UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20459

                                   FORM 10-KSB

                     REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
                    PERIOD FROM JULY 1, 2001 TO JUNE 30, 2002

                         Commission file number 0-18094

                             UNIVERSAL EXPRESS, INC.

                      A Nevada Corporation ID.# 11-2781803

           1230 Avenue of the Americas, Suite 771, Rockefeller Center,
                              New York, N.Y. 10020

        Registrant's telephone number including area code (212) 239-2575

           Securities registered under Section 12(b) of the Act: NONE
                                                                 ----

              Securities registered under Section 12(g) of the Act:

                 CLASS A COMMON STOCK PAR VALUE $0.005 PER SHARE


Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days. Yes X      No
            -----     -----


Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.



<PAGE>




State issuer's revenues for the period: $431,199. State the aggregate market
value of the voting and non-voting stock held by non-affiliates computed by
reference to the price at which the stock was sold, or the average bid and asked
prices of such stock, as of a specified date within the past 60 days: As of
August 27, 2002, $4,118,030 (based on 191,536,324) shares held by non-affiliates
and computed by reference to the average closing bid and asked prices of the
Common Stock.


Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes X      No
                                                 -----     -----

The registrant had 224,076,498 shares of its $.005 par value Class A Common
Stock issued and outstanding as of June 30, 2002 and 1,280,000 shares of Class B
Common Stock.


Total number of sequentially numbered pages in this document:  (24).


Documents Incorporated by Reference: None.







                                      -2-
<PAGE>


                                     PART I

                                     ITEM 1

                             DESCRIPTION OF BUSINESS

                                     HISTORY

The Company was originally incorporated in the state of Nevada on April 6, 1983.

Universal Express, Inc. (USXP) has evolved into a conglomerate of supportive
companies centered on its private postal system.

Its principal businesses include the Private Postal Network(TM)(PPN), Universal
Express Logistics, Inc., which includes WorldPost(TM), Virtual Bellhop(R)and
Luggage Express(TM), and Universal Express Capital Corp.

On September 4, 2002, the Company announced that it completed the purchase of a
majority interest in Swiss American Financial Corp. One of Swiss American's
initial programs will be offering a stored-value MasterCard(R) from a major New
York Bank that can be utilized as a simple "credit/debit" card for purchases, as
an ATM card for cash withdrawals from any ATM machine worldwide, a method of
transferring funds globally to relatives at minimal cost and a myriad of other
credit applications. This bank-approved program is able to offer a 100% approval
rate with no credit check.

Its association of independent and franchise nationwide postal stores (PPN)
continues to evolve into a sophisticated buying service and market penetration
vehicle.

WorldPost(TM), its discounted international delivery service, will earn revenues
from selling Skynet discounted envelopes and services to the postal stores, as
well as selling territory businesses for entrepreneurs interested in selling
these shipping services to independent businesses.

Luggage Express(TM) will enable consumers to have their baggage picked up at
their home by a local PPN member store and delivered to the consumers'
destination.

Virtual Bellhop(R) is a premier door-to-door luggage transportation service.

Universal Express Capital Corp. is a full service asset based
transportation/equipment leasing company.

USXP continues to mature as an accepted participant within the shipping and
postal store industry.

The web site for the company and its businesses is http://www.usxp.com.




                                      -3-
<PAGE>

                         THE BUSINESS OF THE CORPORATION

Universal Express, Inc. (USXP) has evolved into a conglomerate of supportive
companies and divisions centered around its private postal system.

The Company's principal subsidiaries and divisions are:
Private Postal Network(TM)
WorldPost(TM)
Virtual Bellhop(TM)
Luggage Express(TM)
Universal Express Capital Corp.

                                   MARKETPLACE

A different global economy has grown over the past decade. With Internet and
Catalog sales increasing it now requires an inexpensive and responsive final
mile Domestic and International delivery network. USXP's Private Postal Network,
coupled with warehouse and shipping capabilities, has been created by
Universal's family of companies thus creating that final mile network.

The business of Universal has undergone expansion in the last decade. These
changes will support its growing private postal network utilizing the 20,000
potential North American postal retail stores presently grossing over $8 billion
in sales. Strong strategic relationships are currently being established with
companies and manufacturers (page 5), which should empower our 8000 present
members of the Private Postal Network.

Members of this Private Postal Network now provide the public with a possible
complement to the U.S. Post Office for many retail and business postal services.
In addition, these Postal Service Centers offer individuals and business
customers a variety of personal and business services as well as merchandise.

The Company believes that many companies will eventually need an affordable
distribution system to deliver what their consumers purchase. Universal Express
believes it has indeed positioned itself to be a contender in the global economy
for the next decade with the creation of its additional subsidiaries, Luggage
Express and Virtual Bellhop (Universal Express' Logistics luggage delivery
services), WorldPost (Universal Express Logistics international delivery system)
and Universal Express Capital's lease financing.




                                      -4-
<PAGE>


                             PRIVATE POSTAL NETWORK
                                (pbcnetwork.com)

The Private Postal Network is an association formed to create a very much-needed
partnership between previously unconnected shipping and packaging storeowners.
This concept has been accomplished many times before in American industries,
most notably by FTD's maturation of the independent florists across America and
Interflora's unification and development of florists in Europe. The Private
Postal Network provides independent storeowners with a variety of cost effective
services and products to help increase their profitability, while they are able
to maintain their local or franchised identities. The Private Postal Network
mission statement is to provide consumers with a feeling of quality assurance
when they choose to visit a member location and to have the owners of these
locations utilize the various association services offered for them and their
customers to augment their profitability.


                 THE SERVICE DIVISION OF PRIVATE POSTAL NETWORK

International Shipping:                   WORLDPOST.COM
Corrugated & Packaging:                   PACKAGING TECHNOLOGIES
Lamination and Photo ID's:                D&K LAMINEX
Customized Rubber Stamps:                 THESTAMPMAKER.COM
Equipment Leasing:                        ADVANTAGE LEASING
Key Machines and Supplies:                LV SALES
Moving Supplies:                          ALL BOXES DIRECT
Car Rental:                               HERTZ RENT-A-CAR
Customized Corrugated:                    CACTUS CORRUGATED
ATM Machines:                             E-TRADE
Business and Office Supplies:             PBCNBIZSUPPLIES.COM
Parcel Insurance:                         UNIVERSAL PARCEL INSURANCE CO.
Credit Card Processing:                   SINGLE SOURCE FINANCIAL SERVICES
Check Processing:                         ECHECK2000.COM
Payroll and Tax Processing:               PAYCHEX
Air Miles Incentive Program:              AMERICAN AIRLINES
Travel and Entertainment:                 RESLINX
Shredder Cushioning Systems:              PAC-MATE
Air Purification Systems:                 AIR-TECH
Free Software:                            FREESOFT PROMOTIONS
Internet Access:                          PBC PRIVATE LABEL SERVICES



                                      -5-
<PAGE>



                                  WORLDPOST(TM)
                             (worldpostnetwork.com)

To understand WorldPost's International Delivery Territory opportunity one must
begin with an explanation of Skyworld's history and its past relationship to
Universal Express.

SkyWorld International Couriers, Inc. is the U.S. member of the SkyNet Worldwide
Express Network, an alliance of independently owned and operated express courier
services operating in 268 cities in 120 countries. SkyWorld developed and owns
the SkyNet Trademark in the U.S. and most countries in Latin America. The SkyNet
Network provides global delivery and logistics services to multinational firms.
The Network currently delivers over 650,000 packages per month. It is the
world's largest independently owned courier network and the 5th largest express
courier network behind the integrated U.S. express carriers such as FedEx, UPS
and DHL.

Unlike the major integrators who operate their own aircraft and thus offer rigid
standardized pick up and delivery schedules, SkyNet Network members offer
flexible, customized International services to meet the clients' specific
distribution needs. Instead of operating its own fleet, SkyNet offers express
International air courier service and expedited air cargo through regularly
scheduled commercial airlines to transport time sensitive documents, parcels,
freight and mail. SkyNet provides on demand a scheduled pick up and delivery
courier and freight services in the U.S. and in foreign countries throughout the
world. It provides 24 to 72 hour delivery throughout the world.

Hubs operated by SkyNet Network members in Miami, London, Dubai, Johannesburg,
Brussels, Singapore and Sydney allow the swift delivery of documents and parcels
to almost any destination in the world within 72 hours.

Universal Express purchased and then after one year later sold SkyWorld to a
Lanchile subsidiary importantly retaining discounted international rates for its
Private Postal Network members and customers along with the rights to sell
WorldPost territory business opportunities throughout North America. A WorldPost
territory can be bought for as little as $80,000. The purchaser is trained at
SkyNet Miami and Universal Express Logistics' offices, PPN and WorldPost offices
also located in Florida. The purchaser of this territory will become part of a
lucrative international shipping business with PPN postal stores to help him
begin his new business. He will have discounted envelopes and rate chart and an
override on the other services of participating postal stores in his territory.
The purchaser will have aligned himself with over 268 international shipping
partners and his rates are on the average of 20-50% below the traditional
carriers.

According to industry averages, the Postal stores alone ship approximately
$600,000,000 annually in international packages. Any percentage of that volume,
coupled with over 600 locations to be sold @ $80,000 per location indicates a
potential growth subsidiary.



                                      -6-
<PAGE>


The strategic synergy between WorldPost and USXP's Postal Store Association
enhance its position in the shipping and service industry.

Universal Express's strategy of developing the Private Postal Network and
WorldPost simultaneously is unique to the shipping industry. These postal
locations can now create an inexpensive localized international delivery network
for themselves rather than only offering the more expensive traditional
carriers.


                                 VIRTUAL BELLHOP
                               virtualbellhop.com

Virtual Bellhop is the leading service provider specializing in luggage
logistics. Through advanced technology, the internet and the existing service
infrastructures of strategic partners Virtual Bellhop facilitates and manages
the movement of door to door baggage and other items for leisure and business
travelers.

With over 75 years of logistical corporate and entrepreneurial experience in
relevant core businesses, Virtual Bellhop has created a powerful logistical
business model driven by multi channel distribution and multi market demand.
Virtual Bellhop has established unique strategic relationships with travel
service providers and distribution partners.

