           --------------------------------------------
           Cash - Boca store                                       $    126
                                                                   --------
           Total Assets to be disposed of                          $    126
                                                                   ========

                    Liabilities to be disposed of:
           --------------------------------------------
           Accounts Payable - Boca store                           $      0
           Accrued Liabilities - Ft. Lauderdale store                 3,413
           Accrued Liabilities - Boca store                         220,493
                                                                   --------
           Total Liabilities to be disposed of                     $223,906
                                                                   ========

            Included as a component of the above accrued liabilities, there
            exists current litigation relating to the failure of payment of the
            monthly base rent due on the Boca Raton restaurant lease. The total
            amount due under the terms of the lease agreement has been
            accelerated by the landlord for a total of $220,493. The civil
            action was filed on December 8, 2004. At June 26, 2005, there has
            been no resolution to this matter. (See Note 9)

            The following represents a condensed unaudited statement of
            operations for the disposal group:

<TABLE>
<CAPTION>
                                             For the Six Months   For the Six Months
                                             Ended June 26, 2005  Ended June 27, 2004
                                                   ------------    ----------
<S>                                                <C>             <C>
      Revenues                                     $      --       $ 359,314
      Cost of Sales and Controllable Expenses      $      --       $ 247,659
                                                   ---------       ---------
      Gross Profit (Loss)                          $      --       $ 111,655
      Operating Expenses                           $    (621)      $ 149,490
      Other expense, net                           $      --       $    (140)
                                                   ---------       ---------
      Loss on Discontinued Operations              $    (621)      $ (37,975)
</TABLE>

            In 2002, the Company had discontinued its operations relating to its
            Ft. Lauderdale restaurant. As a result, liabilities related to these
            discontinued operations totaled $3,413 and are included in the total
            liabilities of discontinued operations balance of $223,906 at June
            26, 2005.

Note 5 Convertible Debenture

On January 17, 2003, the Company sold $250,000 of convertible debentures to
Cornell Capital Partners, L.P. ("Cornell"). These debentures accrue interest at
a rate of 5% per year and mature three years from the issuance date on January
17, 2006. The debentures are convertible into the Company's common stock at the
holders' option any time up to maturity at a conversion price equal to the lower
of (i) 120% of the closing bid price of the common stock as of the closing date
or (ii) 80% of the average closing bid price of the common stock for the three
lowest trading days of the five trading days immediately preceding the
conversion date. At maturity, the Company has the option to either pay the
holder the outstanding principal balance and accrued interest or to convert the
debentures into shares of common stock at a conversion price similar to the
terms described above. The Company has the right to redeem the debentures upon
thirty days notice for 120% of the amount redeemed. Upon such redemption, the
holder shall receive warrants equal to 10,000 shares of common stock for each
$100,000 redeemed with an exercise price equal to 120% of the closing bid price
of the common stock on the closing date.

Since the issuance of the debenture in 2003, Cornell had converted $175,000. At
December 26, 2004, $75,000 remained on this convertible debenture.

On May 25, 2005, Cornell converted $60,800 of principal pursuant to the
debenture. Pursuant to the terms of conversion, Cornell was entitled to receive
19,000,000 shares of the Company's common stock. As a result of the share
issuance occurring on July 18, 2005, the Company recorded common stock issuable
for the 19,000,000 shares at $19,000 and additional paid in capital of $41,800.
No gain or loss was recognized on this transaction. At June 26, 2005, the
Company reflects a short-term liability of $14,200 for the remaining portion of
the unconverted principal. Related accrued interest was of $21,524. (See Notes
6(A) and 7(A))


                                       8
<PAGE>

At June 26, 2005, the Company reflects a long-term liability for a separate
convertible debenture of $60,000.

Note 6 Notes Payable and Loans Payable

(A)   Notes Payable

On August 18, 2004, the Company executed a promissory note with Cornell in the
face amount of $250,000. The note reflected an interest rate of 12%. There were
debt issue costs related to this promissory note of $29,875, which were
capitalized as a debt issue cost asset on the balance sheet. The debt issue cost
is being amortized over the life of the debt, which has a 140-day term. At June
26, 2005, the remaining portion of the capitalized debt issue cost asset was $0.
The outstanding related accrued interest at June 26, 2005 on this note was
$26,116. (See summary below).

Upon the issuance of the $250,000 promissory note, $12,500 was recorded as a
debt discount contra liability. The debt discount represents an amount paid to
the lender to acquire the debt financing and is amortized to interest expense
over the life of the debt. The debt discount is netted against the face value of
the debt to determine the total outstanding liability. At June 26, 2005, the
outstanding balance net of a debt discount totaling $0 was $220,000. The Company
is in default on its obligation to repay this $250,000 note payable. As of
January 3, 2005, the default rate of interest is 14%. (See Note 3)

On December 27, 2004, the Company drew $15,000 under the Equity Line of Credit
and issued 1,973,684 shares of common stock. The proceeds were used to pay down
the $250,000 promissory note. The outstanding balance of the promissory note
after this payment is $235,000. (See Note 7(A))

On January 3, 2005, the Company drew $15,000 under the Equity Line of Credit and
issued 1,744,186 shares of common stock. The proceeds were used to pay down the
$250,000 promissory note. The outstanding balance of the promissory note after
this payment is $220,000. (See Note 7(A))

On November 3, 2004, the Company executed a promissory note with Cornell in the
face amount of $150,000. The note reflected an interest rate of 12%. There were
debt issue costs related to this promissory note of $7,883 which were
capitalized as a debt issue cost asset on the balance sheet. The debt issue cost
is being amortized over the life of the debt, which has a 211-day term. At June
26, 2005, the remaining portion of the capitalized debt issue cost asset was $0.

