UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 27, 2005

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                           OF THE EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM _________TO______________

                         COMMISSION FILE NUMBER 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 May 7, 2005
       -----                         ---------------------------------

   Common Stock                                50,000,000

<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

                    HEALTH EXPRESS USA, INC. AND SUBSIDIARIES

ITEM 1.  FINANCIAL STATEMENTS.


                                       2
<PAGE>

                    Health Express USA, Inc. and Subsidiaries

                        Consolidated Financial Statements
                                 March 27, 2005
                                 --------------
                                   (Unaudited)
                                Table Of Contents

                                                                      Page
                                                                      ----

Consolidated Balance Sheet (Unaudited)                                4

Consolidated Statements of Operations (Unaudited)                     5

Consolidated Statements of Cash Flows (Unaudited)                     6

Notes to Consolidated Financial Statements (Unaudited)                7 - 14


                                       3
<PAGE>

                   Health Express USA, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                 March 27, 2005
                                   (Unaudited)

ASSETS

Current Assets
 Cash                                                            $      4,018
 Prepaids                                                                  36
 Assets of discontinued operations                                        124
                                                                 ------------
Total Current Assets                                                    4,178
                                                                 ------------
Other Assets
 Debt issue costs                                                       2,503
 Deposits                                                               4,433
                                                                 ------------
Total Other Assets                                                      6,936
                                                                 ------------
Property and Equipment, net                                             2,495
                                                                 ------------
Total Assets                                                     $     13,609
                                                                 ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
 Accounts payable                                                $     29,409
 Accrued liabilities                                                    8,338
 Loan payable                                                          30,000
 Accrued compensation and related taxes - related parties             203,048
 Notes payable, net of debt discount                                  367,619
 Accrued interest payable                                              49,945
 Notes payable - related party                                        171,660
 Accrued interest payable - related party                              23,273
 Convertible debenture                                                 25,000
 Liabilities of discontinued operations                               231,109
                                                                 ------------
Total Current Liabilities                                           1,139,401
                                                                 ------------
Long Term Liabilities
 Convertible debenture                                                 60,000
                                                                 ------------
Total Long Term Liabilities                                            60,000
                                                                 ------------
Total Liabilities                                                   1,199,401
                                                                 ------------
Commitments and Contingencies (Note 9)
Stockholders' Deficiency
 Preferred stock, Series A, $0.01 par value, 10,000,000
       shares authorized, none issued and outstanding                      --
 Common stock, $0.001 par value, 50,000,000 shares authorized
   49,820,187 shares issued and 37,595,741 shares outstanding          37,596
 Additional paid in capital                                        10,076,118
 Accumulated deficit                                              (11,299,506)
                                                                 ------------
Total Stockholders' Deficiency                                     (1,185,792)
                                                                 ------------
Total Liabilities and Stockholders' Deficiency                   $     13,609
                                                                 ============

     See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                      Consolidated Statements of Operations
          For The Three Months Ended March 27, 2005 and March 28, 2004
                                  (Unaudited)

                                              2005             2004
                                          ------------     ------------
Revenue                                   $         --     $         --
                                          ------------     ------------
Operating Expenses
Compensation                                        --          127,735
Debt issue cost expense                          5,107           10,980
Depreciation                                       243              205
General and Administrative                      66,475           65,439
                                          ------------     ------------
Total Operating Expenses                        71,825          204,359
                                          ------------     ------------
Loss from Operations                           (71,825)        (204,359)
                                          ------------     ------------
Other Income (Expense)
Interest income                                      1               12
Other income                                     5,349               --
Interest expense                               (22,447)         (11,912)
                                          ------------     ------------
Total Other Income (Expense), net              (17,097)         (11,900)
                                          ------------     ------------
Net Loss from Continuing Operations       $    (88,922)    $   (216,259)
                                          ============     ============
Discontinued Operations
 Loss from operations of discontinued
 component (including loss on disposal
 of $0)                                           (494)         (26,509)
                                          ------------     ------------
Loss on Discontinued Operations                   (494)         (26,509)
                                          ------------     ------------
Net Loss                                  $    (89,416)    $   (242,768)
                                          ============     ============
Net Loss Per Share - Basic and Diluted
Loss from continuing operations           $      (0.00)    $      (0.02)
Loss from discontinued operations         $      (0.00)    $      (0.00)
                                          ------------     ------------
Net Loss Per Share - Basic and Diluted    $      (0.00)    $      (0.02)
                                          ============     ============
Weighted average number of shares
        outstanding during the period -
        basic and diluted                   36,171,966       12,836,181
                                          ============     ============