There are significant market opportunities not limited to the one billion plus
checked bags presently being moved each year. In addition, increased carry-on
restrictions and security measures can upset time critical business trips as
well as add loss or damage to luggage concerns, offering airline space saving
and reduced employee overhead will allow the creation of a new revenue stream
for re-selling or marketing Virtual Bellhop services.

Making travel easier and more enjoyable through luggage free travel is defined
by Virtual Bellhop. The very difficult process of transporting baggage from
doorstep to destination and back again will be replaced by Virtual Bellhop's
vision of travel in the future.

Whether it be through partners like hotels, airlines, cruise lines, credit card
companies, airline or travel agencies, or simply their neighborhood postal
store, that offers to introduce Americans to luggage free travel, Virtual
Bellhop is there.

On April 30, 2002 Virtual Bellhop was featured in The Wall Street Journal as the
best service in the United States in the movement of luggage for airline
passengers.

On July 3, 2002 Virtual Bellhop formed a marketing partnership with American
Express' Travel & Leisure Elite Traveler to provide its 65,000 members with
exclusive access to the transport door-to-door of baggage, sports equipment,
business materials and related items for airline travelers.



                                      -7-
<PAGE>


On July 31, 2002 Virtual Bellhop partnered with Fairmont Hotels to provide
access to Virtual Bellhop's discounted platinum luggage delivery service for
U.S. residents travelling to one of 11 select Fairmont properties within the
Continental United States or Hawaii.

On August 15, 2002, Virtual Bellhop signed a partnership agreement with Andrew
Harper's Q Club, an organization which offers hotel reservations and other top
level travel concierge related services to an exclusive group of executive
travelers.


                               LUGGAGE EXPRESS(TM)
                             usxpluggageexpress.com


Luggage Express has identified a significant niche in the travel industry - the
transportation of passenger's luggage to and from home, hotel, office and,
exclusively, postal store members. According to the Port Authority, the airports
in the New York area (JFK, LaGuardia and Newark) processed 84 million passengers
in 1997 (a number that is increasing yearly) with 148,680,000 items of check-in
luggage (an average of 1.77 pieces per passenger). Nationwide over 1.5 billion
suitcases are presently being checked by domestic passengers themselves. Luggage
Express is a division of Universal Express Logistics, Inc.

There is no branded consumer accepted commercial luggage transportation service
anywhere else in America. Universal Private Postal Network provides over 8000
no-cost warehouse locations.

The service includes luggage collection from home, hotel or business and
delivery to consumer's end destination. Immediate benefits to the travelers
include: convenience, help with large and heavy luggage items, avoiding long
baggage check-in lines and minimizing pre-flight waiting time, as well as delays
at retrieval carousels at journey's end.

The inbound service includes collection by local postal stores or related
service providers of passenger's luggage and then delivery by major carriers to
the final destination. Arrangements for international customs clearance will be
part of the service.

Another passenger benefit is the enhanced insurance at an additional cost if
desired and safety of the passenger's luggage through the soon to be introduced
protective plastic wrap-around on each item.

At the same time, there are significant benefits to the airlines, which include:
customer satisfaction, easier check-in, a secure alternative to curb-side
check-in, less congestion in the departure hall with less luggage to screen and
it should minimize departure delays. Negotiations are currently underway with
airlines to offer the luggage service to first-class and business class
passengers.



                                      -8-
<PAGE>

Luggage Express plans to charge approximately $80 to $95 per piece of dropped
off or picked up luggage. The average couple, traveling for 10-14 days, with 3
pieces of luggage will presently spend $2500-3000 for such a trip. The addition
of $240 is minimal for the added convenience of not having to stand in line for
2 hours prior to departure and no movement of luggage issues.

Luggage Express, may conduct sales through travel agents as an affiliate
program, which will offer the service to their clients when their tickets are
booked. The service will be advertised directing passengers to call an 800
number for pick-up. It is estimated that 30% of the luggage business will be
derived from travel agents or travel website efforts.

While USXP cannot be definite as to the market penetration that it will achieve,
the FAA expects the number of airline passengers to double by 2005, making
domestic luggage exceed 3 billion suitcases.

The short-term goal of USXP Logistics is to go international with its 268
worldwide partners once it has reached a 1% market penetration, utilizing its
postal business center warehouse network presently located in all 50 states.

Luggage Express' website (www.usxpluggageexpress.com) is expected to be easy to
remember and will fully explain the services to the public. By November 2002, an
automatic quote upgrade will allow members to book 100% on-line. Luggage
Express, which was featured in the May 31, 2002 edition of USA Today in an
article on luggage transportation and lately in the Sun Sentinel article in
September 2002, announced on July 8, 2002 that its innovative new website,
WWW.USXPLUGGAGEEXPRESS.COM, provides on-line quote requests and handling
information for luggage-free travel, along with providing, information on a
traveler's destination.

On August 8, 2002, Luggage Express announced its Luggage Express Travelers Club
(LE Club) program providing annual club memberships entitling members to
register their luggage for up-to-20 one-way deliveries in the U.S., for a
special discounted rate. Also, on September 4, 2002 Luggage Express announced
that its services would be featured on all video equipped United Airlines
flights for September, 2002 with 2.8 million to 3 million traveler exposures.


                         UNIVERSAL EXPRESS CAPITAL CORP.
                                 usxpcapital.com

The USXP family of companies has broadened the nature of its core business by
entering the financial services industry via the subsidiary of Universal Express
Capital Corp. A full service, asset based transportation/equipment lessor,
Universal Express Capital provides capital acquisition funding, in the form of
lease financing, to the national business community as well as within the
framework of Universal Express other affiliates and subsidiaries.


                                      -9-
<PAGE>


Leasing is widely recognized as the intelligent choice for financing the
purchase of income producing equipment for all industries. Domestic growth of
lease financing continues to be impressive. Today, over 40% of financed
purchases are facilitated with leasing capital as opposed to 20% just 10 years
ago.

Universal Express Capital's dedicated team of professionals has forged strategic
alliances with various manufacturing firms within an identified spectrum of
markets. The industries they service include, but are not limited to, the
following: limousines, livery, small fleets, rental vehicles, local delivery
vans/trucks, buses and aircraft. Programs are designed to serve the needs of the
national manufacturer, regional distributor, and local vendor/dealer.

The present day conventional banking environment provides a huge market
penetration potential. In light of the many financial mergers and acquisitions
in conjunction with a cloudy international banking climate, tighter lending
requirements have provided funding opportunities to non-banking groups, such as
Universal Express Capital Corp. A minimum annual projection of lease
originations of $24,000,000 should provide a strong growth subsidiary for USXP.
Universal Express Capital's management team has a strong production and service
background providing a foundation for revenues well in excess of projections.

USXP Capital has established various non-recourse lending relationships with
leading national consumer auto lenders. It also has developed a Nationwide
Van/Truck Leasing Program to be available to private postal stores and small
businesses.

On June 12, 2002, Universal Express Capital announced plans to purchase GO
Automotive Leasing Corp., a well established commercial leasing company with
approximately $20,000,000 worth of lease receivable assets. Additionally, other
tentative lease portfolio purchases and quality acquisitions within this
industry provide a solid platform for strong growth for many years to come.

                     UNIVERSAL EXPRESS TRANSPORTATION, INC.

Universal Express Transportation Inc is our newest business designed to develop
and market the exclusive rights to the patented Neoplan Intermodal Coach, a new
"over the road" bus vehicle designed to carry both passengers and express
freight. Also, Universal Express has established strategic alliance
relationships with nationally recognized quality coach fabricators and
manufacturers with the specific purpose of retrofitting existing bus fleets to
add freight to the carrying capability for buses to achieve, among other things,
a less expensive form of movement of luggage packages and mail. Universal
Express Capital will play an important role in the financing of these programs.




                                      -10-
<PAGE>





                                   COMPETITION

The company believes that the maturation of the Private Postal Network ("PPN")
will strengthen the profitable atmosphere of this cottage private postal
industry. Lack of financial strength and market penetration have prevented some
excellent franchisors and independent stores from properly promoting their
services. The ability of PPN to create a nationally accepted private postal
industry that the American public will embrace and trust should recreate a
viable industry. The Company feels it can convince through financial discounts
the independent and nationwide franchisors that they must self-regulate for
consumer acceptance and seize this opportunity to become part of this new
cooperative partnership and private postal system.

                               INDUSTRY BACKGROUND

The future of the industry lies predominately in the international business
community and domestic acceptance of private postal stores as a natural cohesive
industry. As the world moves towards a Global Economy and trade tariffs begin to
break down, the Company believes that new shipping markets and small business
opportunities will be developed and the key ingredients underlying these
developments will be transportation and outlets for carriers as well as final
mile fulfillment for direct marketing products.

The opportunities to expand our corporate scope are limitless due to shipping,
logistical distribution needs and growth of services through the world.

The transportation industry has already developed the necessary infrastructure
and continues to grow. The Company believes that the missing ingredients needed
to make this industry improve are packaging, logistics and inexpensive
residential locations.

The Company believes that a nationwide organized domestic fulfillment network
with an affordable International Delivery System can become a key player in the
Global Economy. The Company has positioned itself to be that public player in
this lucrative market.

Members of PPN provide the public with a complement to U.S. Post Offices for
many retail postal services. In addition, our Service Centers offer individuals
and business customers a variety of personal, business and communications
services and merchandise.



                                      -11-
<PAGE>


                                   MANAGEMENT

Mr. Richard A. Altomare has been President and CEO of Universal Express since
May 1992. Mr. Altomare directs the Company, and is continuing to build a
multi-faceted Company foundation for future growth in the global marketplace. He
envisions a synergistic company capable of creating a profitable partnership
between packaging store owners and their carriers, as well as building
innovative businesses in the logistics and transportation fields.


                         TRADE MARKS AND SERVICE MARKS

The Company is the owner of tradenames, trademarks and service marks for the
names and marks Universal Express(TM), Private Postal Network(TM), USXP
Capital(TM), WorldPost(TM), Luggage Express(TM), Virtual Bellhop(R), USXP
Logistics(TM) and USXP Transportation(TM).