Upon the issuance of the $150,000 promissory note, $7,500 was recorded as a debt
discount contra liability. The debt discount represents an amount paid to the
lender to acquire the debt financing and is amortized to interest expense over
the life of the debt. The debt discount is netted against the face value of the
debt to determine the total outstanding liability. As of June 26, 2005, the
outstanding balance net of a debt discount totaling $0 was $150,000. The Company
is in default on its obligation to repay this $150,000 note payable. As of June
2, 2005, the default rate of interest is 24%. (See Note 3) The outstanding
related accrued interest at June 26, 2005 on this note was $22,094. (See summary
below).

On April 26, 2005, the Company executed a promissory note with Cornell in the
face amount of $175,000. The note had a term of six months and matures on
October 25, 2005. The note reflected an interest rate of 12%. In the event of
default, default rate of interest is 18%. There were debt issue costs related to
this promissory note of $7,500 that were capitalized as a debt issue cost asset
on the balance sheet. The debt issue cost is being amortized over the life of
the debt, which has a 182-day term. At June 26, 2005, the remaining portion of
the capitalized debt issue cost asset was $5,000 Debt issue cost expense for the
three and six months ended June 26, 2005 were $2,500 and $2,500, respectively.
There was no such expense for this note in 2004. The outstanding related accrued
interest at June 26, 2005 was $3,510. (See summary below)

Upon the issuance of the $175,000 promissory note, $17,500 was recorded as a
debt discount contra liability. The debt discount represents an amount paid to
the lender to acquire the debt financing and is amortized to interest expense
over the life of the debt. The debt discount is netted against the face value of
the debt to determine the total outstanding liability. At June 26, 2005, the
outstanding balance net of a debt discount totaling $11,667 was $163,333.

The following is a summary of outstanding Notes Payable, net of debt discount at
June 26, 2005:


                                       9
<PAGE>

           Note Payable - August 18, 2004
            (In default)                                          $220,000
           Note payable - November 3, 2004
            (In default)                                           150,000
           Notes Payable-April 26, 2005                            163,333
                                                                  --------
           Total Notes Payable                                    $533,333
                                                                  ========

The following is a summary of Debt Discount at June 26, 2005 on current
outstanding promissory notes; these amounts are netted against the face value of
the promissory notes:

      Note Payable - August 18, 2004
        (In default)                                               $    --
      Note payable - November 3, 2004
        (In default)                                                    --
      Notes Payable-April 26, 2005                                  11,667
                                                                   -------
      Total Debt Issue Costs                                       $11,667
                                                                   =======

The following is a summary of total Accrued Interest Payable at June 26, 2005:

      Note Payable - August 18, 2004                               $26,116
      Note payable - November 3, 2004                               22,094
      Notes Payable-April 26, 2005                                   3,510
      Convertible debentures                                        21,524
                                                                   -------
      Total Accrued Interest Payable                               $73,244
                                                                   =======

The following is a summary of capitalized Debt Issue Costs at June 26, 2005:

      Note Payable - August 18, 2004                                $   --
      Note payable - November 3, 2004                                   --
      Notes Payable-April 26, 2005                                   5,000
                                                                    ------
      Total Debt Issue Costs                                        $5,000

(B)   Loan Payable

On March 9, 2005, the Company received $30,000 in working capital funds from an
unrelated third party. The loan was non-interest bearing and due on demand. The
loan was secured by 12,224,446 shares of common stock. These collateral shares
were to be held in escrow until such time the loan was repaid. The shares were
not considered outstanding for purposes of computing earnings per share. On June
9, 2005, the loan was repaid in full and the shares were released from escrow.

Note 7 Stockholders' Deficiency

(A)   Equity Line Of Credit


On March 13, 2003, the Company entered into an Equity Line of Credit Agreement
("Agreement") with Cornell which expired on July 24, 2005. Under this agreement,
the Company was entitled to issue and sell to Cornell common stock for a total
purchase price of up to $5,000,000. The purchase price for the shares was equal
to 95% of the market price, which was defined as the lowest closing bid price of
the common stock during the five trading days following the notice date. Cornell
was entitled to retain a fee of 5% of each advance.

The following is a summary of stock issuances during the six months ended June
26, 2005:


                                       10
<PAGE>

<TABLE>
<CAPTION>
Draw down on equity line and conversion
of outstanding debentures                    Quantity of Shares Issued         Amount
---------------------------------------- -------------------------------- ------------
<S>                                                     <C>                   <C>
December 27, 2004 (See Note 6(A))                       1,973,684             $ 15,000
January 3, 2005 (See Note 6(A))                         1,744,186               15,000
May 25, 2005 (See Note 5)                              19,000,000               60,800
                                                       ----------             --------
                                                       22,717,870             $ 90,800
                                                       ==========             ========
</TABLE>

(B)   Common Stock Options and Warrants

There were no options or warrants granted, exercised, terminated or cancelled
during the three and six months ended June 26, 2005, respectively. There are
3,556,800 options currently outstanding and exercisable being held by the
Company's CEO and CFO, collectively. An additional 2,000,000 warrants are
currently outstanding and exercisable and being held by an unrelated third
party. The aggregate 5,556,800 common stock equivalents are not included in
diluted earnings per share since the Company reports a net loss and the effect
of these common stock equivalents is anti-dilutive.

(C)   Convertible Preferred Stock Series A

On June 17, 2005, the Company took the following corporate actions regarding the
creation and designation of Convertible Preferred Stock Series A:

      i.    100,000 shares authorized, none issued and outstanding.

      ii.   Par value is $0.01 per share.

      iii.  Rank is equal to common stock and junior to all other series of
            preferred stock.

      iv.   Entitled to dividends when declared on common stock on a pro rata
            basis on an as converted basis.

      v.    Liquidation rights/preferences - none.

      vi.   Convertible immediately at option of holder into 19,500 shares of
            common stock for each share of Convertible Preferred Stock, Series A
            held.

      vii.  Voting rights are on an as converted basis.

See Note 10 regarding subsequent event transactions.

Note 8 Related Party Transactions

On December 28, 2004, two separate officers were repaid an aggregate $8,000 for
previously advanced funds. The repayments were for principal only. At June 26,
2005, the balance due was $171,660. Related accrued interest to all related
parties totaled $25,627.