      See accompanying notes to unaudited consolidated financial statements


                                       5
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
           For The Three Years Ended March 27, 2005 and March 28, 2005
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             2005           2004
                                                                           ---------     ---------
<S>                                                                        <C>           <C>
Cash Flows from Operating Activities:
Net loss                                                                   $ (89,416)    $(242,768)
Adjustments to reconcile net loss to net cash used in
   operating activities:
Amortization of debt issue costs                                               5,107        10,980
Amortization of debt discount costs                                            3,949            --
Depreciation                                                                     243           205
Stock issued for compensation and interest                                        --        10,833
Changes in operating assets and liabilities:
(Increase) decrease in:
 Other receivables                                                             5,239            --
 Prepaids and other assets                                                       352        (4,183)
 Assets of discontinued operations                                             5,311         5,425
Increase (decrease) in:
 Accounts payable                                                             15,382       (15,339)
 Accrued liabilities                                                          16,368            --
 Liabilities of discontinued operations                                       (2,678)           --
                                                                           ---------     ---------
Net Cash Used in Operating Activities                                        (40,143)     (234,847)
                                                                           ---------     ---------
Cash Flows from Investing Activities:
 Purchase of equipment                                                            --        (3,323)
                                                                           ---------     ---------
Net Cash Used in Investing Activities                                             --        (3,323)
                                                                           ---------     ---------
Cash Flows from Financing Activities:
 Proceeds from issuance of notes, net of debt discount                            --       549,255
 Proceeds from loan                                                           30,000            --
 Repayment of notes payable - related parties                                 (8,000)           --
                                                                           ---------     ---------
Net Cash Provided by Financing Activities                                     22,000       549,255
                                                                           ---------     ---------

Net Increase (Decrease) in Cash                                            $ (18,143)    $ 311,085

Cash at Beginning of Year                                                     22,161        59,076
                                                                           ---------     ---------
Cash at End of Year                                                        $   4,018     $ 370,161
                                                                           =========     =========
Supplemental Disclosure of Cash Flow Information
Cash Paid for:
   Interest                                                                $      --     $     306
                                                                           =========     =========
   Taxes                                                                   $      --     $      --
                                                                           =========     =========
Supplemental Disclosure of Non Cash Investing and Financing Activities:
 Stock issued to settle debenture                                          $  50,000     $      --
                                                                           =========     =========
   Stock issued under equity line of credit to pay down promissory
       notes                                                               $  30,000     $ 200,000
                                                                           =========     =========
</TABLE>

      See accompanying notes to unaudited consolidated financial statements


                                       6
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)

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 committed to selling 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 months ended March 27, 2005,  the Company did not recognize any
revenues.  During the three months ended March 28, 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


                                       7
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)

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 March 27, 2005 and March 28, 2004 by approximately
7,213,139 and 7,358,637, respectively.

On March 9, 2005,  the Company issued  12,224,446  shares as collateral for loan
proceeds  of  $30,000.  These  shares  are in  escrow  and  are  not  considered
outstanding for purposes of computing net loss per share (See Note 6(B))

(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 ends on the last Sunday of March.

Note 3  Going Concern

As reflected in the accompanying  unaudited  consolidated  financial statements,
the Company has a net loss of $89,416 and net cash used in operations of $40,143
for the three  months  ended  March 27,  2005,  and an  accumulated  deficit  of
$11,299,506,  a working  capital  deficiency of $1,135,223  and a  stockholders'
deficiency of $1,185,792 at March 27, 2005.


                                       9
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)

The  Company  has  incurred  cumulative  losses  since  inception,   has  funded
operations  primarily through  related-party loans and investor capital, has yet
to generate  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 (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 is
currently  seeking  an  acquisition   target.  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  committed  to selling  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.