                                    EMPLOYEES

As of June 30, 2002, the Company employed 20 individuals.  The Company has not
experienced any work stoppages and considers its relations with its employees to
be excellent. To facilitate its Private Postal Network, USXP Capital, Luggage
Express and WorldPost(TM) expansion plans, management expects to engage in
significant hiring of management, sales, operational and support personnel
during 2002 and beyond. The Company's Stock Option Plan provides for the
issuance of up to 1.25 million shares of the Company's common stock.

                                     ITEM 2

                            DESCRIPTION OF PROPERTIES

USXP's present corporate headquarters is located at 1230 Avenue of the Americas,
New York, New York, with administrative offices at 5295 Town Center Road, Boca
Raton, Florida. The Private Postal Network has an office in Centereach, New
York. Virtual Bellhop has offices in Chicago, Illinois.

                                     ITEM 3

                                LEGAL PROCEEDINGS

The Company was awarded a $389 million dollar damage verdict by a jury in Dade
County, Florida, upon which judgment was entered, against Select Capital, Ronald
G. Williams and Walter Kolker. We believe that the judgment, which is
non-appealable, is substantially collectible.



                                      -12-
<PAGE>


The Company is involved in several lawsuits with vendors and suppliers and
claims for fees of certain professionals. These claims are all disputed by the
Company. The Company believes that disposition of these matters will not have a
material adverse effect on the Company's financial position.




                                     ITEM 4

                 SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

No meeting of shareholders was held during the year.



                                     PART II

                                     ITEM 5

            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Class A Common Stock has been trading under the symbol "USXP" on
the automated quotation system maintained by the National Quotation Bureau,
Inc., (the "Bulletin Board").

The following table sets forth the range of high and low bid quotations on the
Bulletin Board for the Common Stock during the quarterly periods of the Current
Period. The source of these quotations is the National Quotations Bureau. These
quotations reflect inter-dealer prices, without retail mark-up, mark-down, or
commission and may not represent actual transactions.
                                                         BID
               QUARTER ENDED               LOW                     HIGH

                  9/30/01                  $0.014                 $0.198
                 12/31/01                  $0.031                 $0.083
                  3/31/02                  $0.032                 $0.061
                  6/30/02                  $0.019                 $0.039

As of June 30, 2002, there were over 7,000 holders of record of the Company's
Common Stock.

The Transfer Agent and Registrar of the Company's Common Stock is OTC Corporate
Transfer Service Co.

A 8% stock dividend was declared in this fiscal year.



                                      -13-
<PAGE>




                                     ITEM 6

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATION

Included in this report are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations reflected in such forward-looking
statements will prove to be correct. The Company's actual results could differ
materially from those anticipated in the forward-looking statements as a result
of certain factors, including sales levels, distribution and competition trends
and other market factors.



                                    OVERVIEW:

Management is continually concentrating on raising new capital to further
develop the Private Postal Network, its multi-faceted national private postal
business centers nationwide connected through the World Wide Web, and for future
acquisitions.

Management views this year as a period of growth based upon its decision to
concentrate on core business development through the Private Postal Network,
WorldPost(TM), Virtual Bellhop(R), Luggage Express(TM) and USXP Capital(TM).

The sale of Skynet and Manhattan Concierge last year permitted the Company to
shed a considerable amount of liabilities, in order to concentrate on its core
businesses and to seek synergistic acquisitions, while retaining the benefits of
territory sales for Skynet and Manhattan Concierge and $700,000 worth of credits
with Skynet for WorldPost shipments. Although these credits represent a
significant asset to the Company, they will be accounted for as used.

On August 27, 2002, the Company announced that its investors have collectively
agreed to convert their $2,500,000 of previously invested stock rights for
restricted common shares at $0.32 per share.




                                      -14-
<PAGE>




LIQUIDITY AND CAPITAL RESOURCES

During the twelve-month period ended June 30, 2002, the Company's financing
activities provided $2,213,656 while $2,221,630 was used in its operating and
investing activities.

The Company's working capital deficiency for fiscal 2002 was $2,108,000 compared
with $3,371,000 in fiscal 2001. This decrease reflects a substantial decrease in
the Company's liabilities.

The Company's net loss for fiscal 2002 was $3,499,000 compared with $2,960,000
in fiscal 2001. This increase reflects investments in two new businesses,
Virtual Bellhop and Universal Express Capital.

Until the Private Postal Network, Virtual Bellhop, USXP Capital and
WorldPost(TM) are fully developed, the Company will continue to rely on equity
and debt raises to fund its operations. Management is continuing efforts to
raise cash by arranging lines of credit, and obtaining additional equity
capital. The Company's future business operations will require additional
capital.

Management is presently exploring methods to increase available credit lines as
well as methods to increase working capital through both traditional and
non-traditional debt services.

During this fiscal year, the Company's Chairman purchased 16,300,000 shares from
an investor at $.074 per share. On July 7, 2002, the Company authorized
additional 100,000,000 shares of common stock.


                                     ITEM 7

                              FINANCIAL STATEMENTS

The Company's audited financial statements for the Current Period are found on
the next succeeding pages of this Report on Form 10-KSB.






                                      -15-
<PAGE>




                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES

                              FINANCIAL STATEMENTS

                             JUNE 30, 2002 AND 2001




























<PAGE>





                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                        INDEX TO THE FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001






                                                                            Page
                                                                          ----

Independent Auditors' Report...........................................    F-1

Financial Statements

      Consolidated Balance Sheet.......................................    F-2

      Consolidated Statements of Operations and
          Comprehensive Income (Loss)..................................    F-3

      Consolidated Statements of Stockholders' Equity..................    F-4

      Consolidated Statements of Cash Flows............................  F-5-F6

      Notes to Consolidated Financial Statements....................... F-7-F-19








<PAGE>






                          Independent Auditors' Report




To the Board of Directors and Stockholders of
Universal Express, Inc. and Subsidiaries


We have audited the accompanying consolidated balance sheet of Universal
Express, Inc. and Subsidiaries as of June 30, 2002 and the related consolidated
statements of operations and comprehensive (loss), stockholders' equity and cash
flows for the year ended June 30, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Universal Express, Inc. and Subsidiaries as of June 30, 2002 and the
consolidated results of their operations and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in the notes to the
Consolidated Financial Statements, the Company incurred a loss of $3,498,838
from continuing operations for the year ended June 30, 2002 and had a working
capital deficiency of $2,107,637 at June 30, 2002. These conditions raise
substantial doubt about the Company's ability to continue as a going concern
without the raising of additional debt and/or equity financing to fund
operations. Management's plans in regard to these matters are described in the
notes to the Consolidated Financial Statements. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



Bridgewater, New Jersey
August 2, 2002



                                                                             F-1








INDEPENDENT AUDITORS' REPORT

To the Stockholders and
Board of Directors of
Universal Express, Inc. and Subsidiaries

We have audited the accompanying consolidated statements of operations and
comprehensive income (loss), stockholders' deficiency and cash flows of
Universal Express, Inc. and Subsidiaries for the year ended June 30, 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated results of Universal Express,
Inc., and Subsidiaries operations and cash flows for the year ended June 30,
2001 in conformity with accounting principles generally accepted in the United
States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company incurred loss of approximately
$3,479,000 from continuing operations for the year ended June 30, 2001 and  had
a working capital and stockholders' deficiency of approximately $3,371,000 at
June 30, 2001. These conditions raise substantial doubt about the Company's
ability to continue as a going concern without the raising of additional debt
and/or equity financing to fund operations. Management's plans in regard to
these matters are described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


                                                   /s/ FELDMAN SHERB & CO., P.C.
                                                   -----------------------------
                                                    Feldman Sherb & Co., P.C.
                                                    Certified Public Accountants

New York, New York
October 11, 2001


<PAGE>


<TABLE>
<CAPTION>




                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2002

         Assets

Current Assets

<S>                                                                       <C>
    Cash                                                                     $         31,342

    Accounts receivable                                                                18,039

    Other receivables                                                                   7,700

    Other current assets                                                               46,391

      Total Current Assets                                                            103,472

Property and Equipment, net                                                            88,688

Other Assets

    Loan to officer                                                                   878,811

    Related party receivables                                                         891,424

    Goodwill                                                                          397,107

    Other assets                                                                       14,385

      Total Other Assets                                                            2,181,727

      Total Assets                                                                  2,373,887

      Liabilities and Stockholders' Equity

Current Liabilities
    Accrued officers' salary                                                        1,012,400
    Accounts payable                                                                  392,640
    Accrued expenses                                                                  339,433
    Accrued interest                                                                  168,380
    Bank line of credit                                                                49,990
    Current maturities of long-term debt                                               77,266
    Notes payable                                                                      71,000
    Convertible debenture                                                             100,000
      Total Current Liabilities                                                     2,211,109

Long-Term Debt, Net of Current Maturities                                             144,507

      Total Liabilities                                                             2,355,616

Commitments and Contingencies

Stockholders' Equity

    Common stock, $.005 par value; authorized 250,000,000 shares,
224,126,498 shares issued, 224,076,498 shares outstanding                           1,120,634

    Class B common stock, $.005 par value; authorized 3,000,000 shares
1,280,000 shares issued and outstanding                                                 6,400

    Additional paid-in capital                                                     34,087,036

    Accumulated deficit                                                          (33,375,583)

    Accumulated other comprehensive income (loss)                                   (119,400)

    Stock rights                                                                    2,721,502

    Common stock in treasury, at cost, 50,000 shares                                 (18,000)

    Deferred service costs                                                        (4,404,318)

      Total Stockholders' Equity                                                       18,271

         Total Liabilities and Stockholders' Equity                          $      2,373,887
                                                                               ===============

</TABLE>



                                                                             F-2

 See notes to consolidated financial statements.



