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, 2005 TO JUNE 30, 2006

                         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, NY 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: $1,073,486. 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 23, 2006, $89,794,717 (based on 12,647,143,170) 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 12,670,133,343 shares of its $.005 par value Class A Common
Stock issued and outstanding as of June 30, 2006 and 1,280,000 shares of Class B
Common Stock.


Total number of sequentially numbered pages in this document:  (26).


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 network, UniversalPost(TM) Private
Postal Network/Postal Nation.

Its principal businesses include the UniversalPost Private Postal Network/Postal
Nation, UniversalPost(TM) International Courier Service, Virtual Bellhop(R),
Luggage Express(R), MadPackers, Universal Express Capital Corp., Universal Cash
Express and Universal Express Properties.

Its association of independent and franchise nationwide postal stores
(UniversalPost/Postal Nation) continues to evolve into a sophisticated buying
service trade association, and market penetration vehicle.

UniversalPost International Courier Service earns revenues from selling
discounted rates and services to the postal stores.

Luggage Express(TM) will enable consumers to have their baggage picked up at
their home by one of its carriers or a local UniversalPost member store and
delivered to the traveler's destination.

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

MadPackers is a logistics subsidiary for the futuristic form of shipping
personal items for college and university students.

Universal Express Capital Corp. is a full service asset based
transportation/equipment leasing company. Its Universal Cash Express division
provides stored value cards of all types to consumers.

Universal Express Properties concentrates on commercial property acquisitions.

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) evolved into a conglomerate of supportive
companies and divisions centered around its private postal system.

The Company's principal subsidiaries and divisions are: UniversalPost Private
Postal Network/Postal Nation UniversalPost International Courier Service
Universal Express Logistics, Inc.
         Virtual Bellhop(R)
         Luggage Express(R)
         LEAP (Luggage Express Associate Program(TM))
MadPackers(TM), Inc.
Universal Express Capital Corp.
Universal Cash Express
Universal Express Properties

                                   MARKETPLACE

A challenging global economy has grown over the past decade. Internet, catalog
and retail sales continue to mandate an inexpensive and responsive outsourced
final mile Domestic and International delivery network. That innovative and
outsourced final mile network continues to be addressed by Universal Express and
it has undergone visionary expansion in the last decade. Strong strategic
relationships are currently being established with companies and manufacturers,
thus strengthening its long term private postal network, its luggage business
and its logistical courier network. Members of the UniversalPost's private
postal network provide the public with a 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 an additional variety of
personal business services and merchandise.

Luggage Express has begun to separate passengers from suitcases and offer a
safer and more pleasurable travel experience.

These courier companies and private postal centers form a highly fragmented
cottage industry. Universal Express believes that since this industry generates
over $14 billion in sales and presently consists of more than 30,000 independent
operators, there is a market opportunity for the development of an association
with the goal of unifying and organizing the independent and franchised postal
stores and couriers nationwide. These members are electronically connected to
other members via our new website, new sales and products.

Our company believes that an affordable outsourced distribution system is needed
to suit consumers' future needs. Universal Express believes it has positioned
itself to be a contender in the global economy for the next decade with the
development of its outsourced and innovative subsidiaries.


                                        4


<PAGE>



USXP is now positioned as a significant player in the international shipping and
transportation industries. By building its divisions through classic outsourcing
techniques, USXP's future revenue growth will not be offset by increased
overhead.

In just the past few years, USXP has identified more than 9,000 private postal
centers in a network called UniversalPost that produces growing revenue streams
for both its members and USXP. USXP offers its UniversalPost Network members
discounted services from some of the country's largest vendors, as well as
innovative new luggage services that resonate in the world's present
security-conscious travel climate.

USXP's business strategy is far more than the sum of today's parts. The
company's three highly synergistic divisions position the company to create an
entirely new industry paradigm by offering the private postal industry and
consumers value-added services and products, logistical services, equipment
leasing and cost-effective delivery of goods and services worldwide.

UniversalPost(TM) Network, the name for USXP's private postal network, taps the
purchasing power of over 20,000 privately owned and operated postal stores to
create the nation's first truly organized and funded private postal system.

USXP's Web-based CRM software system empowers swift delivery of business
products and services to the network: commercial mail receiving; office products
and supplies; packaging and shipping; copying, imaging, photo finishing and
digital services; home office boutique items; and even concierge services.

Universal Express Logistics, Inc. joins the company's visionary Luggage
Express(TM) service offered through the UniversalPost Network and its
Internet-based Virtual Bellhop(R) luggage pickup and delivery service to free
travelers from the stress of dealing with their luggage as they travel across
the country and around the world. Today's target customer is the upscale
traveler planning extended stays at destination resorts, but the service is
equally appealing to any traveler who prefers not to pay extra airline fees or
struggle with heavy and awkward baggage at either end of their trip. When you
consider that domestic airline luggage is expected to exceed 3 billion pieces
annually, USXP's revenue potential is substantial as acceptance of luggage
transportation services reaches critical mass with further branding and
advertising.

MadPackers(TM) is a service oriented company that is assisting the college world
by moving students and their belongings into their rooms ahead of time; creating
a fluid move in process on the first days of school for students, parents and
administrations across the country through a "door to dorm(TM)" shipping
service. MadPackers takes students' belongings from their home and sends them
directly to their college residences. They also take students' belongings back
home after the semester has ended. They store students' belongings during
winter, summer, and study abroad breaks, as well as ship to study abroad and
spring break destinations. MadPackers provides students, parents, and
administrations an innovative solution to the move in process on and off
campuses across the country.


                                        5


<PAGE>



Universal Express Capital Corp. is a full-service, asset based transportation
and leasing service that provides capital acquisition funding for the business
sector. USXP has established strategic alliances with a number of major
manufacturing firms in the limousine, livery, small fleet, vehicle rental,
delivery truck and van, bus and aircraft industries.

Universal Cash Express, a division of Universal Express Capital, is a leader in
the pre-paid PIN based products industry. Cash Express develops products and
services for companies wishing to expand their current market penetration into
this exciting and growing market segment. Cash Express employs industry experts
that are able to advise these companies on which products are desired by this
market niche. Cash Express is further able to assist our corporate clients by
designing the perfect product for them to accelerate their profit potential.