The following is a summary of the assets and  liabilities  of the disposal group
at March 27, 2005:

                     Assets to be disposed of:
         -------------------------------------------------
         Cash - Boca store                                     $    124
                                                               --------
         Total Assets to be disposed of                        $    124
                                                               ========

                   Liabilities to be disposed of:
         -------------------------------------------------
         Accounts Payable - Boca store                         $  6,392
         Accrued Liabilities - Ft. Lauderdale store               3,413
         Accrued Liabilities - Boca store                       221,304
                                                               --------
         Total Liabilities to be disposed of                   $231,109
                                                               ========


                                       10
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)

         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  $221,304.  The  civil  action  was  filed on
         December 8, 2004.  At March 27, 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 Three Months          For the Three Months
                                                    Ended March 27, 2005          Ended March 28, 2004
                                                  --------------------------     ------------------------
<S>                                                      <C>                            <C>
         Revenues                                        $      --                      $ 181,690

         Cost of Sales and Controllable Expenses         $      --                      $ 192,862
                                                         ---------                      ---------
         Gross Profit (Loss)                             $      --                      $ (11,172)

         Operating Expenses                              $     494                      $  15,481

         Other income                                    $      --                      $     144
                                                         ---------                      ---------
         Loss on Discontinued Operations                 $    (494)                     $ (26,509)
</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  $1,597 and are included in the total
         liabilities of discontinued operations balance of $231,109 at March 27,
         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 sale of this  debenture,
$190,000 of principal  has been repaid  through the issuance of shares under the
terms of the equity line. (See Note 7(A))

On January 10, 2005,  Cornell assigned its interest in a separate debenture that
had a current amount due of $75,000.  The assignees are unrelated  third parties
and paid the  lender  $50,000 to acquire  $50,000 of the  $75,000  face value of
convertible  debentures.  The $50,000 of  principal  was  converted to 7,575,758
shares. No gain or loss was recognized on this  transaction.  At March 27, 2005,
the Company reflects a


                                       11
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)

short-term liability of $25,000 for convertible  debentures plus related accrued
interest of $19,185. (See Note 7(A))

At March 27, 2005, the Company  reflects a long term  liability for  convertible
debentures 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 March 27, 2005, the remaining  portion of the  capitalized
     debt issue cost asset was $0. Debt issue cost  expense for the three months
     ended March 27, 2005 and March 28, 2004 were $640 and $0, respectively. The
     outstanding  related accrued  interest at March 27, 2005 was $18,476.  (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  March  27,  2005,  the  outstanding  balance  net of a debt
     discount  totaling  $0 was  $250,000.  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 advances 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 advances 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 March 27, 2005, the remaining  portion of the  capitalized
     debt issue cost asset was  $2,503.  Debt issue cost  expense  for the three
     months  ended  March  27,  2005 and  March 28,  2004  were  $3,400  and $0,
     respectively.  The outstanding  related accrued  interest at March 27, 2005
     was $12,284. (See summary below)

     Upon the issuance of the $150,000 promissory note, $7,500 was recorded as a
     debt discount contra


                                       12
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)

     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 March 27, 2005,
     the  outstanding  balance  net  of a  debt  discount  totaling  $2,381  was
     $147,619.

     The  following  is a summary  of  outstanding  Notes  Payable,  net of debt
     discount at March 27, 2005:

         Note Payable - August 18, 2004                              $220,000
         Note payable - November 3, 2004                              147,619
                                                                     --------
         Total Notes Payable                                         $367,619
                                                                     ========

         The  following is a summary of Debt  Discount at March 27, 2005;  these
         amounts are netted against the face value of the promissory notes:

         Note Payable - August 18, 2004                              $     --
         Note payable - November 3, 2004                                2,381
                                                                     --------
         Total Debt Issue Costs                                      $  2,381
                                                                     ========

         The following is a summary of total Accrued  Interest  Payable at March
         27, 2005:

         Note Payable - August 18, 2004                              $ 18,476
         Note payable - November 3, 2004                               12,284
         Convertible debentures                                         4,408
                                                                     --------
         Total Accrued Interest Payable                              $ 35,168
                                                                     ========

         The following is a summary of capitalized Debt Issue Costs at March 27,
         2005:

         Note Payable - August 18, 2004                              $     --
         Note payable - November 3, 2004                                2,503
                                                                     --------
         Total Debt Issue Costs                                      $  2,503
                                                                     ========

     (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 is currently secured by 12,224,446 shares of common stock.
     These shares are in escrow.  The shares are not considered  outstanding for
     purposes of computing earnings per share.