<PAGE>



<TABLE>
<CAPTION>

                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)


                                                                               Years Ended June 30,
                                                                     ------------------------------------

                                                                              2002                 2001
                                                                              ----                 ----

<S>                                                              <C>                <C>
Revenue                                                            $         431,199  $            1,780

Cost of goods sold                                                           395,706                   -

Gross Profit                                                                  35,493               1,780



Selling, general and administrative                                        3,521,569           3,177,822

Depreciation                                                                  20,419               1,235

      Total Operating Expenses                                             3,541,988           3,179,057


Loss From Operations                                                     (3,506,495)         (3,177,277)



Other Income (Expense)

    Interest income                                                           49,765                   -

    Interest expense                                                        (42,108)           (301,442)

      Total Other Income (Expense)                                             7,657           (301,442)



Loss From Continuing Operations                                          (3,498,838)         (3,478,719)



Discontinued Operations:

    Loss from discontinued operations                                              -           (733,798)

    Net gain from disposal of discontinued operations,
      net of income taxes                                                          -           1,252,992


Income From Discontinued Operations                                                -             519,194


Net Loss                                                           $     (3,498,838)  $      (2,959,525)


Basic Income (Loss) Earnings Per Share

    Continuing operations                                                     (0.02)              (0.07)

    Loss from discontinued operations                                              -              (0.02)

    Gain from disposal of discontinued operations                                  -                0.03


Basic Loss Per Common Shares                                       $          (0.02)  $           (0.06)


Weighted Average Common Shares Outstanding                               161,689,593          47,488,651


Net Loss                                                           $     (3,498,838)  $      (2,959,525)


Other Comprehensive Income (Loss)

    Unrealized loss on marketable securities                                (26,400)            (93,000)


Comprehensive Income (Loss)                                        $     (3,525,238)  $      (3,052,525)
                                                                     ================   =================

</TABLE>





                                                                             F-3
See notes to consolidated financial statements.



<PAGE>



<TABLE>
<CAPTION>

                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY








                                                         Common Stock              Class B Stock
                                                                                                           Paid In        Stock
                                                 # of Shares       Amount       # of Shares     Amount     Capital        Rights
                                                 -----------       ------       -----------     ------     -------        ------



<S>                                            <C>         <C>             <C>          <C>        <C>           <C>
Balance July 1, 2000                              18,819,439  $     94,097    1,280,000    $   6,400  $ 23,866,861  $    795,002


Sale of Common Stock                              10,656,203        53,281            -            -       616,494     (174,775)

Common Shares Issued for Deferred Services        24,708,300       123,542            -            -       967,873             -

Amortization of Deferred Services                          -             -            -            -             -             -

Common Shares Issued for Services                  2,169,782        10,849            -            -       484,550             -

Common Shares Issued for Conversion
   of Debentures and Interest                      7,500,000        37,500            -            -       805,860             -

Common Shares Issued for Dividend                    997,565         4,988            -            -       (4,988)             -

Common Shares Issued for Accrued Officers Salary  17,000,000        85,000            -            -       732,600             -

Common Shares Issued for Investment                3,000,000        15,000            -            -       105,000             -

Cash Received for Stock Rights                             -             -            -            -             -       360,000

Unrealized Loss on Marketable Securities                   -             -            -            -             -             -

Cumulative Translation Adjustment                          -             -            -            -             -             -

Net Loss                                                   -             -            -            -             -             -


Balance June 30, 2001                             84,851,289       424,257    1,280,000        6,400    27,574,250       980,227


Sale of Common Stock                               2,136,509        10,683            -            -       192,967             -

Common Shares Issued for Deferred Services        94,083,160       470,416            -            -     4,917,572             -

Amortization of Deferred Services                          -             -            -            -             -             -

Common Shares Issued for Services                  3,481,668        17,408            -            -       119,352             -
          Common Shares Issued for Conversion
             of Loans and Interest                13,401,722        67,009            -            -       779,491             -

Common Shares Issued for Dividends                 9,801,623        49,008            -            -      (49,008)             -

Common Shares Issued for Investment                4,402,999        22,015            -            -       170,105             -

Warrants Issued for Investment                             -             -            -            -        16,920             -

Common Shares Issued for Stock Rights             11,967,528        59,838            -            -       365,387     (425,225)

Cash Received for Stock Rights                             -             -            -            -             -     2,166,500

Common Shares Purchased from Investors                     -             -            -            -             -             -

Unrealized Loss on Marketable Securities                   -             -            -            -             -             -

Net Loss                                                   -             -            -            -             -             -



Balance June 30, 2002                            224,126,498  $  1,120,634    1,280,000    $   6,400  $ 34,087,036  $  2,721,502
                                                =============   ===========  ===========   ==========   ===========   ===========


</TABLE>




<TABLE>
<CAPTION>



                                                                                  Accumulated
                                                                                    Other      Cumulative
                                               Treasury Stock     Accumulated   Comprehensive  Translation  Deferred
                                            # of Shares   Amount     Deficit        Income      Adjustment  Services       Totals
                                            -----------   ------     -------        ------      ----------  --------     ---------



<S>                                     <C>        <C>          <C>            <C>         <C>         <C>           <C>
Balance July 1, 2000                         40,000  $ (12,000)   $(26,917,220)  $        -  $  182,883  $(1,087,687)  $ (3,071,664)


Sale of Common Stock                              -           -               -           -           -             -       495,000

Common Shares Issued for Deferred Services        -           -               -           -           -   (1,091,415)           -

Amortization of Deferred Services                 -           -               -           -           -     1,376,187     1,376,187

Common Shares Issued for Services                 -           -               -           -           -             -       495,399

Common Shares Issued for Conversion
   of Debentures and Interest                     -           -               -           -           -             -       843,360

Common Shares Issued for Dividend                 -           -               -           -           -             -           -

Common Shares Issued for Accrued
  Officers Salary                                 -           -               -           -           -             -       817,600

Common Shares Issued for Investment               -           -               -           -           -             -       120,000

Cash Received for Stock Rights                    -           -               -           -           -             -       360.000

Unrealized Loss on Marketable Securities          -           -               -    (93,000)           -             -       (93,000)

Cumulative Translation Adjustment                 -           -               -           -   (182,883)             -      (182,883)

Net Loss                                          -           -     (2,959,525)           -           -             -    (2,959,525)


Balance June 30, 2001                        40,000    (12,000)    (29,876,745)    (93,000)           -     (802,915)    (1,799,526)


Sale of Common Stock                              -           -               -           -           -             -       203,650

Common Shares Issued for Deferred Services        -           -               -           -           -   (5,387,988)           -

Amortization of Deferred Services                 -           -               -           -           -     1,786,585     1,786,585

Common Shares Issued for Services                 -           -               -           -           -             -       136,760
     Common Shares Issued for Conversion
       of Loans and Interest                      -           -               -           -           -             -       846,500

Common Shares Issued for Dividends                -           -               -           -           -             -           -

Common Shares Issued for Investment               -           -               -           -           -             -       192,120

Warrants Issued for Investment                    -           -               -           -           -             -        16,920

Common Shares Issued for Stock Rights             -           -               -           -           -             -           -

Cash Received for Stock Rights                    -           -               -           -           -             -     2,166,500

Common Shares Purchased from Investors       10,000     (6,000)               -           -           -             -        (6,000)

Unrealized Loss on Marketable Securities          -           -               -    (26,400)           -             -       (26,400)

Net Loss                                          -           -     (3,498,838)           -           -             -    (3,498,838)



Balance June 30, 2002                        50,000  $ (18,000)   $(33,375,583)  $(119,400)           -  $(4,404,318)    $   18,271
                                           =========   =========   =============  ==========  ==========  ============   ===========


</TABLE>


                                                                             F-4

<PAGE>


<TABLE>
<CAPTION>

                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                  Years Ended June 30,
=====================================================================    ---------------------------------------
                                                                                2002                  2001
                                                                                ----                  ----

Cash Flows From Operating Activities
<S>                                                                  <C>                   <C>
      Net Loss                                                         $      (3,498,838)    $      (2,959,525)
    Adjustments to Reconcile Net Loss to Net Cash
      Used in Operating Activities
         Depreciation                                                              20,419                 1,235
         Common shares issued for services                                        136,760             1,871,586
         Unrealized loss                                                         (26,400)                     -
         Gain from disposal of discontinued operations                                  -           (1,252,992)
         Amortization of deferred services                                      1,786,585                     -
    Changes in assets and liabilities
         Accounts receivable                                                     (18,039)                69,822
         Other receivables                                                        110,700             (118,400)
         Other assets                                                            (19,706)                 3,471
         Accounts payable and accrued expenses                                  (198,365)               655,075
         Payroll taxes payable                                                  (157,986)                32,508
         Other liabilities                                                       (50,951)              (73,412)
         Change in net assets of discontinued operations                                -             1,165,138
                                                                       ------------------    ------------------
            Total adjustments                                                  1,583,017             2,354,031
                                                                       ------------------    ------------------
Net Cash Used in Operating Activities                                         (1,915,821)             (605,494)
                                                                       ------------------    ------------------

Cash Flows From Investing Activities
    Acquisition of cash                                                            17,303                     -
    Loan to officer                                                                 8,253              (17,164)
    Related party receivables                                                   (300,000)             (241,165)
    Acquisition of property and equipment                                        (31,365)              (45,000)
                                                                       ------------------    ------------------
Net Cash Used In Investing Activities                                           (305,809)             (303,329)
                                                                       ------------------    ------------------

Cash Flows From Financing Activities
    Sale of common stock                                                          203,650               495,000
    Repayment of issuance of convertible debt                                    (89,000)                     -
    Repayment of bank line of credit                                             (18,643)                     -
    Net proceeds (repayment) of notes payable                                    (42,851)                72,316
    Proceeds from stock rights                                                  2,166,500               360,000
    Purchase of treasury stock                                                    (6,000)                     -
                                                                       ------------------    ------------------
Net Cash Provided by Financing Activities                                       2,213,656               927,316
                                                                       ------------------    ------------------

Net Increase (Decrease) in Cash                                                   (7,974)                18,493
Cash - Beginning of Year                                                           39,316                20,823
                                                                       ------------------    ------------------
Cash - End of Year                                                                 31,342    $           39,316
                                                                       ------------------    ------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid during the year for interest                             $           22,393    $            8,350
                                                                         =================     =================



</TABLE>




                                                                             F-5
See notes to consolidated financial statements.