The Company is also affiliated with The Coalition for luggage Security. The
Coalition is made of companies and individuals with the mission of creating
safer air travel by separating luggage from passengers. The Founder and
President of the Coalition is Richard Altomare, who is also the CEO and Chairman
of the Company. Currently, his white paper entitled, "More Safety, Less Hassle
for American Travelers: A Private Sector Solution" has been circulated in
Congress. You can read more about the Coalition and this white paper at
WWW.LUGGAGESECURITYCOALITION.COM.


       UNIVERSALPOST(TM) NETWORK- THE PRIVATE POSTAL NETWORK/POSTAL NATION

UniversalPost Network/Postal Nation, a private postal network, is an association
formed to create a very much needed partnership between previously unconnected
shipping and packaging store owners. 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. UniversalPost Network provides independent store-owners
with a variety of cost effective services and products to help increase their
profitability, while they are still able to maintain their local or franchised
identities.

                        INDIVIDUAL SERVICES AND PRODUCTS

o Flowers/Gift Baskets
o Corrugated & Packaging
o Moving Supplies
o Customized Corrugated
o Parcel Insurance
o E-Bay Power Selling Franchises
o Certified/Registered E-mail's
o Personalized Postage
o Discounted Supplies


                                        6


<PAGE>



o Joint Promotions
o Fingerprinting
o Credit Union
o Consolidated Shipping rates
o Supplemental Health Insurance
o Print Certified Mail
o On-line Purchasing
o Van Sales
o Visa Debit Card

PostalNation, a Web Site and primary search engine for all postal store members,
vendors and consumers for product and service needs offered through
UniversalPost.

On April 25, 2006, the Company announced that its divisions Universal Post and
PostalNation had agreed with QuikDrop International to offer its technology and
hardware for eBay marketing for customers of postal store members throughout the
United States.

On May 12, 2006, the Company announced a pilot program for a number of
UniversalPost Network/Postal Nation members for the use of R-Post's registered
e-mail secured program.

On August 23, 2006, the Company announced a UniversalPost Network/Postal Nation
program with Enterprise Rent-A-Car.


            UNIVERSALPOST(TM) NETWORK- INTERNATIONAL COURIER SERVICE


UniversalPost Network, the International Courier Service, is an alliance of
independently owned and operated express courier services operating in 268
cities in 120 countries. UniversalPost Network provides global delivery and
services to international firms. This network currently delivers over 650,000
packages per month and is part of the world's largest independently owned
courier network. It is the 5th largest express courier network in the world
behind the integrated United States express carriers such as FedEx, UPS and DHL.

Unlike the major integrators who operate their own aircraft and thus offer rigid
pick up and delivery schedule, UniversalPost Network members offer flexible,
customized International services to meet a client's specific distribution
needs. Instead of operating our own costly fleet, UniversalPost Network offers
express International air courier service and expedited air cargo through
regularly scheduled commercial airlines to transport time-sensitive documents,
parcels, freight and mail.


                                        7


<PAGE>



According to industry estimates, private postal stores alone ship $600,000,000
annually in International packages and without UniversalPost Network are totally
dependent upon their suppliers' shipping. The obvious synergy between
UniversalPost, the International Courier Service and UniversalPost Network, the
private postal network, enhances our unusual position in the shipping service
industry.

Now UniversalPost Network members can offer an in-house solution for
international deliveries at a higher profit margin for themselves and increase
the value of international delivery service to their customers rather than the
more expensive traditional carriers. The UniversalPost Networks' use of the
UniversalPost envelope for their international shipping method instead of
outsourced options strengthens the local postal stores' position as an
international delivery solution.


                   LUGGAGE EXPRESS(TM) AND VIRTUAL BELLHOP(R)

Luggage Express and its premier service, the Virtual Bellhop, facilitate and
manage the movement of baggage door-to-door for leisure and business travelers.

With many years of logistical corporate and entrepreneurial experience in
relevant core businesses, Universal Express has created a powerful logistical
business model driven by multi-channel distribution and multi-market demand. We
have established relationships with travel service providers and distribution
partners.

There are significant market opportunities not limited to the abundance of
checked bags presently being moved each year. Making travel easier and more
enjoyable through luggage free travel is the goal of our two companies.

Whether it be through partners like hotels, airlines, cruise lines, credit card
companies, airline or travel agencies, or simply our neighborhood postal store,
we continue to introduce Americans to luggage-free travel.

With over 1.5 billion suitcases presently being checked by domestic passengers,
our companies offer significant benefits to the airlines. Customer satisfaction,
easier check-in, a secure alternative to curb-side check-in, less congestion in
the departure hall and minimizing departure delays, defines our service. The FAA
expects the number of airline passengers to double, making domestic luggage to
exceed 3 billion suitcases. Luggage Express and Virtual Bellhop are indeed
poised for luggage-free travel.

The Company' Luggage Express is developing an innovative revenue program for the
selling of Luggage Express Associate Program (LEAP) territories to investors and
business entrepreneurs. The development of this program is in its final stages.
The Company has been working with Francorp, Inc. the premier franchising
organization to guide and assist the Company in the franchising program for its
L.E.A.P. (Luggage Express Associate Program) division.

                                        8


<PAGE>


On April 13, 2006, the Company announced that MadPackers, its college shipping
and logistics division, had launched its promotional tour of universities.

On April 25, 2006, the Company announced that Madpackers signed an agreement
with Florida Atlantic University.

On May 16, 2006, the Company announced that Luggage Express had strategically
aligned itself with Preferred Boutique, the newest brand within the Preferred
Hotel Group.

On May 17, 2006, the Company announced that Luggage Express had entered into a
partnership with The Association of Corporate Travel Executives, an association
that provides global and regional leadership of the business travel industry.

On June 21, 2006, the Company announced the signing of a contract to purchase
Global Trucking Services, a provider of luggage delivery services and trucking
services for major airlines serving the Miami, Florida market.

On July 18, 2006, the Company announced the implementation of the new website
for Madpackers (WWW.MADPACKERS.COM).


                         UNIVERSAL EXPRESS CAPITAL CORP.

The Universal Express family of companies has broadened the nature of its core
business by entering the financial services industry via its subsidiary
Universal Express Capital Corp. A full service, asset based transportation and
equipment lessor, Universal Express Capital Corp. 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.


                             UNIVERSAL CASH EXPRESS

Universal Cash Express, a division of Universal Express Capital, is a leader in
the pre-paid PIN based products industry. Cash Express develops products and
services for companies wishing to expand their current market penetration into
this exciting and growing market segment. Cash Express employs industry experts
that are able to advise these companies on which products are desired by this
market niche. Cash Express is further able to assist our corporate clients by
designing the perfect product for them to accelerate their profit potential.