                                       13
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)
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. Under this agreement, the Company may
     issue and sell to Cornell  common stock for a total purchase price of up to
     $5,000,000.  Subject to certain conditions, the Company is entitled to draw
     down on the Equity  Line of Credit  now that the common  stock to be issued
     under the  Equity  Line of Credit is  registered  with the  Securities  and
     Exchange  Commission and the registration  statement was declared effective
     on July 24, 2003 and for two years  thereafter.  The purchase price for the
     shares is equal to 95% of the market price,  which is defined as the lowest
     closing  bid  price  of the  common  stock  during  the five  trading  days
     following  the notice  date.  The  amount of each  advance is subject to an
     aggregate  maximum  advance amount of $100,000,  with no advance  occurring
     within seven trading days of a prior advance. In addition,  in each advance
     notice the Company shall establish a minimum acceptable price,  whereby the
     amount requested in the advance notice shall automatically  decrease by 20%
     for each day of the five succeeding trading days that the closing bid price
     is below the minimum acceptable price.  Cornell is entitled to retain a fee
     of 5% of each advance.  The 5% fee is repaid over successive draws as it is
     deducted from the gross distribution.

     The following is a summary of stock issuances during the three months ended
     March 27, 2005:

<TABLE>
<CAPTION>
         Draw down on equity line and conversion of
         outstanding debentures                                                                  Fair Value of Stock Issued in
                                                              Quantity of Shares Issued           connection with conversion
         ------------------------------------------------- --------------------------------- --------------------------------------
<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
         January 10, 2005 (See Note 5)                                 7,575,758                                 --
                                                                      ----------                            -------
                                                                      11,293,628                            $30,000
                                                                      ==========                            =======
</TABLE>

     (B)  Common Stock Options and Warrants

     There were no options or warrants  granted  during the three  months  ended
     March 27, 2005 and March 28, 2004, respectively.

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 March 27,
2005,  the balance due was  $171,660.  Related  accrued  interest to all related
parties totaled $23,273.

Note 9 Commitments and Contingencies

From time to time we 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.


                                       14
<PAGE>

                    Health Express USA, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                 March 27, 2005
                                   (Unaudited)

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 March 27, 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 $221,304.  The civil action was
filed on December 8, 2004.  At March 27, 2005,  there has been no  resolution to
this matter.

During April 2005, the Company settled matters  pertaining to an employee claim.
(See Note 10)

Note 10 Subsequent Events

On April 18, 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 18, 2005.  The note  reflected an interest  rate of 12%. In the event of
default,  default  rate of interest is 18%.  Upon the  issuance of the  $175,000
promissory note,  $25,000 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.

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. (See Note 9)


                                       15
<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 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 three months ended March 27, 2005,  the Company did not recognize any
revenues.  During the three months ended March 28, 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  and  plans to sell its  operating  entity  which  will
conclude its operations in the restaurant business.

Going Concern

As reflected in the accompanying  unaudited  consolidated  financial statements,
the Company has a net loss of $89,416 and net cash used in operations of $40,143
for the three  months  ended  March 27,  2005,  and an  accumulated  deficit  of
$11,299,506  a working  capital  deficiency of  $1,135,223  and a  stockholders'
deficiency of $1,185,792 at March 27, 2005.

The  Company  has  incurred  cumulative  losses  since  inception,   has  funded
operations  primarily through  related-party loans and investor capital, has yet
to generate  sufficient  revenues  from its  operating  activities  to cover its
expenses and has taken formal action to discontinue  its restaurant  operations.
The Company is in default on its  obligation  to repay  $280,000  in  promissory
notes.  Of the total,  $250,000  represents a  promissory  note and $30,000 is a
loan.

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 is
currently  seeking  an  acquisition   target.  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.

Default On Obligations

         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


                                       16
<PAGE>

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. As of the
date of the accompanying  report, the Company is in default on its obligation to
repay this $250,000 note payable.