<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


Non Cash Investing and Financing Activities

For the year ended June 30, 2002:

      The Company issued 94,083,160 shares of common stock valued at $5,387,988
      for deferred services. The Company issued 3,481,668 shares of common stock
      valued at $136,760 for services. The Company issued 13,401,722 shares of
      common stock for the conversion of loans and interest in the amount
of $846,500.
      The Company issued 9,801,623 shares of common stock in accordance with the
declaration of an 8% stock dividend.
      The Company issued 4,402,999 shares of common stock, 940,000 warrants to
purchase shares of common stock and a $90,000 note payable for the purchase of
Virtual Bellhop LLC. Total non cash value was $299,000.
      The Company issued 11,967,528 shares of common stock for the conversion of
$425,225 of stock rights.

For the year ended June 30, 2001:

      Seenote 16 for the issuance of common shares for dividends, stock rights,
         services, conversion of debentures and accrued interest and unrealized
         holding loss on marketable securities.
































                                                                             F-6

<PAGE>



                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

    Nature of Organization

           Universal Express, Inc. ("USXP" or "the Company") was incorporated in
           the state of Nevada on April 6, 1983 and is an integrated business to
           business services company centered around the private postal and
           international shipping industries. Its principal subsidiaries include
           Universal Express Capital Corp. and Universal Express Logistics, Inc.
           (which includes Virtual Bellhop, LLC, Luggage Express and Worldpost,
           its international shipping divisions), and Private Postal Center
           Network.com (PPN Network) and its division Postal Business Center
           Network.com ("PBC Network").

           The PPN Network is an association with the goal of unifying and
           organizing independent and franchised postal stores nationwide.

           Universal Express Capital Corp. is a full service asset based
           transportation/equipment leasing brokerage company.

           Virtual Bellhop, Inc. is a door to door luggage transportation
           service with established unique strategic relationships with well
           know travel service providers and distribution partners.

           Luggage Express provides transportation of passenger's luggage to and
           from home, hotel, office, and, exclusively, postal store members

           On January 2, 2001, USXP sold its 51% interest in SkyWorld
           International Couriers, Inc. ("SkyNet") in exchange for $400,000,
           $200,000 of which was paid at closing and the balance to be paid over
           seven months, a non-exclusive license to sublicense the SkyNet name
           in connection with an international courier service in the United
           States, and delivery service credits of $700,000 provided that USXP
           shall not use no more then $50,000 in credits in any one month,
           unless authorized by SkyNet. Through June 30, 2002, the Company has
           used $7,518 of the aforementioned credits.

           On May 11, 2001 USXP sold all of the assets of its subsidiary
           Downtown Theater Ticket Agency, Inc. ("DTTA") for $50,000 and a
           promissory note of approximately $392,000 payable over approximately
           33 years.

           In addition, USXP owns several other subsidiaries with little or no
           activity and seeks new acquisitions which will complement the PBC
           Network.

           Hereinafter, all of the aforementioned companies are collectively
           referred to as the "Company".

      Basis of Presentation

           The accompanying consolidated financial statements have been prepared
           assuming the Company will continue as a going concern. The Company
           incurred losses from continuing operations of $3,498,838 and
           $3,478,719 for the years ended June 30, 2002 and 2001, respectively,
           and had a working capital deficiency of $2,107,637 at June 30, 2002.
           These conditions raise substantial doubt about the Company's ability
           to continue as a going concern without the raising of additional debt
           and/or equity financing to fund operations. Management is actively
           pursuing new debt and/or equity financing and is continually
           evaluating the Company's operations, however, any results of their
           plans and actions cannot be assured. The consolidated financial
           statements do not include any adjustments that might result from the
           outcome of this uncertainty.


                                                                             F-7
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES, Continued

      Principles of Consolidation

           The accompanying financial statements consolidate the accounts of
           USXP and its wholly-owned subsidiaries. All significant intercompany
           transactions and balances have been eliminated in consolidation.

      Revenue Recognition

           For the luggage transportation operations, revenue is recognized upon
           delivery of the luggage.

           For the transportation/equipment leasing brokerage company, revenue
           is recognized for delivery of the transportation/equipment to the end
           user.

      Shipping and Handling Costs

           Shipping and handling costs for the luggage transportation operations
           are charged to costs of goods sold as incurred.

      Advertising Costs

           Advertising costs are charged to operations when incurred.
           Advertising expense was $44,308 and $4,391 for the years ended June
           30, 2002 and 2001, respectively.

      Goodwill

           Goodwill represents the excess of the purchase price of companies
           acquired over the fair market value of their net assets at the date
           of acquisition.

      Property and Equipment

           Property and equipment are stated at cost. Depreciation and
           amortization are provided on a straight-line basis over the estimated
           useful life of the respective assets, ranging from five to ten years.

      Deferred Service Costs

           Deferred service costs are recorded in connection with common stock
           issued to advisors for future services and are amortized over the
           period of the agreement, ranging from one to five years.

      Basic Loss Per Common Share

           Net loss per common share is calculated utilizing the weighted
           average number of common shares outstanding during the period. The
           number of shares used in the computations were 161,689,593 and
           47,488,651 for the years ended June 30, 2002 and 2001, respectively.
           Common stock equivalents and contingently issuable shares have not
           been included in the computation since the effect would be
           anti-dilutive.

      Estimates

           The preparation of financial statements in conformity with generally
           accepted accounting principles requires management to make estimates
           and assumptions that affect the reported amounts of assets and
           liabilities and disclosure of contingent assets and liabilities at
           the date of the financial statements and the reported amounts of
           revenue and expenses during the reporting period. Actual results
           could differ from those estimates.

      Income Taxes

           The Company recognizes deferred tax assets and liabilities based on
           the difference between the financial statements carrying amount and
           the tax basis of assets and liabilities using the effective tax rates
           in the years in which the differences are expected to reverse. A
           valuation allowance related to deferred tax assets is also recorded
           when it is probable that some or all of the deferred tax assets will
           not be realized.






                                                                             F-8
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES, Continued

      Impairment of Long-Lived Assets
           The Company reviews long-lived assets for impairment whenever
           circumstances and situations change such that there is an indication
           that the carrying amounts may not be recovered. At June 30, 2002, the
           Company believes that there has been no impairment of its long-lived
           assets.

       Marketable Securities
           Investments in marketable securities are classified as
           available-for-sale and are recorded at fair value with any unrealized
           holding gains or losses included in unrealized loss on marketable
           securities, which is a component of accumulated other comprehensive
           income (loss) in stockholders' equity.

      Segment Disclosure
           The Company uses the "management approach" model for segment
           reporting. The management approach model is based on the way a
           company's management organizes segments within the company for making
           operating decisions and assessing performance. In 2002, Management
           changed the composition of its segments to reflect the internal
           reorganization after the disposal of its discontinued operations.
           Prior year disclosures have been restated for consistent
           presentation.

           As such, the Company has three major segments for the year ended June
           30, 2002: Logistics and International Shipping,
           Transportation/Equipment Leasing Brokerage and Parent (other).
           Logistics and International Shipping includes Virtual Bellhop, LLC,
           Luggage Express, Worldpost, and Private Postal Center Network.com.
           Transportation/Equipment Leasing Brokerage includes Universal Express
           Capital Corp.

           For the year ended June 30, 2001 all segments other then Logistics
           and International Shipping have been reclassified to discontinued
           operations.

      Comprehensive Income
           The Company has adopted Statement of Financial Accounting Standards
           No. 130 ("SFAS 130") "Reporting Comprehensive Income". Comprehensive
           income is comprised of net income (loss) and all changes to the
           statements of stockholders' equity, except those due to investments
           by stockholders, changes in paid-in capital and distributions.

NOTE 2 - CONCENTRATION OF CREDIT RISK

      The Company places its cash in what it believes to be credit-worthy
      financial institutions. However, cash balances may exceed FDIC insured
      levels at various times during the year.





                                                                             F-9
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3 - LOAN TO OFFICER

      In accordance with the employment contract of the Company's Chief
      Executive Officer, such officer is entitled to secure loans from the
      Company in an amount not to exceed $950,000. The board agreed to forgive
      10% per year (2.5% quarterly) of the outstanding balance of the Company
      loans to such officer, commencing January 2, 2001. These loans bear
      interest at the applicable federal rate, which approximated 6.00% during
      the year ended June 30, 2002. As of June 30, 2002 the amount owed under
      such loan is $878,811. In addition, the Company has accrued unpaid salary
      to such officer aggregating $1,012,400 at June 30, 2002.

NOTE 4 - RELATED PARTY RECEIVABLES

      As of June 30, 2002, the Company has advanced $891,424 to the spouse of
      the Chief Executive Officer, who is also an employee of the Company. The
      repayment terms of such advances have not yet been determined.

NOTE 5 - MARKETABLE INVESTMENT SECURITIES

      Cost and fair value of the Company's investment in available for sale
      equity securities as of June 30, 2002 are as follows:

                                   Gross Unrealized
               Amortized Costs          Loss            Fair Value
               ---------------          ----            ----------

                  $120,000            $(119,400)           $600


NOTE 6 - OTHER RECEIVABLES

      On May 11, 2001 the Company sold all of the assets of its DTTA subsidiary
      partly in exchange for a promissory note of approximately $392,000 payable
      over approximately 33 years. The present value of this note using a 9%
      discount rate is $119,402. Due to the uncertainty of collectability and
      the non-recourse nature of this long-term note the Company has recorded a
      reserve of $111,702, resulting in an unreserved other receivable of
      $7,700, representing approximately 1 year of payments.

NOTE 7 - PROPERTY AND EQUIPMENT

      Property and equipment at June 30, 2002 consists of the following:
           Leasehold improvements                               $      15,811
          Office equipment                                             28,594
          Furniture and fixtures                                       91,647
                                                                      136,052
          Less accumulated depreciation and amortization               47,364
                                                                $      88,688
                                                                 ============


                                                                           F-10
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - DISCONTINUED OPERATIONS

     The following are the components of the loss from discontinued operations
for the year ended June 30,:

                                                              June 30,
                                                  -----------------------------
                                                     2002              2001
          Entertainment - DTTA                  $       -    $        (334,804)
          Shipping - "Skynet" subsidiary                -             (398,994)
                                                $       -    $        (733,798)
                                                  ========   =================

     The following are the components of revenue from discontinued operations
for the year ended June 30,:

                                                             June 30,
                                                --------------------------------
                                                 2002                2001
          Entertainment - DTTA                $         -    $        1,234,282
          Shipping - "Skynet" subsidiary                -             2,856,297
                                              $         -    $        4,090,579
                                                ==========     =================

     For the year ended June 30, 2001 the Company incurred a gain (loss) from
     the disposal of their discontinued operations of Skynet and DTTA of
     $1,684,587 and $($431,595), respectively.