Note 9 Commitments and Contingencies

From time to time, the Company may become subject to proceedings, lawsuits and
other claims in the ordinary course of business including proceedings related to
services provided and other matters. Such matters are subject to many
uncertainties, and outcomes are not predictable with assurance.

The Company is subject to various lawsuits and unasserted claims from service
providers. Amounts due to vendors and other unrelated third parties have been
accrued as of June 26, 2005.

Currently, the Company is involved with litigation relating to the failure of
payment of the monthly base rent due on the Boca restaurant lease. The total
amount due under the terms of the lease agreement has been accelerated by the
landlord for a total of $220,493. The civil action was filed on December 8,
2004. At June 26, 2005, there has been no resolution to this matter.


                                       11
<PAGE>

On April 18, 2005, the Company settled an employee claim regarding unpaid wages.
An amount of $2,856 was paid to the former employee and all matters surrounding
this claim have been settled.

Note 10 Subsequent Events

On June 17, 2005, the Company entered into a Share Exchange Agreement ("Share
Exchange Agreement") with CSI Business Finance, Inc., a Texas corporation.
Pursuant to the agreement, no share exchange could occur until the Company's
shareholders voted on the transaction. On August 5, 2005 the Company filed a
Definitive Information Statement with the SEC stating that the required number
of shareholders had approved the transaction. The Definitive Information
Statement was sent to the Company's shareholders on or about August 8, 2005. The
transaction is expected to close prior to September 15, 2005. As of June 26,
2005, no exchange has occurred. The following are the terms of the agreement:

      a.    The Company will exchange 100,000 shares of Convertible Preferred
            Stock, Series A for all issued and outstanding common stock of CSI
            Business Finance, Inc. The transaction will be treated as a reverse
            merger and recapitalization of CSI Business Finance, Inc. CSI
            Business Finance, Inc. will be considered the accounting acquirer
            and the Company will be treated as the legal acquirer. As a result
            of the exchange, the shareholders of CSI Business Finance, Inc. will
            convert their Convertible Preferred Stock, Series A for
            1,950,000,000 shares of the Company's common stock effectively
            transferring control and a 97.5% ownership interest. The remaining
            2.5% of the shares held by the Company will treated as a deemed
            issuance to minority shareholders.

      b.    The Company will increase authorized shares of common stock from
            50,000,000 to 5,000,000,000 in connection with the expected
            conversion discussed above in Note 10(a). The par value will remain
            at $0.001 per share.

      c.    The Company will change its name to CSI Business Finance, Inc.

On June 15, 2005, the Company entered into a Settlement Agreement with Mutual
Releases with several parties, whereby the Company will settle all outstanding
liabilities with its sole franchisee. Currently, this individual is owed
$171,660 on a note payable, along with $25,627 of related accrued interest. The
principal and related accrued interest will be converted into the Company's
common stock (par value $0.001) by dividing the aggregate liability due by 80%
of the average closing bid price of the Company's common stock for the three
lowest trading days of the five trading days immediately preceding the closing
date. The anticipated average closing price as defined above is expected to
approximate $0.001. Upon the effectiveness of the Definitive Information
Statement, whereby the Company's authorized stock shall be increased to
5,000,000,000, the Company will issue approximately 246,533,750 shares of common
stock to settle the liability. In addition, the Company will transfer its 100%
ownership in Health Express Franchise Company. The Company will record a gain or
loss on debt settlement once the closing has occurred.

On June 15, 2005, the Company entered into a Settlement Agreement with Mutual
Releases with several parties, whereby the Company will settle all outstanding
liabilities with an individual debt holder. Currently, this individual is owed
$60,000 on a convertible debenture payable, along with $5,400 of related accrued
interest. The principal and related accrued interest will be converted into the
Company's common stock (par value $0.001) by dividing the aggregate liability
due by 80% of the average closing bid price of the Company's common stock for
the three lowest trading days of the five trading days immediately preceding the
closing date. The anticipated average closing price as defined above is expected
to approximate $0.001. Upon the effectiveness of the Definitive Information
Statement, whereby the Company's authorized stock shall be increased to
5,000,000,000, the Company will issue approximately 81,750,000 shares of common
stock to settle the liability. The Company will record a gain or loss on debt
settlement once the closing has occurred.

On July 18, 2005, the Company issued 19,000,000 shares of stock previously
classified as issuable. (See Note 5)


                                       12
<PAGE>

Item 2. Management's Discussion And Analysis Of Financial Condition And Results
Of Operations

Introduction - Forward Looking Statements

      In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), Health Express USA, Inc. and
its subsidiaries, (collectively, the "Company") is hereby providing cautionary
statements identifying important factors that could cause the Company's actual
results to differ materially from those projected in forward-looking statements
made herein. Any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions of future events or
performance are not statements of historical facts and may be forward-looking.
These forward-looking statements are based largely on the Company's expectations
and are subject to a number of risks and uncertainties, including but not
limited to, economic, competitive, regulatory, growth strategies, available
financing and other factors discussed elsewhere in this report and in documents
filed by the Company with the U.S. Securities and Exchange Commission ("SEC").
Many of these factors are beyond the Company's control. Actual results could
differ materially from the forward-looking statements made. In light of these
risks and uncertainties, there can be no assurance that the results anticipated
in the forward-looking information contained in this report will, in fact,
occur.

      Any forward-looking statement speaks only as of the date on which such
statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time and it is not
possible for management to predict all of such factors, nor can it assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

Closing Of Our Operations

      During the six months ended June 26, 2005, the Company did not recognize
any revenues. During the six months ended June 26, 2004, revenues earned by the
Company were reflected as a component of discontinued operations. The Company's
only existing restaurant, Healthy Bites Grill was closed November 2004. Upon
closing Healthy Bites Grill restaurant, the Company's only operations were
related to its franchise business. Since November 30, 2004 Health Express has
had limited operations no longer operates in the restaurant business.