         On March 9, 2005, the Company received $30,000 in working capital funds
from an unrelated third party. The loan carries an interest rate of 12% per year
(computed  on the bases of a 365-day  year and the actual  days  elapsed)  until
paid. The loan was due May 1, 2005. The loan is currently  secured by 12,224,446
shares of common  stock.  These  shares  are in escrow and are to be paid to Aim
American  Mortgage in the event of default.  This loan is  currently in default.
The shares are not  considered  outstanding  for purposes of computing  loss per
share.

Critical Accounting Policies And Estimates

         Management's  discussion  and analysis of our  financial  condition and
results  of  operations  are based  upon our  unaudited  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.  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 months ended March 27, 2005,  the Company did not recognize any
revenues.  During the three months ended March 28, 2004,  revenues earned by the
Company were reflected as a component of discontinued operations.

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.


                                       17
<PAGE>

For The Three Months Ended March 27, 2005, Compared To The Three Months Ended
March 28, 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 March 27, 2005 and March 28,
2004.  There was no revenue  recognized  during these three 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 $71,825 for three months ended March 27, 2005. These expenses consisted
mainly of $66,475 in general  and  administrative  expenses,  and $5,107 of debt
issue costs.  The operating  expenses for the three month period ended March 27,
2005 decreased by $132,534 compared to $204,359 for the three months ended March
28, 2004. The decrease in 2005 was due to a decrease in compensation as a result
of closing our operations.

         Net Loss

         Health Express had a  consolidated  net loss for the three months ended
March 27, 2005 of $89,416.  In the same  period for 2004,  Health  Express had a
consolidated net loss of $242,768.  The decrease in net loss of $153,352 for the
three  month  comparable  periods  was  attributable   mainly  to  decreases  in
compensation and loss from discontinued operations.

<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                      -----------------------------
                                                                       March 27,          March 28,
                                                                        2005                2004
                                                                      -----------       -----------
                                                                      (Unaudited)       (Unaudited)

<S>                                                                   <C>               <C>
         Income (loss) from Restaurant Operations, Healthy Bites
           Grill of Boca, Inc. (component of discontinued
           operations)                                                $      (493)      ($   26,509)
         Income (loss) from Restaurant Operations, Healthy Bites
           Grill (component of discontinued operations)                        --                --
         Income (loss) from Health Express Franchise Company                  (21)              (12)
         Income (loss) attributed to Health Express USA, Inc.             (88,902)         (216,244)
                                                                      -----------       -----------

         Consolidated net loss                                        $   (89,416)      $   242,768
                                                                      ===========       ===========
</TABLE>

Liquidity And Capital Resources

         As of March 27, 2005 the Company has  approximately  $4,018 in cash and
cash equivalents. 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 three months ended March
27, 2005 was $40,143,  compared to $234,847 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 three  months ended
March 27, 2005,  compared to $3,323 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 $22,000 for the three months
ended March 27, 2005, compared to $549,255 in the same period for 2004. The cash
provided in the 2005 and 2004  periods  primarily  were from the  proceeds  from
loans and from notes, respectively.

         On April 18, 2005, the Company  executed a promissory note with Cornell
Capital  Partners  in the face  amount of  $175,000.  The note had a term of six
months and matures on October 18, 2005.  The note  reflected an interest rate of
12%. In the event of  default,  the  default  rate of interest is 18%.  Upon the
issuance  of the  $175,000  promissory  note,  $25,000  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.


                                       18
<PAGE>

         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.  At March
27, 2005 the Company is in default on its obligation to repay this $250,000 note
payable.

         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 December 26, 2004 was
$4,521.  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 December 26, 2004,
the outstanding balance net of a debt discount totaling $5,616 was $144,384.  As
of March 27, 2005, the outstanding balance net of debt discount totalling $2,381
was $147,619.

         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 December 26, 2004 $135,000
in  convertible  debentures  remains  outstanding,  of which  $75,000 is held by
Cornell Capital  Partners and $60,000 are held by Mr.  Blewise.

         On January  10,  2005,  Cornell  assigned  its  interest  in a separate
debenture that had a current amount due of $75,000.  The assignees are unrelated
third parties and paid the lender $50,000 to acquire $50,000 of the $75,000 face
value of  convertible  debentures.  The $50,000 of  principal  was  converted to
7,575,758 shares.  No gain or loss was recognized on this transaction.  At March
27, 2005, the Company reflects a short-term liability of $25,000 for convertible
debentures plus related accrued interest of $19,185.