NOTE 9 - OTHER CURRENT ASSETS

     Other current assets as of June 30, 2002 consist of the following:

          Equipment deposit                               $            10,000
          Website design deposit                                       18,591
          Commission advances                                          17,800
                                                          $            46,391
------------------------------------------------------------==================

NOTE 10 - NOTES PAYABLE

     Notes payable at June 30, 2002 consist of the following:

       Note payable, due upon demand, bearing interest
          at rate of 18% per annum                          $           25,000

       Notes payable, due upon demand, bearing interest
          at a rate of 18% per annum                                    46,000
                                                            $           71,000
                                                            ==================

NOTE 11 - BANK LINE OF CREDIT

     The Company has a line of credit under which the bank has agreed to make
     loans up to $70,000 at 1.75% above the prime interest rate. At June 30,
     2002, the Company has a balance of $49,990.







                                                                            F-11
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - LONG-TERM DEBT
<TABLE>
<CAPTION>

     Long-term debt is comprised of the following:

<S>                                                                           <C>
       Installment note arising from settlement agreement due in monthly         $    30,583
       installments of $1,185 including interest through December 2004.
       This note bears interest at 12.5%

---------------------------------------------------------------------------------------------
       Promissory  note to bank payable in equal monthly                             114,831
       installments of $2,167 plus interest through October 2006.  The note
       bears interest at 0% per annum until May 2004, at which time the
       rate will be fixed at a rate 2% over the then prevailing prime rate. The
       note is secured by substantially all the Company's assets


       Loans payable to former owners of Virtual Bellhop, LLC,
payable in monthly installments of $3,333 plus interest at 4%
through May 2005.                                                                     76,359


          Total                                                                      221,773

       Less current maturities                                                        77,266

       Long-Term Debt, Net of Current Maturities                                 $   144,507
                                                                                  -==========
</TABLE>


     Total maturities of long-term debt are as follows:

          Year ended June 30,

               2003                                    $      77,266
               2004                                           74,927
               2005                                           31,229
               2006                                           15,587
               2007                                           16,881
               Thereafter                                      5,883

                                                       $     221,773
                                                         ============

NOTE 13 - CONVERTIBLE DEBENTURE

     The Company issued a $100,000 convertible debenture in 1997. Such debenture
     is still outstanding and bears interest at 18% per annum. Any payment or
     conversion of this debenture is disputed by the Company.






                                                                            F-12
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 - COMMITMENTS AND CONTINGENCIES

     The Company leases certain office space and equipment under operating lease
     agreements with unrelated parties. The base rent under these agreements
     aggregates approximately $12,030 per month. The related leases expire
     between July 2003 and May 2007.

     Lease payment, by year, and in aggregate at June 2002 are as follows:

          Year ended June 30,

               2003                                     $         143,216
               2004                                               109,986
               2005                                               107,486
               2006                                               100,615
               2007                                                73,333
                                                        $         534,636
                                                          ================

      Rent expense charged to operations was $101,283 and $81,805 for the years
      ended June 30, 2002 and 2001, respectively.

      The leases also contain provisions for contingent rental payments based
      upon increases in taxes, insurance and common area maintenance expenses as
      well as renewal options.

      The employment agreement with the Company's Chief Executive Officer
      provides for an annual base salary of $300,000 per annum through 2004. As
      of June 30, 2002 the Company has accrued $1,012,400 of salary due to such
      officer.

      The Company is involved in various lawsuits and claims in the normal
      course of business. The Company believes that the disposition of these
      matters will not have a material adverse effect on the Company's financial
      position.

      On July 5, 2001, the Company was awarded a $389 million judgment by a jury
      in Dade County, Florida against the Company's former investment banker.
      The Company is currently pursuing collection of the judgment. At this
      time, however, no estimate can be made as to the time or amount of the
      collection.

NOTE 15 - INCOME TAXES

      At June 30, 2002 the Company had approximately $29,128,000 of net
      operating loss carry forwards expiring beginning in 2008 through 2022. A
      substantial amount of the carry forwards are subject to annual limitations
      pursuant to provisions contained in the Internal Revenue Code which become
      effective when an "ownership change", such as the ownership change
      effected pursuant to the Plan of Reorganization, occurs. To the extent
      that such net operating losses are not utilized in a particular year, such
      amounts become available to increase the following year's limitations.

      Deferred tax assets in the amount of approximately $11,870,000 (resulting
      from the benefit of the aforementioned net operating losses), have been
      fully offset by a valuation allowance since realization of the benefit of
      the net operating losses is not assured.




                                                                            F-13
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15 - INCOME TAXES, Continued

     Significant components of the deferred tax assets as of June 30, 2002 and
     2001 are as follows:

          Net operating loss carryforward                 $      29,128,000
          Total gross deferred assets                            11,870,000
          Less: valuation allowance                            (11,870,000)
          Net deferred tax assets                         $               -


     The increase in the valuation allowance of $215,000 during the year ended
     2002 was due to the additional allowance provided for the 2002 net
     operating loss.

     The provision for income taxes differ from the amount computed by applying
     the statutory federal income tax rate to income before provision for income
     taxes as follows:

                                                              June 30,
                                                   -----------------------------
                                                        2002            2001
        Benefit computed at the statutory rate   $   1,190,000    $    955,238
        Losses for which no benefit recognized      (1,190,000)       (955,238)
        Benefit recorded                         $       -        $          -

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

NOTE 16 - STOCKHOLDERS' EQUITY

     The Company's class B common shares (of which 3,000,000 shares have been
     authorized) provide for one and one-third votes per share. If the Company's
     current Chief Executive Officer exercises any stock options pursuant to the
     Company's stock option plan, or if the officer receives other shares of
     common stock pursuant to his employment agreement with the Company in lieu
     of stock options, the aggregate number of votes to which the initial
     1,500,000 Class B shares issuable to such officer is entitled shall be
     reduced by one vote for each additional share which is received by the
     officer.

     During the year ended June 30, 2002, the Company issued 139,275,209 shares
     of common stock. Of such shares issued, 3,481,668 shares were issued in
     exchange for advisory services rendered, 13,041,722 shares were issued for
     conversion of loans and interest, 2,136,509 shares were issued to investors
     for cash, and 11,967,528 shares were issued to investors for stock rights.

     During the year ended June 30, 2002, advisory fees were prepaid to
     consultants retained by the Company to provide certain advisory services
     via the issuance of 94,083,160 common shares. The common shares were valued
     at their approximate fair market value on the dates of issuance and are
     being amortized over their respective contract periods.

     On October 16, 2001 9,801,623 shares were issued in the form of an 8% stock
     dividends to stockholders of record on the close of business September 21,
     2001.

     During the year ended June 30, 2002, the Company issued 4,402,999 shares of
     common stock and 940,000 warrants to purchase shares of common stock for
     the acquisition of Virtual Bellhop, Inc.




                                                                            F-14
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16 - STOCKHOLDERS' EQUITY, Continued

     During the year ended June 30, 2001, the Company issued 66,031,850 shares
     of common stock. Of such shares issued, 2,169,782 shares were issued in
     exchange for advisory services rendered, 7,500,000 shares were issued in
     conversion of debentures and accrued interest, 6,160,714 shares were issued
     to investors for cash, 4,495,489 shares were issued to investors for cash
     rights, and 17,000,000 shares were issued to the Company's Chief Executive
     Officer, the value of which is applied against accrued salary payable to
     such officer.

     On August 15, 2000, 997,565 shares were issued in the form of stock
     dividends to stockholders of record on the close of business July 20, 2000.

     During the year ended June 30, 2001, advisory fees were prepaid to
     consultants retained by the Company to provide certain advisory services
     via the issuance of 24,708,300 common shares. The common shares were valued
     at their approximate fair market value on the dates of issuance and being
     amortized over the respective periods. In addition, during the year ended
     June 30, 2001 the Company charged to expense approximately $1,075,000 of
     deferred advisory costs for which services have been permanently
     terminated.

     During the year ended June 30, 2001, the Company exchanged 3,000,000 shares
     of common stock for an interest in a publicly traded Company. The
     investment was originally recorded at a fair value of $120,000. During the
     years ended June 30, 2001 and 2002, the Company recorded unrealized losses
     of $93,000 and $26,400, respectively, on this investment as a component of
     accumulated other comprehensive income (loss) in stockholders' equity.

NOTE 17 - TREASURY STOCK

     The Company has bought an aggregate 50,000 shares from one investor for
     $18,000. Treasury stock is recorded at cost. The Company has a verbal
     agreement with such investor to repurchase an additional 200,000 shares at
     $.60 per share under certain circumstances.

NOTE 18 - STOCK RIGHTS

     Stock rights represent amounts received from investors for their future
     rights to purchase shares of stock of the Company at a discount of 20% to
     30% of the market value of the stock at the date of exercise subject to the
     Company's right of redemption at a premium not to exceed 20% of the face
     amount of the right.

NOTE 19 - STOCK OPTION PLAN

     The Company's "1994 Stock Option Plan" provides for the issuance of up to
     104,167 shares of common stock. The purchase price per share of common
     stock under each option shall not be less than the fair market value of the
     common stock on the date such option is granted. No options have been
     granted under the plan as of June 30, 2002.