Going Concern

      As reflected in the accompanying unaudited consolidated financial
statements, the Company has a net loss of $203,430 and net cash used in
operations of $141,810 for the six months ended June 26, 2005, and an
accumulated deficit of $11,413,519 a working capital deficiency of $1,240,690
and a stockholders' deficiency of $1,289,006 at June 26, 2005.

      The Company has incurred cumulative losses since inception, has funded
operations primarily through related-party loans and investor capital, has not
generated sufficient revenues from its operating activities to cover its
expenses and has discontinued its restaurant operations. The Company is in
default on its obligation to repay a $250,000 note payable and a $150,000 note
payable.

      Management recognizes that the Company must generate additional resources
to enable it to continue operations. Management is planning to obtain additional
capital principally through the sale of its equity securities. The realization
of assets and satisfaction of liabilities in the normal course of business is
dependent upon the Company obtaining additional equity capital and ultimately
obtaining profitable operations. However, no assurances can be given that the
Company will be successful in these activities. Should any of these events not
occur, the accompanying consolidated financial statements would be materially
affected. The unaudited consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.

      On June 17, 2005, the Company entered into a Share Exchange Agreement, by
and among the Company, CSI Business Finance, Inc. a Texas corporation ("CSI")
and the shareholders of CSI (the "CSI Shareholders"). Pursuant to the Share
Exchange Agreement, the CSI Shareholders exchanged with, and delivered to, the
Company the issued and outstanding common stock of CSI in exchange for 100,000
shares of Series A Convertible Preferred Stock, par value $0.01 per share, of
the Company. Each share of the Health Express Series A Preferred Stock is
convertible into 19,500 shares of common stock of the Company. The Shareholders
transferred and exchanged the CSI Common Stock for the Health Express Series A
Preferred Stock so that effectively after the conversion of the preferred stock,
shares of common stock issued upon conversion of the preferred stock shall equal
Ninety-Seven and One Half percent (97.5%) of the issued and outstanding shares
of common stock of Health Express. In connection with the Share Exchange
Agreement, the Company filed on August 5, 2005 a Definitive Information
Statement on Schedule 14C with the SEC. Upon the effectiveness of the Definitive
Information Statement, CSI will become a wholly-owned subsidiary of the Company.


                                       13
<PAGE>

Default On Obligations

      On August 18, 2004, the Company executed a promissory note with Cornell in
the face amount of $250,000. The note reflected an interest rate of 12%. There
were debt issue costs related to this promissory note of $29,875, which were
capitalized as a debt issue cost asset on the balance sheet. The debt issue cost
is being amortized over the life of the debt, which has a 140-day term. At June
26, 2005, the remaining portion of the capitalized debt issue cost asset was $0.
The outstanding related accrued interest at June 26, 2005 on this note was
$26,116.

      Upon the issuance of the $250,000 promissory note, $12,500 was recorded as
a debt discount contra liability. The debt discount represents an amount paid to
the lender to acquire the debt financing and is amortized to interest expense
over the life of the debt. The debt discount is netted against the face value of
the debt to determine the total outstanding liability. At June 26, 2005, the
outstanding balance net of a debt discount totaling $0 was $220,000. The Company
is in default on its obligation to repay this $250,000 note payable. As of
January 3, 2005, the default rate of interest is 14%.

      On November 3, 2004, the Company executed a promissory note with Cornell
in the face amount of $150,000. The note reflected an interest rate of 12%.
There were debt issue costs related to this promissory note of $7,883. which
were capitalized as a debt issue cost asset on the balance sheet. The debt issue
cost is being amortized over the life of the debt, which has a 211-day term. At
June 26, 2005, the remaining portion of the capitalized debt issue cost asset
was $0.

      Upon the issuance of the $150,000 promissory note, $7,500 was recorded as
a debt discount contra liability. The debt discount represents an amount paid to
the lender to acquire the debt financing and is amortized to interest expense
over the life of the debt. The debt discount is netted against the face value of
the debt to determine the total outstanding liability. As of June 26, 2005, the
outstanding balance net of a debt discount totaling $0 was $150,000. The Company
is in default on its obligation to repay this $150,000 note payable. As of June
2, 2005, the default rate of interest is 24%. The outstanding related accrued
interest at June 26, 2005 on this note was $22,094.

Critical Accounting Policies And Estimates

      Management's discussion and analysis of our financial condition and
results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial
statements requires that we make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. At each balance sheet date,
management evaluates its estimates, including but not limited to, those related
to inventories, accrued liabilities, valuation of stock based compensation, and
the valuation allowance offsetting deferred income taxes. The Company also
reviews its property for possible impairment whenever events indicate that its
carrying value may not be recoverable; such an impairment was determined to
exist in December 2003, and certain fixed assets were written down to their
estimated fair value. There was also an impairment in 2004, and like 2003, these
impairments are included as a component of discontinued operations since the
Company no longer operates a restaurant business. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions. The estimates and critical
accounting policies that are most important in fully understanding and
evaluating our financial condition and results of operations include those
listed above, as well as our valuation of equity securities used in transactions
and for compensation, and our revenue recognition methods for restaurant
operations and franchising.

Revenue Recognition

      The Company follows the guidance of the Securities and Exchange
Commission's Staff Accounting Bulletin No. 104 for revenue recognition. The
Company records revenue when persuasive evidence of an arrangement exists,
services have been rendered or product delivery has occurred, the sales price to
the customer is fixed or determinable, and collectibility is reasonably assured.

      During the three and six months ended June 26, 2005, the Company did not
recognize any revenues. During the three and six months ended June 27, 2004,
revenues earned by the Company were reflected as a component of discontinued
operations.


                                       14
<PAGE>

Stock Based Compensation

      The Company follows the fair value method under the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation," in accounting for stock-based transactions with
employees and non-employees.

      In December 2002, SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure," was issued. This pronouncement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," and provides guidance to companies
that wish to voluntarily change to the fair value based method of accounting for
stock-based employee compensation, among other provisions. The Company has
historically accounted for, and will continue to account for, its employee
stock-based compensation under the fair value based method provisions of SFAS
No. 123, and therefore the issuance of SFAS No. 148 did not have any impact on
the Company's consolidated financial position, results of operations or cash
flows.