                                        9


<PAGE>



                          UNIVERSAL EXPRESS PROPERTIES

The Company announced its real estate division on November 12, 2004. The
division will concentrate on commercial property acquisitions, commercial loans
and other lending activities, and will seek to be the lead investor in private
placements, limited partnerships and other activities with a goal to develop a
portfolio sufficient to operate the company as a real estate investment trust
(REIT).

On February 27, 2006, the Company announced the signing of a letter of intent to
purchase a South Florida based fuel and wholesale jobber, which servicing 144
gas stations and directly owns 46 of them.

On July 18, 2006, the Company announced the signing of an agreement to purchase
Jacksonville Oil Company, a North Florida oil and gas retailer.

                                   COMPETITION

The company believes that the maturation of the Private Postal Network
(UniversalPost) 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 UniversalPost 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 network.

                               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

                                       10


<PAGE>


Economy. The Company has positioned itself to be that public player in this
lucrative market. Members of UniversalPost 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.

                                   MANAGEMENT

Mr. Richard A. Altomare has been President and CEO of Universal Express since
May 1992, upon appointment by the reorganization court for Packaging Plus
Services (predecessor of Universal Express) during Packaging's reorganization,
completed in May, 1994. 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, commercial vehicles capital
funding and leasing 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(R), USXP(R), Private Postal Network(R), USXP
Capital(R), USXP Cash Express(TM), USXP Logistics(TM), UniversalPost(TM),
Luggage Express(R), Virtual Bellhop(R), MadPackers(TM), USXP Logistics(TM), USXP
PostalNation(TM) Platinum(TM) and USXP Transportation(TM).

                                    EMPLOYEES

As of June 30, 2006, the Company employed 37 individuals. The Company has not
experienced any work stoppages and considers its relations with its employees to
be excellent. To facilitate its UniversalPost Network, USXP Capital, Luggage
Express, MadPackers and UniversalPost International Delivery expansion plans,
management expects to engage in significant hiring of management, sales,
operational and support personnel during 2006 and beyond.


                                     ITEM 2

                            DESCRIPTION OF PROPERTIES

USXP's present corporate headquarters is located at 1230 Avenue of the Americas,
New York, New York, with operating and administrative offices at 5295 Town
Center Road, Boca Raton, Florida.





                                       11


<PAGE>


                                     ITEM 3

                                LEGAL PROCEEDINGS

The Company filed a lawsuit for $168 Million in 2003 against North American
Airlines and its President Mr. McKinnon in New York Supreme Court, Queens
County, New York, for breach of contract and fraud, plus punitive damages. This
suit was predicated upon Mr. McKinnon's actions following the signing of a
contract for Universal to purchase this charter airline, the breach of that
contract in various ways by Mr. McKinnon and Mr. McKinnon's attempts to
frustrate the accomplishment of the proposed acquisition. This case is pending.

In 2005, the Company filed a lawsuit for $269 Million against Capitalliance
Financial Services and individuals and firms associated with Capitalliance in
New York Supreme Court, New York County. This suit was predicated upon a series
of failed transactions proposed to our Company, which were grounded on fraud,
misrepresentation and a series of forged instruments and documents. This case is
pending.

In 2006, the Company brought an action in New York Supreme Court, County of
Albany, for $160 Million against Coach Industries Group and related companies.
This suit is predicated on fraud and breach of contract, with respect to the
violation of a "right of first refusal" our Company had to purchase a courier
management company, Corporate Development Services (formerly, SubContracting
Concepts, Inc.). This case is pending.

On March 2, 2004, the Company brought suit against the SEC in Federal Court in
Florida seeking damages from "naked shorting" of its shares and other matters.
Thereafter, on March 23, 2004, the SEC brought an action in federal court in New
York against certain officers of the Company. These matters are pending. The
Company and its President have been leading opponents of the growing "naked
shorting" scandal for ten years and has joined with many other public companies
in focusing on this national problem in press releases and public forums. It is
significant that the Company has received very substantial jury verdicts and
judgments concerning this problem, as indicated below.

On July 26, 2001, a jury in the Circuit Court of the Eleventh Circuit, Dade
County, Florida awarded the Company a damage verdict after trial, of $87,622,000
compensatory damages, $275,000,000 punitive damages and $26,286,000 pre-judgment
interest, or a total judgment entered of $389 Million, against Select Capital
and various stock manipulators and "naked shorters." This judgment continues to
grow with post-judgment interest. On August 23, 2003, another jury in the
Circuit Court, Dade County, Florida, after trial, awarded another verdict to the
Company in the total amount of $137 Million, against South Beach Financial and
related stock manipulators and "naked shorters". Judgment was entered in favor
of the Company upon this verdict. This judgment continues to grow with
post-judgment interest. These judgments were non-appealable. Collection efforts
on behalf of the Company with respect to these judgments are ongoing and the
Company believes that the judgments are substantially collectable.


                                       12


<PAGE>



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


                                     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
           -------------               ---                    ----
            9/30/05                  $0.0006                 $0.003
            12/31/05                 $0.0003                 $0.001
            3/31/06                  $0.0004                 $0.037
            6/30/06                  $0.004                  $0.014


As of June 30, 2006, there were over 15,000 holders of record of the Company's
Common Stock.

The Transfer Agent and Registrar of the Company's Common Stock is Continental
Stock Transfer & Trust Company.




                                       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 UniversalPostNetwork/Postal Nation, 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 UniversalPost
Network/Postal Nation, Virtual Bellhop(R), Luggage Express(TM), MadPackers(TM),
UniversalPost International Delivery and USXP Capital(TM).

                         LIQUIDITY AND CAPITAL RESOURCES

During the twelve-month period ended June 30, 2006, the Company's financing
activities provided $8,686,856 while $6,532,973 was used in its operating and
investing activities.

The Company's working capital equity for fiscal 2006 was $1,312,543 compared
with a deficiency of $2,200,428 in fiscal 2005.

The Company's net loss for fiscal 2006 was $18,899,026 compared with
$9,985,868 in fiscal 2005. The net loss for fiscal 2006 was greatly increased
due mainly to $12,434,041 of amortized deferred compensation, and the net loss
for fiscal 2005 was largely increased due to mainly to $5,732,540 of amortized
deferred compensation.

Until the UniversalPost Network/Postal Nation, Virtual Bellhop, Luggage Express,
MadPackers, USXP Capital and UniversalPost International Delivery 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.