                                                                            F-15

<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



NOTE 20 - ACQUISITIONS

     On November 2, 2001 the Company acquired all of the outstanding shares of
     Virtual Bellhop, LLC, a service provider specializing in baggage management
     and transportation services for leisure and business travelers throughout
     North America, for approximately $329,000 which included $30,000 cash,
     4,402,999 shares of the Company's common stock, valued at $192,100, 940,000
     warrants to purchase common stock of the Company, valued at $16,900, notes
     payable to Partners in the amount of $90,000 and incentive packages issued
     to former owners of Virtual Bellhop, LLC. The value of the common shares
     issued was determined on the basis of the fair market value on the date the
     Company was acquired. The value of the warrants was determined by using the
     Black Scholes pricing model with the following weighted average
     assumptions; dividend yield 0%, expected volatility 205%, risk free
     interest rate of 6.11% and expected life of 15 months. The acquisition was
     made due to the Virtual Bellhop's market niche and its synergistic fit with
     the Company. Goodwill of $397,107 was recognized on the acquisition which
     represents the excess of the purchase price over the net assets of Virtual
     Bellhop, LLC at the time of acquisition. The results of operations of
     Virtual Bellhop, LLC are included in the consolidated income statement of
     operations from the acquisition date to June 30, 2002. The following
     represents the condensed balance sheet of Virtual Bellhop, LLC at the
     acquisition date:


 Assets

 Current Assets

      Cash                                            $            17,303

      Receivables                                                   2,903

 Total Current Assets                                              20,206

 Property and Equipment, net                                       20,211

      Other Assets                                                 32,168

 Total Assets                                         $            72,585





 Liabilities and Partners' Deficiency

 Current Liabilities

      Loans payable                                   $            84,951

 Long-term debt, net of current maturities                         55,741

      Total Liabilities                                           140,692

 Partners' Deficiency

      Partners capital                                            470,000

      Accumulated deficit                                       (538,107)

      Total Partners' Deficiency                                 (68,107)

 Total Liabilities and Partners' Deficiency           $            72,585
                                                        ==================




                                                                            F-16
<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20 - ACQUISITIONS, Continued

     On December 7, 2001, the Company acquired all of the outstanding shares of
     Fed Financial Corp., a commercial leasing business in exchange for
     providing start up costs of $101,000 and employment contracts for the
     President and Vice President of that business. The acquisition was made in
     order for the Company to expand into the business leasing sector and to
     provide fleet purchasing services and lease financing capital to its
     existing logistical international shipping subsidiaries. The results of
     operations of Fed Financial Corp. which subsequently changed its name to
     Universal Express Capital Corp are included in the consolidated statement
     of operations from the acquisition date to June 30, 2002.

     The following represents the unaudited proforma results of operations as if
     the business combinations had occurred on July 1, 2000.

                                                      June 30,
                                        -------------------------------------
                                              2002                   2001
          Net Sales                   $       464,017     $          46,780
                                      $    (3,538,560)    $      (3,203,845)
          Net Loss
                                      $          (.02)    $           (.07)
          Net Loss Per Share
                                        -------------------------------------

     The proforma results have been prepared for comparative purposes only and
     are not necessarily indicative of the results of operations that may occur
     in the future or that would have occurred had the acquisition been affected
     on the dates indicated.

NOTE 21 - SEGMENT INFORMATION

<TABLE>
<CAPTION>
     Year ended June 30, 2002:

                                                                  Transportation/
                                              Logistics &            Equipment
                                              International           Leasing            Parent
                                               Shipping              Brokerage          (Other)          Consolidated
        ----------------------------- -------------------------------------------------------------------------------

<S>                                 <C>                    <C>              <C>                <C>
        Revenue                          $        68,389        $     362,810    $         -        $       431,199
        ----------------------------- -------------------------------------------------------------------------------

        Operating Loss                   $       (61,584)       $     (98,642)   $  (3,338,612)     $    (3,498,838)
        ----------------------------- -------------------------------------------------------------------------------


         Year ended June 30, 2001:
                                                                  Transportation/
                                            Logistics &             Equipment
                                           International             Leasing         Parent
                                              Shipping              Brokerage       (Other)           Consolidated
        ------------------------ ----- -----------------------------------------------------------------------------

        Revenue                     $              1,780        $         -     $            -     $         1,780
        ------------------------ ----- -----------------------------------------------------------------------------

        Operating Loss              $             26,392        $         -     $  (3,452,327)     $   (3,478,719)
        ------------------------ ----- -----------------------------------------------------------------------------


</TABLE>

      Assets of the segment groups are not relevant for management of the
      businesses nor for disclosure.


                                                                            F-17

<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



NOTE 22 - FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying amounts reported in the balance sheet for cash, receivables,
     accounts payable, notes payable, convertible debt and accrued expenses
     approximate fair value based on the short-term maturity of these
     instruments.

NOTE 23 - NEW ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board (FASB) issued
     Statement No. 141, "Business Combinations" (FAS 141), which supercedes
     Accounting Principles Board (APB) Opinion No. 16. FAS 141 requires all
     business combinations initiated after June 30, 2001 to be accounted for
     under the purchase method. In addition, FAS 141 established criteria for
     the recognition of intangible assets separately from goodwill. In fiscal
     2002, the Company adopted FAS 141.

     Also, in June 2001, the FASB issued Statement No. 142, "Goodwill and Other
     Intangible Assets," ("FAS 142"). As a result of this new standard, goodwill
     will no longer be amortized, but will be tested annually for impairment
     beginning in fiscal year ending June, 2003. Goodwill impairment testing
     will require that the Company make judgments concerning future cash flows
     and appropriate discount rates. The Company is unable to estimate the
     impact of the adoption of this standard because the transitional impairment
     testing required by FAS 142 has not yet been completed.

     In August 2001, the FASB issued Statement No. 143, "Accounting for Asset
     Retirement Obligations", ("FAS 143"). This standard requires that
     obligations associated with the retirement of tangible long-lived assets be
     recorded as liabilities when those obligations are incurred, with the
     amount of the liability initially measured at fair value. Upon initially
     recognizing a liability for an asset retirement obligation, an entity must
     capitalize the cost by recognizing an increase in the carrying amount of
     the related long-lived asset. Over time, this liability is accreted to its
     present value, and the capitalized cost is depreciated over the useful life
     of the related asset. Upon settlement of the liability, an entity either
     settles the obligation for its recorded amount or incurs a gain or loss
     upon settlement. FAS 143 is effective for financial statements issued for
     fiscal years beginning after June 15, 2002. The Company does not expect
     that the adoption of this statement will have a material impact on the
     Company's results of operations, financial position or cash flows.

     In October 2001, the FASB issued Statement No. 144, "Accounting for the
     Impairment or Disposal of Long-Lived Assets," ("FAS 144"), which supercedes
     Statement No. 12, "Accounting for the Impairment of Long-Lived Assets and
     for Long-Lived Assets to be Disposed of." FAS 144 applies to all long-lived
     assets, including discontinued operations, and consequently amends APB
     opinion No. 30, "Reporting the Results of Operations-Reporting the Effects
     of Disposal of a Segment of a Business, and Extraordinary, Unusual and
     Infrequently Occurring Events and Transactions." Based on Statement No.
     121, FAS 144 develops one accounting model for long-lived assets that are
     to be disposed of by sale, as well as addresses the principal
     implementation issues. FAS 144 requires that long-lived assets that are to
     be disposed of by sale be measured at the lower of book value or fair value
     less cost to sell. Additionally, Statement No. 144 expands the scope of
     discontinued operations to include all components of an entity with
     operations that (1) can be distinguished from the rest of the entity and
     (2) will be eliminated from the ongoing operations of the entity in a
     disposal transaction. The adoption of Statement No. 144 will not have a
     material impact on the Company's results of operations, financial position
     or cash flows.







                                                                            F-18

<PAGE>


                     UNIVERSAL EXPRESS, INC. & SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS





NOTE 24 - SUBSEQUENT EVENTS

     On July 2, 2002 the Company increased the number of authorized shares of
     common stock to 350,000,000.

     During the period of July 1, 2002 through August 2, 2002 the Company
     advanced $20,000 to the spouse of the Company's Chief Executive Officer.

     During the period of July 1, 2002 through August 2, 2002 the Company
     received approximately $228,000 for stock rights for which no shares have
     been issued to date. It is anticipated that these investors will convert
     these rights at $.32 per share as they did in the fiscal 2002.

     Subsequent to the year ended June 30, 2002, the Company issued 13,750,000
     common shares for future advisory and consulting services.
























                                                                            F-19




<PAGE>




                                     ITEM 8

                  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

See Current Report on Form 8-K/A dated October 30, 2001.


                                    PART III

                                     ITEM 9

            MANAGEMENT OF THE COMPANY; COMPLIANCE WITH SECTION 16(A)

A.  DIRECTORS

Pursuant the Company's Bylaws, the authorized number of directors of the Board
of Directors of the Company is five (5), The sole Director of the Company at
present is Richard A. Altomare, whose biographical information is set forth
below.

B.  EXECUTIVE OFFICERS

The following table sets forth certain information concerning the persons who
will serve as Executive Officers of the Company or certain of its subsidiaries.
Each such person shall serve at the pleasure of the Board of Directors of the
Company.


NAME                                    AGE                      POSITION
----                                    ---                      --------

 Richard A. Altomare                     54                  Chairman and CEO

RICHARD A. ALTOMARE. Mr. Altomare, is the Chairman and Chief Executive Officer
of Universal Express (USXP). Universal, with its wholly owned subsidiary the PBC
Network is a leader of the $7 billion private postal industry. Its division,
WorldPost(TM)is engaged in international shipping. Prior to Universal Express,
Mr. Altomare was an investment banker specializing in real estate, bankruptcy
reorganizations and equipment transactions. Mr. Altomare also owned and operated
professional sports teams. He served in the U.S. Marine Corps. and U.S. Army
specializing in communications and intelligence. Mr. Altomare attended Adelphi
and Hofstra University and has been a political candidate for U.S. Congress and
served on numerous corporate Boards.


                                      -16-
<PAGE>




C.  COMPLIANCE WITH SECTION 16(a)

Based on a review of forms submitted to the Company during and with respect to
the Current Period, the Company is not aware of any Director, Officer, or
Beneficial Owner of more than 10% of any class of equity securities of the
Company that failed to file on a timely basis the reports required by Section
16(a) of the Exchange Act of 1934 during the Current Period.