For The Six Months Ended June 26, 2005, Compared To The Six Months Ended June
27, 2004

      Revenues And Cost Of Company Restaurant Sales

      As a result of classifying the restaurant operations as a component of
discontinued operations, the Company reported no restaurant revenue or
restaurant cost of sales for the six months ended June 26, 2005 and June 27,
2004. There was no revenue recognized during these six month periods due to the
closing of the Company's restaurant and franchise operations.

      Operating Expenses

      Health Express had operating expenses, which included depreciation,
amortization of debt issue costs and general and administrative expenses,
totaling $152,462 for six months ended June 26, 2005. These expenses consisted
mainly of $141,864 in general and administrative expenses, and $10,111 of debt
issue costs. The operating expenses for the six month period ended June 26, 2005
decreased by $335,177 compared to $487,639 for the six months ended June 27,
2004. The decrease in 2005 was primarily due to a decrease in compensation as a
result of closing our operations as well as no stock based compensation during
the six months ended June 26, 2005.

      Net Loss

      Health Express had a net loss for the six months ended June 26, 2005 of
$203,430, compared to a net loss of $553,351 in the same period for 2004. The
decrease in net loss of $349,821 for the six month comparable periods was
attributable mainly to decreases in compensation and the results due to a loss
from operations of a discontinued component.

For The Three Months Ended June 26, 2005, Compared To The Three Months Ended
June 27, 2004

      Revenues And Cost Of Company Restaurant Sales

      As a result of classifying the restaurant operations as a component of
discontinued operations, the Company reported no restaurant revenue or
restaurant cost of sales for the three months ended June 26, 2005 and June 27,
2004. There was no revenue recognized during these six month periods due to the
closing of the Company's restaurant and franchise operations.

      Operating Expenses

      Health Express had operating expenses, which included depreciation,
amortization of debt issue costs and general and administrative expenses,
totaling $80,637 for three months ended June 26, 2005. The operating expenses
for the three month period ended June 26, 2005 were $80,637, a decrease of
$213,443 compared to $294,080 for the three months ended June 27, 2004. The
decrease in 2005 was primarily due to a decrease in compensation as a result of
closing our operations as well as no stock based compensation during the three
months ended June 26, 2005.

      Net Loss

      Health Express had a net loss for the three months period ended June 26,
of $114,014, compared to $310,484, in the same period for 2004. The decrease in
net loss of $196,470 for the three month comparable periods was attributable
mainly to decreases in compensation and loss discontinued operations expense,
which were due to a loss from operations of a discontinued component.


                                       15
<PAGE>

Share Exchange Agreement

      On June 17, 2005, the Company entered into a Share Exchange Agreement, by
and among the Company, CSI Business Finance, Inc. a Texas corporation ("CSI")
and the shareholders of CSI (the "CSI Shareholders"). Pursuant to the Share
Exchange Agreement, the CSI Shareholders exchanged with, and delivered to, the
Company the issued and outstanding common stock of CSI in exchange for 100,000
shares of Series A Convertible Preferred Stock, par value $0.01 per share, of
the Company. Each share of the Health Express Series A Preferred Stock is
convertible into 19,500 shares of common stock of the Company. The Shareholders
transferred and exchanged the CSI Common Stock for the Health Express Series A
Preferred Stock so that effectively after the conversion of the preferred stock,
shares of common stock issued upon conversion of the preferred stock shall equal
Ninety-Seven and One Half percent (97.5%) of the issued and outstanding shares
of common stock of Health Express. In connection with the Share Exchange
Agreement, the Company filed on August 5, 2005 a Definitive Information
Statement on Schedule 14C with the SEC. Upon the effectiveness of the Definitive
Information Statement, CSI will become a wholly-owned subsidiary of the Company.

Liquidity And Capital Resources

      As of June 26, 2005 the Company has approximately $22,351 in cash. This
amount of available cash is not sufficient to satisfy the Company's need for
working capital for the short term.

      Cash used in operating activities during the six months ended June 26,
2005 was $141,810, compared to $471,794 for the same period a year earlier. The
cash used in operating activities was mainly a result of the Company's net loss.

      Cash used in investing activities was $0 for the six months ended June 26,
2005, compared to $1,439 in for the same period in 2004. The decrease in cash
used in investing activities was attributable to the fact that the Company had
discontinued its operations.

      Cash provided by financing activities was $142,000 for the six months
ended June 26, 2005, compared to $549,255 in the same period for 2004. The cash
provided in the 2005 and 2004 periods was from the proceeds of notes and the
issuance of common stock.

      On April 26, 2005, the Company executed a promissory note with Cornell in
the face amount of $175,000. The note had a term of six months and matures on
October 25, 2005. The note reflected an interest rate of 12%. In the event of
default, default rate of interest is 18%. There were debt issue costs related to
this promissory note of $7,500 that were capitalized as a debt issue cost asset
on the balance sheet. The debt issue cost is being amortized over the life of
the debt, which has a 182-day term. At June 26, 2005, the remaining portion of
the capitalized debt issue cost asset was $5,000 Debt issue cost expense for the
three and six months ended June 26, 2005 were $2,500 and $2,500, respectively.
There was no such expense for this note in 2004. The outstanding related accrued
interest at June 26, 2005 was $3,510.

      On January 12, 2004, the Company executed a promissory note with Cornell
Capital Partners in the face amount of $100,000. During the year ended December
26, 2004, the promissory note was repaid in full.

      On February 20, 2004, the Company executed a promissory note with Cornell
Capital Partners in the face amount of $500,000. There were debt issue costs
related to this promissory note of $50,746, which were classified as a debt
issue cost asset on the balance sheet. The debt issue costs is being amortized
over the life of the debt which had a 171-day term. The debt issue costs were
fully amortized at December 26, 2004. The default rate of interest is 24%,
however, Cornell Capital Partners has waived this provision and retained an
interest rate of 12% on the outstanding principal balance. Debt issue cost
expense for the years ended December 26, 2004 and December 28, 2003 were $50,746
and $0 respectively. The promissory note was repaid in full.