                                       14


<PAGE>



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.
                              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.













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<PAGE>


                          INDEX TO FINANCIAL STATEMENTS



Independent Auditor's Reports................................................F-2

Consolidated Balance Sheets..................................................F-3

Consolidated Statements of Operations and Comprehensive Income (Loss)........F-4

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

Consolidated Statements of Stockholders' Equity (Deficiency).................F-6

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
































                                                                             F-1


<PAGE>


POLLARD-KELLEY AUDITING SERVICES, INC...........................................
Auditing Services             3250 West Market St, Suite 307, Fairlawn, OH 44333
                                                                    330-864-2265



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors & Stockholders
Universal Express, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Universal
Express, Inc. and Subsidiaries as of June 30, 2006, and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the one year in the period ended June 30, 2006. 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 audits.

We conduct our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 audits provide a
reasonable basis for our opinion.

The Company has generated losses to date. This factor among others raises
considerable doubt the Company will be able to continue as a going concern. The
Company's continuation as a going concern depends upon its ability to generate
sufficient cash flow to conduct its operations and its ability to obtain
additional sources of capital and financing. The accompanying consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company at June 30, 2006,
and the results of its operations and it cash flows for the one year in the
period ended June 30, 2006, in conformity with U.S. generally accepted
accounting standards.

Pollard-Kelley Auditing Services, Inc.

/S/ Pollard-Kelley Auditing Services, Inc.
------------------------------------------
Fairlawn, Ohio
September 22, 2006



                                                                             F-2


<PAGE>


<TABLE>
<CAPTION>


                     UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                    June 30,


                                   ASSETS                                2006
                                                                    ------------
CURRENT ASSETS:
<S>                                                                 <C>
  Cash and Equivalents                                              $  2,102,459
  Accounts Receivable                                                     78,266
  Other Receivables                                                         --
  Other Current Assets                                                   730,856
                                                                    ------------
      Total Current Assets                                             2,911,581
                                                                    ------------

PROPERTY AND EQUIPMENT
Computers and Equipment                                                  373,968
   Less Accumulated Depreciation                                        (167,136)
                                                                    ------------
     Net Property and Equipment                                          206,832
                                                                    ------------

OTHER ASSETS:
  Loan to Officer                                                        722,709
  Related Party Receivables                                              906,000
  Notes Receivable                                                       848,053
  Goodwill                                                               397,107
  Other Assets                                                            29,868
                                                                    ------------
      Total Other Assets                                               2,903,737
                                                                    ------------

                                                                    ------------
                                     Total Assets                   $  6,022,150
                                                                    ============

                         LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts Payable                                                  $    862,708
  Accrued Expenses
       Trade                                                             197,633
       Officers' Salary                                                    2,047
       Interest                                                          285,303
  Current Portion of Long-Term Debt                                       90,829
  Bank Line of Credit                                                     13,018
  Notes Payable                                                           47,500
  Convertible Debentures                                                 100,000
                                                                    ------------
      Total Current Liabilities                                        1,599,038
                                                                    ------------

Long-Term Debt, Net of Current Portion                                      --
                                                                    ------------

                                                                    ------------
                                  Total Liabilities                    1,599,038
                                                                    ------------

STOCKHOLDERS' EQUITY:
  Common Stock, $.005 par value; Authorized 12,950,000,000 Shares
    12,670,133,343 Shares Issued,12,670,093,343 Shares Outstanding    63,350,667
   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                                         24,460,847
   Accumulated  Comprehensive Income (loss)                             (146,459)
   Stock Rights                                                       17,351,424
   Treasury stock, at cost, 40,000 shares                                (14,350)
   Deferred Compenstation                                            (18,847,082)
   Collateral stock                                                   (3,920,000)
   Accumulated Deficit                                               (77,818,335)

                                                                    ------------
      Total Stockholders' Equity                                       4,423,112
                                                                    ------------

                                                                    ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                            $  6,022,150
                                                                    ============

See accompanying notes and accountants' report.
</TABLE>

                                                                             F-3

<PAGE>


<TABLE>
<CAPTION>



                     UNIVERSAL EXPRESS INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                               Year Ended June 30,



                                                            2005                2005
                                                       ---------------    ---------------

<S>                                                    <C>                <C>
   Revenues                                            $     1,073,486    $       931,009
   Cost of Goods Sold                                          830,883            914,404
                                                       ---------------    ---------------
                            Gross Profit                       242,603             16,605
                                                       ---------------    ---------------

OPERATING EXPENSES
   Selling, General and Administrative                       5,445,311          3,973,999
   Amortization of Deferred Compensation                    12,434,041          5,732,540
   Stock Based Compensation                                  1,245,876            348,431
   Depreciation                                                 39,583             35,281
                                                       ---------------    ---------------
                          Total Operating Expenses          19,164,811         10,090,251
                                                       ---------------    ---------------

OPERATING LOSS                                             (18,922,208)       (10,073,646)
                                                       ===============    ===============


   Other Income (Expense)

    Loss Recoupment from Discontinued Operations                27,500              9,545
    Income from Sale of Subsisdary                                --               54,133
   Other Income                                                 25,000               --
   Interest Income                                              43,462             45,266
   Interest Expense                                            (46,021)           (21,166)
                                                       ---------------    ---------------
            Total other income (expense)                        49,941             87,778
                                                       ---------------    ---------------

TAX PROVISIONS                                                    --                 --
                                                       ---------------    ---------------
Net Loss                                                   (18,872,267)        (9,985,868)

COMPREHENSIVE LOSS - Net of tax                                (26,759)              --
                                                       ---------------    ---------------
NET COMPREHENSIVE LOSS                                 $   (18,899,026)   $    (9,985,868)
                                                       ===============    ===============
LOSS PER SHARE
  Net Loss                                             $         (0.00)   $         (0.01)
  Comprehensive Loss                                   $         (0.00)   $          --
  Net Comprehensive Loss                               $         (0.00)   $         (0.01)

Weighted average number of common shares outstanding     5,670,235,320      1,185,567,376
                                                       ===============    ===============

See accompanying notes and accountants' report.
</TABLE>

                                                                             F-4
<PAGE>


<TABLE>
<CAPTION>



                     Universal Express Inc, and Subsidiaries
                      Consolidated Statements of Cash Flows
                               Year Ended June 30