         On March 13,  2003,  the Company  entered into an Equity Line of Credit
Agreement with Cornell Capital Partners.  Under this agreement,  the Company may
issue  and sell to  Cornell  common  stock for a total  purchase  price of up to
$5,000,000.  Subject to certain conditions, the Company is entitled to draw down
on the Equity  Line of Credit now that the common  stock to be issued  under the
Equity Line of Credit is registered with the Securities and Exchange  Commission
and the registration  statement was declared  effective on July 24, 2003 and for


                                       19
<PAGE>

two years  thereafter.  The purchase price for the shares is equal to 95% of the
market  price,  which is defined as the lowest  closing  bid price of the common
stock during the five trading days following the notice date. The amount of each
advance is subject to an aggregate  maximum advance amount of $100,000,  with no
advance occurring within seven trading days of a prior advance. In addition,  in
each advance  notice the Company  shall  establish a minimum  acceptable  price,
whereby the amount requested in the advance notice shall automatically  decrease
by 20% for each day of the five  succeeding  trading  days that the  closing bid
price is below  the  minimum  acceptable  price.  Cornell  received  a  one-time
commitment  fee of $90,000,  of which $75,000 was withheld from the January 2003
closing of the convertible debenture, and the balance was paid from the proceeds
of the initial  advance under the Equity Line of Credit.  Cornell is entitled to
retain a fee of 5% of each  advance.  In  addition,  the Company  entered into a
placement  agent  agreement  with  TN  Capital  Equities,   Ltd.,  a  registered
broker-dealer.  Pursuant to the placement agent agreement, Health Express paid a
one-time  placement  agent  fee  of  9,524  shares  of  common  stock  equal  to
approximately  $10,000 based on the  Company's  stock price on January 24, 2003.
The Company had  utilized  all of the shares  previously  registered  for resale
under the Equity Line of Credit, and therefore filed an additional  registration
statement July 15, 2004 relating to 14,738,635  additional shares to possibly be
issued  under the  Equity  Line of Credit  and other  shares.  The  registration
statement was declared  effective by the Securities  and Exchange  Commission on
July 30,  2004.  During the year ended  December  26,  2004,  the  Company  drew
$749,109  under the Equity Line of Credit.  Of the total,  $725,000  was used to
reduce outstanding principal related to outstanding promissory notes and $24,109
represented the settlement of related accrued interest. In connection with these
draw downs, the Company issued 13,282,353 shares of common stock.

         On  December  9, 2003,  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 holding 404,581 shares
of common stock under the terms of the Equity Line of Credit.

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.

(B)      Changes In Internal Controls Over Financial Reporting

         In connection  with the evaluation of the Company's  internal  controls
during the Company's three months ended March 27, 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.


                                       20
<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. The litigation is on going.

ITEM 2.  CHANGES IN SECURITIES

ITEM 3. DEFAULT UPON SENIOR SECURITIES

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 March 27, 2005, the outstanding
balance net of a debt discount totaling $2,381 was $147,619.

         On March 9, 2005, the Company received $30,000 in working capital funds
from an unrelated third party. The loan carries an interest rate of 12% per year
(computed  on the bases of a 365-day  year and the actual  days  elapsed)  until
paid. The loan was due May 1, 2005. The loan is currently  secured by 12,224,446
shares of common  stock.  These  shares  are in escrow and are to be paid to Aim
American  Mortgage in the event of default.  This loan is  currently in default.
The shares are not considered outstanding for purposes of computing net loss per
share.

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
</TABLE>


                                       21
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION                                        LOCATION
-----------       -----------                                        --------
<S>               <C>                                                <C>
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

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
</TABLE>



                                       22
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION                                        LOCATION
-----------       -----------                                        --------
<S>               <C>                                                <C>
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

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
</TABLE>


                                       23
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION                                        LOCATION
-----------       -----------                                        --------
<S>               <C>                                                <C>
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

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

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>

         (b)  Reports on Form 8-K:

         None.


                                       24
<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:  May 27, 2005                       HEALTH EXPRESS USA, INC.

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


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