      On August 18, 2004, the Company executed a promissory note with Cornell
Capital Partners in the face amount of $250,000. The note reflected an interest
rate of 12%. There were debt issue costs related to this promissory note of
$29,875, which were capitalized as a debt issue cost asset on the balance sheet.
The debt issue cost is being amortized over the life of the debt which has a 140
day term. At December 26, 2004, the remaining portion of the capitalized debt
issue cost asset was $1,707. Debt issue cost expense for the year ended December
26, 2004 and December 28, 2003 were $28,169 and $0 respectively. The outstanding
related accrued interest at December 26, 2004 was $10,849. Upon the issuance of
this $250,000 promissory note, $12,500 was recorded as a debt discount contra
liability. The debt discount represents an amount paid to the lender to acquire
the debt financing and is amortized to interest expense over the life of the
debt. The debt discount is netted against the face value of the debt to
determine the total outstanding liability. As of December 26, 2004, the
outstanding balance net of a debt discount totaling $714 was $249,286. The
Company is in default on its obligation to repay this $250,000 note payable.


                                       16
<PAGE>

      On November 3, 2004, the Company executed a promissory note with Cornell
Capital Partners in the face amount of $150,000. The note reflected an interest
rate of 12%. There were debt issue costs related to this promissory note of
$7,883 which were capitalized as a debt issue cost asset on the balance sheet.
The debt issue cost is being amortized over the life of the debt, which has a
211-day term. At December 26, 2004, the remaining portion of the capitalized
debt issue cost asset was $5,903. Debt issue cost expense for the year ended
December 26, 2004 and December 28, 2003 were $1,980 and $0, respectively. The
outstanding related accrued interest at June 26, 2005 was $22,095. Upon the
issuance of this $150,000 promissory note, $7,500 was recorded as a debt
discount contra liability. The debt discount represents an amount paid to the
lender to acquire the debt financing and is amortized to interest expense over
the life of the debt. The debt discount is netted against the face value of the
debt to determine the total outstanding liability. As of June 26, 2005, the
outstanding balance net of a debt discount totaling $0 was $150,000. The Company
is in default on its obligation to repay this $150,000 note payable.

      On January 17, 2003, the Company sold $250,000 of convertible debentures
to Cornell Capital Partners, L.P ("Cornell"). These debentures accrue interest
at a rate of 5% per year and mature three years from the issuance date. The
debentures are convertible into the Company's common stock at the holders'
option any time up to maturity at a conversion price equal to the lower of (i)
120% of the closing bid price of the common stock as of the closing date or (ii)
80% of the average closing bid price of the common stock for the three lowest
trading days of the five trading days immediately preceding the conversion date.
At maturity, the Company has the option to either pay the holder the outstanding
principal balance and accrued interest or to convert the debentures into shares
of common stock at a conversion price similar to the terms described above. In
accordance with applicable accounting standards for such issuances, the Company
recorded an interest charge of $62,500 at issuance to account for the imbedded
beneficial conversion feature. In addition, the Company recorded these other
charges at issuance: $37,500 in professional fees, $20,000 in commissions, and,
(as described below), $75,000 for the Equity Line of Credit commitment fee
(recorded as interest expense). These amounts were withheld from the proceeds of
the debenture at closing. The Company has the right to redeem the debentures
upon thirty days notice for 120% of the amount redeemed. Upon such redemption,
the holder shall receive warrants equal to 10,000 shares of common stock for
each $100,000 redeemed with an exercise price equal to 120% of the closing bid
price of the common stock on the closing date. $50,000 of the debenture was
acquired and effectively redeemed by Charles D. Blewise for $60,000 on behalf of
the Company, and $100,000 of the debenture was converted into 283,804 shares of
the Company's common stock in fiscal year 2003. As of June 26, 2005, $74,200 in
convertible debentures remains outstanding, of which $14,200 is held by Cornell
Capital Partners and $60,000 are held by Mr. Blewise. The outstanding related
accrued interest at June 26, 2005 was $21,524.

      On March 13, 2003, the Company entered into an Equity Line of Credit
Agreement with Cornell Capital Partners which expired on July 24, 2005. Under
this agreement, the Company was entitled to issue and sell to Cornell common
stock for a total purchase price of up to $5,000,000. The purchase price for the
shares was equal to 95% of the market price, which was defined as the lowest
closing bid price of the common stock during the five trading days following the
notice date. Cornell was entitled to retain a fee of 5% of each advance.

ITEM 3.  CONTROLS AND PROCEDURES

(A)   Evaluation Of Disclosure Controls And Procedures

      As of the end of the period covered by this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's Principal Executive Officer and Principal Financial Officer of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. The Company's disclosure controls and procedures are designed to
provide a reasonable level of assurance of achieving the Company's disclosure
control objectives. The Company's Principal Executive Officer and Principal
Accounting Officer have concluded that the Company's disclosure controls and
procedures are, in fact, effective at this reasonable assurance level as of the
period covered. The Company's prior auditors advised the Company that, in the
auditor's view, the Company's controls over (1) non-accounting documents to the
extent this information is communicated to the Chief Financial Officer, and (2)
the internal accounting controls regarding segregation of duties, each have
material weakness. The former accountants for Health Express do not believe that
these items constitute reportable events as described in Item 304(a) of
Regulation S-K. The Company believes that its overall internal controls are, in
fact, effective, and the Company strives to continue to make improvements in its
internal controls.


                                       17
<PAGE>

(B)   Changes In Internal Controls Over Financial Reporting

      In connection with the evaluation of the Company's internal controls
during the Company's six months ended June 26, 2005, the Company's Principal
Executive Officer and Principal Financial Officer have determined that there are
no changes to the Company's internal controls over financial reporting that has
materially affected, or is reasonably likely to materially effect, the Company's
internal controls over financial reporting.