                                                                                                       2006                    2005
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                               <C>             <C>
             Net Loss                                                                             $(18,899,026)   $ (9,985,868)
             Adjustments to reconcile net loss to net cash used by operating activities:
                                   Depreciation and amortization                                        39,583          35,281
                                   Amortization Of Deferred Compensation                            12,434,041       5,732,540
                                   Common shares issued for services                                 1,245,876         348,431
                                   Forgiveness of officer loan                                          74,185          77,345
                                   Issuance of stock for Bonus                                          98,500            --
          Changes in operating assets and liabilities:
                                   (Increase) decrease in accounts receivable                           (9,502)        (24,144)
                                   (Increase) decrease in other current assets                        (523,756)        (63,300)
                                   (Increase) decrease in other receivables                               --             7,700
                                   (Increase) decrease in notes receivables                              6,460        (344,523)
                                   (Increase) decrease in loan to officers                             (43,398)        (45,247)
                                   (Increase) decrease in other assets                                 (15,063)         (3,250)
                                   Increase (decrease) in accounts payable and accrued expenses         72,757          17,280
                                   Increase (decrease) in accrued officers salary                     (933,010)        (43,258)
                                   Increase (decrease) in accrued interest                              27,428          19,241

                                                                                                  ----------------------------
          Net cash provided (used) by operating activities:                                         (6,424,925)     (4,271,772)
                                                                                                  ----------------------------


CASH FLOWS FROM INVESTING ACTIVITIES
          Credit Card Line of Credit                                                                      --            20,315
          Purchase of property and equipment                                                          (108,048)        (71,435)
                                                                                                  ----------------------------
Net cash provided (used) by investing activities                                                      (108,048)        (51,120)

CASH FLOWS FROM FINANCING ACTIVITIES:
           Bank line of credit payments                                                                 (5,034)         (7,075)
          Credit Card Line of Credit payments                                                          (20,316)           --
          Notes payable payments                                                                        (9,400)         (7,500)
          Long Term Debt payments                                                                      (35,814)        (30,431)
          Issuance of common stock for cash                                                          2,311,394         630,000
          Issuance of stock rights for cash                                                          6,375,462       3,657,000
                                                                                                  ----------------------------

Net cash provided by financing activities                                                         $  8,616,292    $  4,241,994
                                                                                                  ----------------------------

Net increase (decrease) in cash and equivalents                                                      2,083,319         (80,898)
CASH - BEGandIequivalents, beginning of period                                                          19,140         100,038

                                                                                                  ----------------------------
CASH - ENDand equivalents, end of period                                                          $  2,102,459    $     19,140
                                                                                                  ============================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
          Interest paid in cash                                                                   $     18,594    $      1,925
                                                                                                  ============================

Non-Cash Financing Activities:
          Issuance of common stock for deferred compensation                                        16,954,635      10,539,059
          Issuance of common stock for loan Repayment                                                     --           400,000
          Issuance of common stock for Conversion of Stock Rights                                       59,000          50,000

See accompanying notes and accountants' report.
</TABLE>

                                                                             F-5
<PAGE>

<TABLE>
<CAPTION>

                                                       UNIVERSAL EXPRESS INC. AND 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
  JUNE 30, 2004         718,265,970    $     3,591,330          1,280,000    $         6,400    $    51,583,289         7,427,962

Sale of
  Common Stock           44,666,667            223,333                                                  406,667

Common Shares
  Issued for
  Deferred Serv       1,234,241,921          6,171,210                                                4,367,849

Amortization of
  Deferred
  Services

Common Shares
  Issued for
  Services               31,587,500            157,938                                                  190,493

Common Shares
  Issued for
  Repayment of
  Loans                  33,000,000            165,000                                                  235,000

Common Shares
  Issued for
  Warrants                     --                 --

Common Shares
  Issued for
  Accrued
  Officers Salary                                 --

Common Shares
  Issued for
  Collateral

Common Shares
  Issue for
  Stock Rights            1,666,666              8,333                                                   41,667           (50,000)

Cash Received
  for Stock
  Rights                                                                                                                3,657,000

Common Shares
  Issued for
  Notes Payable                --                 --

Unrealized Loss
  on Marketable
  Securities


Net Loss


                     ------------------------------------------------------------------------------------------------------------
BALANCE
  JUNE 30, 2005       2,063,428,724         10,317,144          1,280,000              6,400         56,824,965        11,034,962
                     ------------------------------------------------------------------------------------------------------------


Sale of Common
  Stock               3,466,847,620         17,334,238                                              (15,022,844)

Common Shares
  Issued for
  Deferred Serv       6,564,701,500         32,823,508                                              (15,868,872)

Amortization of
  Deferred
  Services

Common Shares
  Issued for
  Services              569,743,000          2,848,715                                               (1,602,839)


Common Shares
  Issued for
  Bonuses                 2,462,500             12,313                                                   86,187


Common Shares
  Issue for
  Stock Rights            2,950,000             14,750                                                   44,250           (59,000)

Cash Received
  for Stock
  Rights                                                                                                                6,375,462



Net Loss

                     ------------------------------------------------------------------------------------------------------------
                     10,606,704,620         53,033,523               --                 --          (32,364,118)        6,316,462
                     ------------------------------------------------------------------------------------------------------------
BALANCE
  JUNE 30, 2006      12,670,133,344    $    63,350,667          1,280,000    $         6,400    $    24,460,847    $   17,351,424
                     ============================================================================================================





                                                                                    OTHER
                                  TREASURY STOCK              ACCUM'TED          COMPREHENSIVE       DEFERRED
                         # OF SHARES         AMOUNT             DEFICIT              INCOME           SERVICES          TOTALS
                         -----------         ------             -------              ------           --------          ------


BALANCE
  JUNE 30, 2004              40,000    $       (14,350)   $   (48,960,200)   $      (119,700)   $    (9,519,969)           74,763

Sale of
  Common Stock                                                                                                            630,000

Common Shares
  Issued for
  Deferred Serv                                                                                     (10,539,059)               (0)

Amortization of
  Deferred
  Services                                                                                            5,732,540         5,732,540

Common Shares
  Issued for
  Services                                                                                                                348,431

Common Shares
  Issued for
  Repayment of
  Loans                                                                                                                   400,000

Common Shares
  Issued for
  Warrants                                                                                                                  --

Common Shares
  Issued for
  Accrued
  Officers Salary                                                                                                           --

Common Shares
  Issued for
  Collateral                                                                                                                    0