                                     ITEM 10

                COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

A.  COMPENSATION OF EXECUTIVE OFFICERS.

The following table sets forth information, as required by Section 228.402 of
Regulation S-B, 17 C.F.R. Section 228.402, as currently in effect, concerning
the annual and long-term compensation of the Company's Chief Executive Officer
and other individuals acting in a similar capacity for the past three fiscal
years. No other information is included regarding compensation paid to other
Executive Officers during such three year period because no such Executive
Officer earned annual or long-term compensation in excess of $100,000. Except as
set forth in the tables following, no bonus, other annual compensation,
long-term compensation (in the form of restricted stock awards, options, stock
appreciation rights, long-term incentive plans, or otherwise), or other forms of
compensation were paid to the Company's Chief Executive Officer, any other
individuals acting in a similar capacity, or any other Executive Officer of the
Company at any time during such periods as are reflected in the tables (and
accompanying notes) set forth below. Accordingly, as permitted by Item 402 (a)
(5) of Regulation S-B, tables or columns otherwise required have been omitted
from this Registration Statement where there has been no compensation awarded
to, earned by, or paid to any of the named executives required to be reported in
that table or column in any fiscal period covered by that table.






                                      -17-
<PAGE>
<TABLE>
<CAPTION>


                           SUMMARY COMPENSATION TABLE
                                                                           LONG-TERM
                                    ANNUAL COMPENSATION                COMPENSATION AWARDS
                                    -------------------                -------------------

       (a)                  (b)          (c)         (d)             (e)               (f)
 NAME & PRINCIPAL          FISCAL       ANNUAL      ANNUAL        OTHER ANNUAL         # of
    POSITION                YEAR        SALARY       BONUS        COMPENSATION        OPTIONS
    --------                ----        ------       -----        ------------        -------



<S>                        <C>          <C>            <C>             <C>               <C>
Richard A. Altomare        1998         300,000        $0              $0                0
Chairman & CEO             1999         300,000        $0              $0                0
                           2000         300,000        $0              $0                0
                           2001         300,000        $0              $0                0
                           2002         300,000        $0              $0                0

</TABLE>

Mr. Altomare received no cash compensation from the Company during the Company's
Reorganization and since then, though his employment agreement currently
entitles him to an annual base salary of at least $300,000.

It should be further noted that in addition to monies invested in this Company,
Mr. Altomare has absorbed a 2.0 million-dollar loan personally instead of having
the Company at its early stage to be saddled with that liability.




                                      -18-
<PAGE>

<TABLE>
<CAPTION>



                         OPTION GRANTS IN CURRENT PERIOD


                                Individual Grants

------------------------------------------------------------------------------------------------------------------------------------
        (a)                        (b)                        (c)                           (d)                       (e)

                   % of Total Options Granted to
                             Options Granted      Employees in Current Period
       Name                                                                            Exercise Price           Expiration Date
--------------------------- ------------------- --------------------------------- ------------------------- ------------------------
<S>                                   <C>                   <C>                               <C>                       <C>
Richard A. Altomare
  Chairman. & CEO                     0                     0                                 0                         0



                           AGGREGATED OPTION EXERCISES IN CURRENT PERIOD AND FY-END OPTION VALUES


--------------------------- ------------------- --------------------------------- ------------------------- ------------------------
        (a)                        (b)                        (c)                           (d)                       (e)

                                                                                                             value of unexercised
                                                                                                              in-the-money options
                                                                                      # of unexercised                at
                                                                                         options at                FY-end($)
                                                                                         FY-end(#)


                             Shares acquired
                             on Exercise (#)                                           Exercisable/              Exercisable/
       Name                                            Value Realized ($)              Unexercisable             Unexercisable
--------------------------- ------------------- --------------------------------- ------------------------- ------------------------

Richard A. Altomare
 Chairman. & CEO                   0                          0                            0/0                       0/0
</TABLE>


B.         COMPENSATION OF DIRECTORS

In the Company's Current Period, there were no arrangements pursuant to which
any director of the Company was compensated for any service provided as a
Director.




                                      -19-
<PAGE>



C.  EMPLOYMENT CONTRACTS AND RELATED MATTERS

The Company has an employment contract with Mr. Altomare, which currently
provides an annual base salary of $300,000. The employment agreement with Mr.
Altomare provides that in the event Mr. Altomare's employment is terminated at
any time within nine months following a "change of control event", as defined
therein and generally described below, (i) his salary benefits for the remaining
term of the agreement shall be accelerated and (ii) he shall receive shares of
Class A Common Stock equal to 10% of all outstanding shares of Class A and Class
B Common Stock of the Company, assuming all unexercised and outstanding warrants
had been exercised. For purposes of the employment agreement with Mr. Altomare,
a "change of control event" shall be deemed to have occurred in the event of (A)
a merger or consolidation involving the Company in which the Company is not the
surviving corporation, (B) the sale of all or substantially all of the assets of
the Company, or (C) the acquisition by any individual, entity or group not
affiliated with Mr. Altomare directly or indirectly becoming the beneficial
owner of 20% or more of the combined voting power of the then outstanding voting
securities of the Company. Mr. Altomare's employment agreement further grants to
Mr. Altomare the right under the Court-approved 1994 Stock Option Plan to
purchase not less than 500,000 shares of the Company's Class A Common Stock at
the fair market price of the stock as of the Plan Effective Date. The employment
agreement further provides certain restrictive covenants and nondisclosure
obligations upon Mr. Altomare during the term of the agreement.

The board agreed to forgive 10% per year of the outstanding balance of the
Company loans to such officer, commencing January 2, 2001 as long as the officer
continues in the service of the Company. Such loan had a balance of $878,811 as
of June 30, 2002.






                                      -20-
<PAGE>


                                     ITEM 11

                    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

A.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The table below lists each stockholder known to the Company that beneficially
owns as of June 30, 2002 more than five percent of the Class A Common Stock of
the Company. This information is based on 224,076,498 shares of Class A Common
Stock issued and outstanding as of June 30, 2002. For purposes of this section,
it is assumed that all 1.28 million shares of Class B Common Stock, each share
of which is convertible into one share of Class A Common Stock under certain
circumstances as set forth in the Company's Articles of Incorporation, have been
so converted.

NAME AND ADDRESS OF          AMOUNT AND NATURE OF                   % OF
 BENEFICIAL OWNER            BENEFICIAL OWNERSHIP                 COMMON STOCK
--------------------------------------------------------------------------------

Richard A. Altomare
5295 Town Center Rd.
Boca Raton, FL 33486          32,590,173 shares                    14.5%

B.  SECURITY OWNERSHIP OF MANAGEMENT

The table below sets forth information with respect to the number of shares of
the Company's Class A Common Stock that are beneficially owned by each director
and executive officer of the Company and by all directors and offices of the
Company as a group as of June 30, 2002. This information is based on 224.076,498
shares of Class A Common Stock issued and outstanding as of June 30, 2002. For
purposes of this section, it is assumed that all 1.28 million shares of Class B
Common Stock (par value $.005), which are convertible into Class A Common Stock
under certain circumstances as set forth in the Company's Articles of
Incorporation, have been so converted.

NAME AND ADDRESS OF           AMOUNT AND NATURE OF               % OF
 BENEFICIAL OWNER             BENEFICIAL OWNERSHIP            COMMON STOCK
--------------------------------------------------------------------------------

Richard A. Altomare
5295 Town Center Rd.
Boca Raton, FL 33486            32,590,173 shares                14.5%



                                      -21-
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                                     ITEM 12

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Richard A. Altomare, the Company's Chairman and Chief Executive Officer, served
until July, 1993 as advisor and reorganization consultant to the Company during
the Company's Reorganization case. Thereafter, the Reorganization Court and the
Company appointed Mr. Altomare as Chairman and President, a position he has
continually occupied thereafter.

Mr. Altomare received no cash compensation from the Company during its
Reorganization and since then, though his employment agreement currently
entitles him to an annual base salary of at least $300,000.






                                      -22-
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                                     ITEM 13

                        EXHIBITS AND REPORTS ON FORM 8-K


(A)             EXHIBITS

2.1*       Order, dated February 18, 1994. Confirming First Amended Plan of
           Reorganization of Packaging Plus Services, Inc., including confirmed
           Reorganization Plan and other exhibits.

3.1*       Amended and Restated Articles of Incorporation of Packaging Plus
           Services, Inc.

3.2**      Certificate of Amendment to Change the Number of Authorized Shares of
           Stock of Packaging Plus Services, Inc.

3.3**      Certificate of Amendment of the Certificate of Incorporation to
           Change the Name of Packaging Plus Services, Inc. to Universal
           Express, Inc.

3.4*       Amended and Restated By-Laws of Packaging Plus Services, Inc.

4.1*       Specimen Class A Common Stock Certificate.

4.2*       Specimen Class B Common Stock Certificate.

4.3**      Specimen Class A Warrant Certificate.

4.4**      Specimen Class B Warrant Certificate.

10.1*      Employment Agreement of Richard A. Altomare.

10.2*      1994 Stock Option Plan.

21.1**     List of Subsidiaries of Registrant.

* Incorporated herein by reference to the Registrant's Transition Report on Form
10-KSB for the Transition Period from January 1, 1994 through June 30, 1994 (as
filed December 12, 1994)

** Incorporated herein by reference to the Registrant's Annual Report, as
amended, on Form 10-KSB/A for the Annual Period ended June 30, 1999 (as filed
January 20, 2000).


                                      -23-
<PAGE>



(B)        REPORTS ON FORM 8-K  -
           -------------------

      Current report filed on Form 8-K/A dated October 30, 2001.



SIGNATURES:

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company's report on Form 10-KSB has been signed below by the following person on
behalf of the registrant and in the capacities and on the dates indicated.


                                          UNIVERSAL EXPRESS, INC.


Date:  September      , 2002              /S/ RICHARD A. ALTOMARE
                 -----                    -----------------------
                                          Richard A. Altomare, President
                                          and Chairman of the Board

CERTIFICATION

I, Richard Altomare, certify that:

1.    I have reviewed this annual report on Form 10-KSB of Universal
      Express, Inc.;

2.    Base on my knowledge, this annual report does not contain any untrue
      statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect to
      the period covered by this annual report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this annual report, fairly present in all
      material respects the financial condition, results of operations and
      cash flows of the registrant as of, and for, the periods presented in
      this annual report.



Dated: September     , 2002                      /S/ RICHARD A. ALTOMARE
                 -----                           -------------------------------
                                                 Richard A. Altomare, Principal
                                                 Executive Officer and Principal
                                                 Financial Officer




                                      -24-
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