                                       18
<PAGE>

                                     PART II
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

      On December 8, 2004 a lawsuit was filed against the Company in the Circuit
Court of the 15th Judicial Court of Palm Beach County. The Plaintiff, Lester M.
Entin Associates, is the landlord of the property in which the Company's Boca
Raton restaurant was located. The Plaintiff claims that the Company has
defaulted on its lease with the Plaintiff. The Plaintiff is seeking $221,304 in
damages. As of the date of the accompanying report, the litigation was on going.

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      On July 18, 2005, the Company issued 19,000,000 shares of the Company's
common stock previously classified as issuable in connection with the conversion
of $60,800 of secured convertible debentures, as discussed in Note 10 in the
accompanying unaudited consolidated financial statements.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

      Note Payable issued on August 18, 2004 to an unrelated party, due January
3, 2005, in the amount of $250,000, at an interest rate of 12%. The Note is
currently in default at an interest rate of 14%.

      Note Payable issued on November 3, 2004 to an unrelated party, due June 2,
2005, in face amount of $150,000, at an interest rate of 12%. The Note is
currently in default at an interest rate of 24%.

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:

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION                                        LOCATION
-----------       -----------                                        --------
<S>               <C>                                                <C>
2.1               Articles of Incorporation, as amended              Incorporated by reference to Exhibit 2 to Form
                                                                     10-SB filed on October 6, 1999

3.1               By-laws                                            Incorporated by reference to Exhibit 3(a) to Form
                                                                     10-SB filed on October 6, 1999

3.2               Articles of Incorporation of Healthy Bites Grill   Incorporated by reference to Exhibit 3(b) to Form
                  of Boca, Inc.                                      10-QSB filed on August 13,2001

3.3               Articles of Incorporation for Health Express       Incorporated by reference to Exhibit 3(b) to Form
                  Franchise Company                                  10-QSB filed on August 13, 2001

4.1               Warrants for 38,000 shares issued to Francorp,     Incorporated by reference to Exhibit 4 to Form 10-QSB
                  Inc.                                               filed on August 13, 2001
</TABLE>


                                       19
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION                                        LOCATION
-----------       -----------                                        --------
<S>               <C>                                                <C>
4.2               Warrants for 2,000,000 shares issued to Rider      Incorporated by reference to Exhibit 4 to Form 10-
                  Insurance Company                                  QSB filed on August 13, 2001

10.1              Lease between Health Express USA, Inc. and Saul    Incorporated by reference to Exhibit 10(a) to Form
                  Strachman                                          10-SB filed on October 6, 1999

10.2              Lease - Healthy Bites Grill of Boca, Inc.          Incorporated by reference to Exhibit 10 to
                                                                     Form 10-QSB filed on May 14, 2001

10.3              Employment agreement of Bruno Sartori              Incorporated by reference to Exhibit 10 to Form
                                                                     10-QSB on November 14, 2000 and incorporated
                                                                     herein by such reference.

10.4              Employment Agreement of Douglas Baker              Incorporated by reference to Exhibit 10.4 to Form
                                                                     10-KSB filed on March 26, 2003

10.5              Employment Agreement of Marco D'Alonzo             Incorporated by reference to Exhibit 10.5 to Form
                                                                     10-KSB filed on March 26, 2003

10.6              Employment Agreement of Raymond Nevin              Incorporated by reference to Exhibit 10.6 to Form
                                                                     10-KSB filed on March 26, 2003

10.7              Franchise Development Agreement with Francorp,     Incorporated by reference to Exhibit 10(c) to Form
                  Inc.                                               10-QSB filed on August 13, 2001

10.9              Franchise agreement between Health Express and     Incorporated by reference to Exhibit 10.9 to Form
                  The Junie Corp.                                    10-KSB filed on March 26, 2003

10.10             Lease between Crown Diversified Industries and     Incorporated by reference to Exhibit 10 to Form
                  Health Express, Inc. dated May 2, 2002             10-QSB filed on May 15, 2002

10.11             Standard Asset Purchase Contract and Receipt       Incorporated by reference to Exhibit 99.2 to Form 8-K
                                                                     filed on October 9, 2002

10.12             Fourth Addendum to Standard Asset Purchase         Incorporated by reference to Exhibit 99.3 to Form 8-K
                                                                     filed on October 9, 2002

10.13             Addendum to Fourth Addendum to Standard Asset      Incorporated by reference to Exhibit 99.4 to Form 8-K
                  Purchase Contract and Receipt dated                filed on October 9, 2002
                  September 23, 2002

10.14             Agreement between Health Express, Inc. and         Incorporated by reference to Exhibit 99.5 to Form 8-K
                  Roll-A-Round Real Roast Beef, Inc. dated           filed on October 9, 2002
                  September 23, 2002

10.15             Lease Amendment and Assignment Agreement           Incorporated by reference to Exhibit 99.5 to Form
                  dated September 18, 2002                           8-K filed on October 9, 2002
</TABLE>


                                       20
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION                                        LOCATION
-----------       -----------                                        --------
<S>               <C>                                                <C>
10.16             Addendum to Lease Amendment and Assignment         Incorporated by reference to Exhibit 99.7 to Form 8K
                  Agreement dated September 23, 2002                 filed on October 9, 2002

10.17             Escrow Agreement dated September 23, 2002          Incorporated by reference to Exhibit 99.8 to Form 8K
                                                                     filed on October 9, 2002

10.19             Equity Line of Credit Agreement dated March 13,    Incorporated by reference to Exhibit 10.19 to
                  2003 between Health Express and Cornell Capital    Amendment No. 1 to Form 10-KSB filed on April 24, 2003
                  Partners, LP

10.20             Registration Rights Agreement dated March 13,      Incorporated by reference to Exhibit 10.20 to
                  2003 between Health Express and Cornell Capital    Form 10-KSB filed on March 26, 2003
                  Partners,