Common Shares
  Issue for
  Stock Rights                                                                                                          3,657,000

Cash Received
  for Stock
  Rights                                                                                                                    --

Common Shares
  Issued for
  Notes Payable                                                                                                             --

Unrealized Loss
  on Marketable
  Securities


Net Loss                                                       (9,985,868)                                             (9,985,868)



                     ------------------------------------------------------------------------------------------------------------
BALANCE
  JUNE 30, 2005               40,000           (14,350)       (58,946,068)          (119,700)       (14,326,488)          856,866

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


Sale of Common
  Stock                                                                                                                 2,311,394

Common Shares
  Issued for
  Deferred Serv                                                                                     (16,954,635)            --

Amortization of
  Deferred
  Services                                                                                           12,434,041        12,434,041

Common Shares
  Issued for
  Services                                                                                                              1,245,876


Common Shares
  Issued for
  Bonuses                                                                                                                  98,500


Common Shares
  Issue for
  Stock Rights                                                                                                              --

Cash Received
  for Stock
  Rights                                                                                                                6,375,462



Net Loss                                                                         (18,872,267)           (26,759)      (18,899,026)


                     ------------------------------------------------------------------------------------------------------------
                                --                --          (18,872,267)           (26,759)        (4,520,594)        3,566,247

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

BALANCE
  JUNE 30, 2006               40,000   $       (14,350)   $   (77,818,335)   $      (146,459)   $   (18,847,082)   $    4,423,112

                     ============================================================================================================


See accompanying notes and accountants' report.
</TABLE>

                                                                             F-6


<PAGE>



                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 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. was a full service asset based
     transportation/equipment leasing brokerage company.

     Virtual Bellhop, Inc. and Luggage Express are door to door luggage
     transportation services with established unique strategic relationships
     with well known travel service providers and distribution partners.

     On January 2, 2001, USXP sold its 51% interest in SkyWorld International
     Couriers, Inc. ("SkyNet") in exchange for 400,000, 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 more than $50,000 in credits in any one
     month, unless authorized by SkyNet. Through June 30, 2005, the Company has
     used $20,177 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. 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. The Company did not receive any payments on this note after July
     2001, and filed a lawsuit to collect. This suit was settled after June 30,
     2004, and the Company received an initial payment under the settlement of
     $60,000, and another $55,000 to be paid $1,833 per month for 30 months. As
     of June 30, 2005, the Company has received $61,833 of this amount.

     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".

                                                                             F-7


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES, continued
Going concern
     The accompanying consolidated financial statements have been prepared
     assuming the Company will continue as a going concern. The Company incurred
     losses from operations of $18,872,267 and $9,985,868 for the years ended
     June 30, 2006 and 2005, respectively. This condition raises 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.

Principles of Consolidation
     The accompanying financial statements consolidate the accounts of USXP and
     its wholly-owned subsidiaries. All significant inter-company 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 upon 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 $1,279,662 and $394,658 for the years ended June 30, 2006 and
     2005, 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.
     The Company tests goodwill for impairment on an annual basis, relying on a
     number of factors including operating results, business plans and future
     cash flows. If the carrying value of the goodwill of a reporting unit
     exceeds the fair value of that goodwill, an impairment loss is recognized
     in an amount equal to the excess. At June 30, 2006, the Company believes
     that there has been no impairment of goodwill.



                                                                             F-8


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES, continued
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 six months to ten years.

Stock Based Compensation
     Financial Accounting Statement No. 123 ("SFAS No. 123), Accounting for
     Stock Based Compensation, encourages, but does not require companies to
     record compensation cost for stock-based employee compensation plans at
     fair value. The Company has chosen to continue to account for stock-based
     compensation using the intrinsic method prescribed in Accounting Principles
     Board Opinion No. 25, Accounting for Stock Issued to Employees, and related
     interpretations through June 30, 2006. Accordingly, compensation cost for
     stock options is measured as the excess, if any, of the quoted market price
     of the Company's stock at the date of the grant over the amount an employee
     must pay to acquire the stock. The Company has adopted the "disclosure
     only" alternative described in SFAS 123 and SFAS 148, which require
     pro-forma disclosures of net income and earnings per share as if the fair
     value method of accounting had been applied.
Stock Based Compensation, continued
     As required by Statement No. 123 the Company accounts for stock issued for
     services to non-employees by reference to the fair market value of the
     Company's stock on the date of issuance.

Basic Loss Per Common Share
     Net loss per common share is calculated utilizing the weighted average
     number of common shares outstanding during the period. 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.



                                                                             F-9


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES, continued
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.

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, 2006, 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.

     As such, the Company has two major segments for the year ended June 30,
     2006: 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.

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-10


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - LOAN TO OFFICER

     Prior to the enactment of the Sarbanes-Oxley act, the Company's Chief
     Executive Officer, in accordance with the such officer' employment contract
     was 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%. As of June 30, 2006 the amount owed under such loan
     is $722,709.

NOTE 4 - RELATED PARTY RECEIVABLES

     As of June 30, 2006, the Company has advanced $906,000 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, 2006 are as follows:

               AMORTIZED COSTS    GROSS UNRELATED LOSS      FAIR VALUE
               ---------------    --------------------      ----------
                 $  120,000          $  (119,700)           $     300
                 $  200,000          $   (26,759)           $ 173,241

NOTE 6 -PROPERTY AND EQUIPMENT

     Property and equipment at June 30, 2006 consists of the following:

      Leasehold improvements                                     $  47,028
      Office equipment                                             153,389
      Furniture and fixtures                                        98,490
      Vehicles                                                      75,061
                                                                 ---------
                                                                   373,968
      Less accumulated depreciation and amortization               167,136
                                                                 ---------
                                                                 $ 206,832
                                                                 =========




                                                                            F-11


<PAGE>



                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - OTHER CURRENT ASSETS

     Other current assets as of June 30, 2006 consist of the following:

      Prepaid legal fees                                            $170,000
      Employee advance                                                20,553
      Deposit                                                         92,000
      Escrow deposits                                                275,000
      Investment                                                     173,303
                                                                    --------
                                                                    $730,856
                                                                    ========

     Escrow deposits are earnest monies deposited on three separate real estate
     transactions. All three deposits were returned to the Company subsequent to
     year-end as each transaction failed to go forward.

NOTE 8 - NOTES PAYABLE

     Notes payable at June 30, 2006 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                                 22,500
                                                                  --------
                                                                  $ 47,500
                                                                  ========

NOTE 9 - 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,
     2006, the outstanding balance on the line of credit was $13,018.










                                                                            F-12


<PAGE>



                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10 - LONG-TERM DEBT

     Long-term debt at June 30, 2006, is comprised of the following:

     Promissory note to bank payable in equal monthly installments of $2,167
     plus interest through October 2006. The note bears interest at the rate of
     2% over the then prevailing prime rate.
     The note is secured by substantially all the
     Company's assets.                                                  $  8,831

     Loans payable to former owners of Virtual Bellhop,
     LLC, payable in monthly installments of $3,333 plus
     interest at 4% through May 2005 (in default)                         81,998
                                                                       ---------
         Total                                                            90,829
     Less current maturities                                              90,829
                                                                       ---------
     Long-Term Debt, Net of Current Maturities                         $       0
                                                                       =========
     Total maturities of long-term debt are as follows:

     Year ended June 30,
                  2007                                                 $ 90,829
                  2008                                                        0
                  2009                                                        0
                  2010                                                        0
                  2011                                                        0
                                                                       --------
                                                                       $ 90,829
                                                                       ========

NOTE 11 - 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-13


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - 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 $21,934 per month. The related leases expire
     between July 2006 and 2008.

     The following is a schedule of future minimum rental payments (exclusive of
     common area charges) required under operating leases that have remaining
     non-cancelable lease terms in excess of one year as of June 30, 2005.

     Year ended June 30,
                    2007                                                 506,594
                    2008                                                 353,066
                                                                        --------
                                                                        $859,660
                                                                        ========

     Rent expense charged to operations was $410,660 and $306,438 for the years
     ended June 30, 2006 and 2005, 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 $650,000 per annum.

     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. On
     April 23, 2003, the Company was awarded an additional $137 million judgment
     against two other parties related to this matter. The Company is currently
     pursuing collection of the judgments. At this time, however, no estimate
     can be made as to the time or amount of collection.








                                                                            F-14


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13 - INCOME TAXES

     At June 30, 2006 the Company had approximately $77,000,000 of net operating
     loss carry forwards expiring beginning in 2009 through 2026. 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 $26,000,000 (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.

     Significant components of the deferred tax assets as of June 30, 2006 were
     from net operating losses. The deferred tax assets have been presented in
     the Company's financial statements as follows:

     Total deferred tax assets                                     $ 26,000,000
     Less: valuation allowance                                      (26,000,000)
                                                                   ------------
     Net deferred tax assets                                       $          0
                                                                   ============

     The increase in the valuation allowance of $2,400,000 during the year ended
     2006 was due to the additional allowance provided for the 2006 net
     operating loss.

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

                                                                JUNE 30,
                                                        ----------------------
                                                          2006           2005
                                                          ----           -----
     Benefit computed at the statutory rate           $ 2,400,000    $4,000,000
     Losses for which no benefit recognized            (2,400,000)    4,000,000)
                                                      -----------    ----------
         Benefit recorded                             $         0    $        0
                                                      ===========    ==========




                                                                            F-15


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 - 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, 2006, the Company issued 4,042,003,120
     shares of common stock for the following; 569,743,000 shares were issued in
     exchange for advisory services rendered, 2,950,000 shares were issued to
     investors for stock rights, 3,466,847,620 shares were issued in exchange
     for cash and 2,462,500 shares were issued for bonuses. In addition,
     advisory fees were prepaid to consultants retained by the Company to
     provide certain advisory services via the issuance of 6,564,701,500 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.

NOTE 15 - 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. During the years ended June 30,
     2006 the Company retired 0 shares of treasury stock.

NOTE 16 - 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.










                                                                            F-16


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 - SEGMENT INFORMATION Year ended June 30, 2006:
<TABLE>
<CAPTION>


                                           TRANSPORTATION/
                            LOGISTICS &       EQUIPMENT
                           INTERNATIONAL       LEASING         PARENT
                             SHIPPING         BROKERAGE       (OTHER)       CONSOLIDATED
                             --------         ---------       -------       ------------


<S>                         <C>             <C>             <C>             <C>
REVENUE                     $  1,073,486    $          0    $          0    $  1,073,486

OPERATING LOSS              $ (2,330,282)   $          0    $(16,591,926)   $(18,922,208)

YEAR ENDED JUNE 30, 2005:



                                             TRANSPORTATION/
                             LOGISTICS &        EQUIPMENT
                            INTERNATIONAL       LEASING         PARENT
                               SHIPPING        BROKERAGE       (OTHER)      CONSOLIDATED
                               --------        ---------       -------      ------------

REVENUE                     $    575,652    $    355,357    $          0    $    931,009

OPERATING LOSS              $   (796,434)   $   (531,501)   $ (8,745,711)   $(10,073,646)
</TABLE>


     Assets of the segment groups are not relevant for management of the
     businesses, or for disclosure.

NOTE 18 - 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 19 - LEGAL PROCEEDINGS

     The Company filed a lawsuit in New York against North American Airlines and
     its principal for $168,000,000 plus damages. The suit is pending.

     On July 26, 2001, the Company was awarded a $389 million judgment by a jury
     in Dade County, Florida against the Company's former investment banker. On
     April 23, 2003, the Company was awarded an additional $137 million judgment
     against two other parties related to this matter. The Company is currently
     pursuing collection of the judgments. At this time, however, no estimate
     can be made as to the time or amount of collection.

                                                                            F-17


<PAGE>


                             UNIVERSAL EXPRESS, INC.
                                  June 30, 2006
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19 - LEGAL PROCEEDINGS, continued

     On March 2, 2004, the Company brought an action against the SEC in Federal
     Court in Florida on damages from the "naked shorting" of its shares and
     other matters. Thereafter, on March 23, 2004, the SEC brought an action in
     Federal Court in New York against certain officers of the Company. Both
     suits are pending.

     On October 5, 2005, the Company brought suit against Capitalliance
     Financial Services, LLC, and individuals and firms associated with
     Capitalliance $269,000,000 for fraud, false documents and
     misrepresentation. The suit is pending.

     On January 3, 2006, the Company brought suit against Coach Industries
     Group, and related companies for $160,000,000 for fraud and breach of
     contract. The suit is pending.