10.21             Escrow Agreement dated March 13, 2003 among        Incorporated by reference to Exhibit 10.20
                  the Registrant, Cornell Capital Partners, LP,      to Form 10-KSB filed on March 26, 2003
                  Butler

10.22             Securities Purchase Agreement dated January 17,    Incorporated by reference to Exhibit 10.20 to
                  2003 among Health Express and the Buyers           Form 10-KSB filed on March 26, 2003

10.23             Escrow Agreement dated January 17, 2003 among      Incorporated by reference to Exhibit 10.20 to Form
                  Health Express, the Buyers and Butler Gonzalez,    10-KSB filed on March 26, 2003
                  LP

10.24             Debenture Agreement dated January 17, 2003         Incorporated by reference to Exhibit 10.20
                  between Health Express and Cornell                 to Form 10-KSB filed on March 26, 2003
                  Capital Partners LP

10.25             Investors Registration Rights Agreement dated      Incorporated by reference to Exhibit 10.20
                  March 13, 2003 between Health Express and the      to Form 10-KSB filed on March 26, 2003
                  Investors

10.26             Placement Agent Agreement dated March 13, 2003     Incorporated by reference to Exhibit 10.20 to Form
                  among Health Express NT Capital Equities, Ltd.     10-KSB filed on March 26, 2003
                  and Cornell Partners LP

10.27             Lease Modification - Health Bites Grill of Boca,   Incorporated by reference to Exhibit 10.27 to Form
                  Inc.                                               10-KSB filed on March 29, 2004

10.28             Franchise Agreement between Health Express and     Incorporated by reference to Exhibit 10.28 to Form
                  Myrick Corporation                                 10-KSB filed on March 29, 2004

10.29             Promissory Note to Cornell Capital Partners for    Incorporated by reference to Exhibit 10.29 to Form
                  $175,000                                           10-KSB filed on March 20, 2005
</TABLE>


                                       21
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION                                        LOCATION
-----------       -----------                                        --------
<S>               <C>                                                <C>
10.30             Secured Promissory Note to AIM American            Incorporated by reference to Exhibit 99.1 to Form 8-K
                  Mortgage, Inc. dated March 9, 2005                 filed on March 11, 2005

10.31             Settlement Agreement with Mutual Releases, dated   Incorporated by reference to Exhibit 10.1 to Form 8-K
                  June 15, 2005, by and among the Health Express     filed on June 17, 2005
                  USA, Inc., Health Express Franchise Company, The
                  Myrick Corp., The Junie Corp. and Susan
                  Greenfield

10.32             Settlement Agreement with Mutual Releases, dated   Incorporated by reference to Exhibit 10.1 to Form 8-K
                  June 15, 2005, by and between Health Express       filed on June 17, 2005
                  USA, Inc. and Charles D. Bleiwise

10.33             Share  Exchange  Agreement,  dated June 17, 2005,  Incorporated by reference to Exhibit 99.1 to Form 8-K
                  by and among the Health  Express USA,  Inc.,  CSI  filed on June 21, 2005
                  Business  Finance,  Inc. and the  shareholders of
                  CSI Business Finance, Inc.

14.1              Code of Ethics                                     Incorporated by reference to Exhibit 14.1 to Form
                                                                     10-KSB filed on March 29, 2004

31.1              Certification by Chief Executive Officer           Provided herewith
                  pursuant to 15 U.S.C. Section 7241, as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002

31.2              Certification by Chief Financial Officer           Provided herewith
                  pursuant to 15 U.S.C. Section 7241, as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002

32.1              Certification by Chief Executive Officer and       Provided herewith
                  Chief Financial Officer pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906
                  of the Sarbanes-Oxley Act of 2002
</TABLE>


                                       22
<PAGE>

      (b) Reports on Form 8-K:

      On June 21, 2005 Health Express USA, Inc., the Company filed Form 8-k with
the U.S. Securities and Exchange Commission (the "SEC") disclosing the Share
Exchange Agreement, dated June 17, 2005, by and among the Company, CSI Business
Finance, Inc. a Texas corporation ("CSI") and the shareholders of CSI (the "CSI
Shareholders"). Pursuant to the Share Exchange Agreement, the CSI Shareholders
exchanged with, and delivered to, the Company the issued and outstanding common
stock of CSI in exchange for 100,000 shares of Series A Convertible Preferred
Stock, par value $0.01 per share, of the Company, Each share of the Health
Express Series A Preferred Stock is convertible into 19,500 shares of common
stock of the Company. The Shareholders transferred and exchanged the CSI Common
Stock for the Health Express Series A Preferred Stock so that effectively after
the conversion of the preferred stock, shares of common stock issued upon
conversion of the preferred stock shall equal Ninety-Seven and One Half percent
(97.5%) of the issued and outstanding shares of common stock of Health Express.
As a result of the Share Exchange Agreement, CSI will become a wholly-owned
subsidiary of the Company.

      On June 17, 2005, the Company filed Form 8-K with the SEC disclosing the
Settlement Agreement with Mutual Releases, dated June 15, 2005, by and among the
Company, Health Express Franchise Company, The Myrick Corp., The Junie Corp. and
Susan Greenfield, whereby the parties agreed to terminate all the obligations
due and owning under several agreements enumerated therein and to mutually
release one another from any liability in connection with the matters set forth
in these agreements.

      On June 17, 2005, the Company also filed a Form 8-K with the SEC
disclosing the Settlement Agreement with Mutual Releases, dated June 15, 2005,
by and between the Company and Charles D. Bleiwise, whereby the parties agreed
to terminate a 5% convertible debenture in the amount of $60,000 issued to
Bleiwise in August 2003 and to mutually release one another from any liability
in connection with the matters set forth in the Settlement Agreement.


                                       23
<PAGE>
                                  SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Health Express has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date:  August 17, 2005                       HEALTH EXPRESS USA, INC.

                                             By:    /s/ Douglas Baker
                                                    ----------------------------
                                             Name:  Douglas Baker
                                             Title: Chief Executive Officer and
                                                    Principal Accounting Officer


                                       24