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






                                                                            F-18


<PAGE>



                                     ITEM 8

                  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

Nothing to report


                                    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                    58                 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
UniversalPost Network/Postal Nation is a leader of the $7 billion private postal
industry. Its division, the UniversalPost International Courier System 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 five fiscal
years. No other information is included regarding compensation paid to other
Executive Officers during such five 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>



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

  (a)                    (b)        (c)        (d)        (e)            (f)

NAME &                                                    OTHER
PRINCIPAL              FISCAL     ANNUAL      ANNUAL     ANNUAL         # of
POSITION                YEAR      SALARY      BONUS   COMPENSATION     OPTIONS
---------              ------     ------      -----   ------------     -------


Richard A. Altomare     2002     300,000       $0         $0             0
Chairman & CEO          2003     300,000       $0         $0             0
                        2004     500,000       $0         $0             0
                        2005     600,000       $0         $0             0
                        2006     650,000       $0         $0             0


     During the Company's reorganization commencing in 1991 until June 30, 2002,
     Mr. Altomare received no cash compensation under his employment agreement
     approved by the Reorganization Court. Such agreement currently entitles him
     to an annual base salary of at least $650,000. For fiscal year ended June
     30, 2006, Mr. Altomare received $650,000 in cash compensation under his
     employment agreement.








                                       18


<PAGE>


                         OPTION GRANTS IN CURRENT PERIOD


                                Individual Grants

--------------------------------------------------------------------------------
      (a)                  (b)           (c)               (d)         (e)
                                      % of Total
                                     Options Granted
                          Options    to Employees in     Exercise   Expiration
     Name                 Granted     Current Period      Price        Date
--------------------------------------------------------------------------------
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
                                                    # of             unexercised
                                                 unexercised        in-the-money
                                                  options at         options at
                                                   FY-end(#)          FY-end($)


                          Shares
                       acquired on     Value         Exercisable/   Exercisable/
    Name               Exercise (#)  Realized ($)   Unexercisable  Unexercisable
--------------------------------------------------------------------------------
Richard A. Altomare
  Chairman. & CEO          0            0                0/0           0/0


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 that was approved by
the Reorganization Court as part of the Company's Reorganization Plan, which
currently provides an annual base salary of $650,000. 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. 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 $722,709 as
of June 30, 2006.


                                     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, 2006 more than five percent of the Class A Common Stock of
the Company. This information is based on 12,670,133,343 shares of Class A
Common Stock issued and outstanding as of June 30, 2006. 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
 BENEFICIAL OWNER                OF BENEFICIAL OWNERSHIP          COMMON STOCK
--------------------------------------------------------------------------------
      None


                                       20


<PAGE>



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, 2006. This information is based on
12,670,133,343 shares of Class A Common Stock issued and outstanding as of June
30, 2006. 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             22,990,173 shares                  .0018%


                                     ITEM 12

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Richard A. Altomare, the Company's Chairman and Chief Executive Officer, served
from 1991 until May 11, 1994 as advisor and reorganization consultant to the
Company and the Reorganization Court during the Company's Reorganization case.
The Reorganization Court and the Company appointed Mr. Altomare as Chairman and
President through a long- term employment agreement, approved by the
Reorganization Court as part of the Company's Reorganization Plan, a position he
has continually occupied thereafter.

During the Company's reorganization commencing in 1991 until June 30, 2002, Mr.
Altomare received no cash compensation under his employment agreement approved
by the Reorganization Court. Such agreement currently entitles him to an annual
base salary of at least $650,000. For fiscal year ended June 30, 2006, Mr.
Altomare received $650,000 in cash compensation under his employment agreement.

Mr. Altomare's outstanding loan balance under his employment agreement as of
June 30, 2006 is $710,709.

As of June 30, 2006, The Company has advanced $906,000 to the spouse of the
Chief Executive Officer, who is also an employee of the Company.




                                       21


<PAGE>


                                     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).

(B) REPORTS ON FORM 8-K -

      None


                                       22


<PAGE>



                                    ITEM 14
                     Principal Accountant Fees and Services

The Company paid or accrued the following fees in each of the prior two fiscal
years to it's principal accountants, 2006 Pollard-Kelly Auditing Services, Inc.,
Durland & Company, CPA's, P.A. of Palm Beach, Florida and 2005 - Durland &
Company, CPA's, P. A. of Palm Beach, Florida.:

                                         Year ended    Year ended
                                          June 30,       June 30,
                                           2006           2005
                                         ------------------------
1  Audit fees                            $75,500        $71,000
2  Audit-related fees                       --             --
3  Tax fees                                 --             --
4  All other fees                           --             --
                                         -------        -------
   Totals                                $75,000        $71,000
                                         -------        -------

The Company has not designated a formal audit committee. However, as defined in
Sarbanes-Oxley Act of 2002, the entire Board of Directors (Board), in the
absence of a formally appointed committee, is, by definition, the Company's
audit committee.

In discharging its oversight responsibility as to the audit process, commencing
with the engagement, the Board obtained from it's independent auditors a formal
written statement describing all relationships between the auditors and the
Company that might bear on the auditors' independence as required by
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees." The Board discussed with the auditors any relationships that
may impact their objectivity and independence, including fees for non-audit
services, and satisfied itself as to the auditors' independence. The Board also
discussed with management and the independent auditors the quality and adequacy
of the Company's internal controls. The Board reviewed with the independent
auditors their management letter on internal controls, if one was issued by the
Company's auditors.

The Board discussed and reviewed with the independent auditors all matters
required to be discussed by auditing standards generally accepted in the United
States of America, including those described in Statement on Auditing Standards
No. 61, as amended, "Communication with Audit Committees".

The Board reviewed the audited financial statements of the Company as of and for
the years ended June 30, 2006 and 2005 with management and its independent
auditors. Management has the sole ultimate responsibility for the preparation of
the Company's financial statements and the respective independent auditors have
the responsibility for their examination of those statements.


                                       23


<PAGE>


Based on the above-mentioned review and discussions with the respective
independent auditors and management, the Board of Directors approved the
Company's audited financial statements and recommended that they be included in
its Annual Report on Form 10-KSB for the year ended June 30, 2006, for filing
with the Securities and Exchange Commission.

The Company's principal accountants for the year ended June 30, 2006,
Pollard-Kelley Auditing Services, Inc. & Durland & Company CPA's P.A. and for
the year ended June 30, 2005, Durland & Company, CPA's P.A., did not engage any
other persons or firms other than the respective principal accountant's
full-time, permanent employees.


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 28, 2006                  /S/ RICHARD A. ALTOMARE
                                           -----------------------
                                           Richard A. Altomare, President
                                           and Chairman of the Board