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, 2000 TO JUNE 30, 2001

                         Commission file number 0-18094

                             UNIVERSAL EXPRESS, INC.

                      A Nevada Corporation ID.# 11-2781803

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

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

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

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

                 Class A Common Stock par value $0.005 per share

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

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB
                 --------
State issuer's revenues for the period $4,092,359.



<PAGE>




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  within the
past 60 days: As of September 30, 2001, $8,413,370 (based on 120,191,121) 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 84,851,288 shares of its $.005 par value Class A Common Stock
issued  and  outstanding  as of June 30,  2001 and  1,280,000  shares of Class B
Common Stock.

Total number of sequentially numbered pages in this document:  (19).

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 (USXP), is an integrated  business to business service company
under the direction of its Chairman and Chief Executive Officer,  Mr. Richard A.
Altomare.

The  Company is engaged  primarily  in the  development  of its  Private  Postal
Network.com  ("PPN") and a division of PPN is called the Postal  Business Center
Network ("PBC  Network").  The PBC Network is an  association  of private postal
stores with the goal of  unifying  and  organizing  independent  and  franchised
postal  stores  nationwide.  The Company is also active in acquiring  businesses
that  complement  and improve the  financial  strength of the PBC Network.  This
multi-faceted  association of packaging centers  nationwide is connected through
the World Wide Web with its numerous joint venture partners.

In the  international  shipping arena,  another  division will operate under the
name  WorldPost(TM)  Network.com  and  in  the  business  of  luggage  delivery,
nationally and  internationally  another division will operate under the name of
Luggage Express(TM).

The web site for the  company and its  businesses  is  http://www.usxp.com.  For
Universal Express Executive  Summary,  please call  561-367-6177.  To download a
copy, go to http://www.usxp.com/usxpwebbrochure.pdf

                         The Business of the Corporation

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

Its three principal  divisions include the Postal Business Center Network (PBC),
WorldPost(TM) and Luggage Express(TM).

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

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

                                        3
<PAGE>


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

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

Although the Company sold Skynet,  the Company  believes it retained most of the
benefits  sought by the Company upon its acquisition of Skynet in 1999, in terms
of the  granting of licenses  to the Company of the Skynet  trademark  for North
America,  sale of  territory  rights,  shipping  credits  and low  international
shipping rates for its PBC member stores.

The Company  believes  that the value to the Company of the sale of its interest
in Skynet is approximately $3,000,000 in cash, services and territory rights. In
addition, the Company expects to market its Skynet/Worldpost  territory business
opportunity  throughout  North America.  USXP has received  $700,000 in shipping
service credits to pass on to its postal store members of its trade  association
(pbcnetwork.com).

The  agreement  between  Skynet and the  Company  provides  for cash,  services,
territory  sales  and  an  international  discounted  shipping  service  to  PBC
Network's postal store and consumer customers.

In May, the Company sold its ticket business,  Manhattan Concierge,  for a value
of approximately $450,000,  consisting of cash, an assumption of liabilities and
a long-term  note. The Company  retained the rights to sell Manhattan  Concierge
territories.

The Company's principal divisions:
o        The Postal Business Center Network.com
o        WorldPost(TM)
o        Luggage Express(TM)

                  Private Postal Network.com and WorldPost.com

On May 15, 1999, the name of the Association of Packagers and Carriers, APAC was
changed to the Private Postal  Network.com  (PPN),  with two  divisions,  Postal
Business Center  Network.com (PBC  network.com)  and an  international  shipping
division,  WorldPost  Network.com.  In  future  reports,  the names of these new
entities  will be used to cover and describe the present  functions and programs
of these  networks as well as future  programs and functions of this  electronic
network of  retail,  mail,  parcel,  and  business  centers,  which the  Company
believes  are  positioned  to  provide  goods and  services  needed  to  support
E-commerce,  as well as the international  shipping division,  including support
from WorldPost.


                                       4
<PAGE>


Marketplace
A true  global  economy  has  surfaced  and  grown  over the past  decade.  With
Internet,   Catalog  and  Infomercial  sales  transcending  all  boundaries,  an
inexpensive  and  responsive  final mile  Domestic  and  International  delivery
network coupled with warehouse and shipping  capabilities  has been, the Company
believes, inexpensively created by the Company.


Business
Private postal and business  service  centers form a highly  fragmented  cottage
industry.  The Company believes that this industry  generates over $7 billion in
sales and  presently  consists of more than 20,000  independent  operators.  The
Company  believes  there  is a  market  opportunity  for the  development  of an
association with the goal of unifying and organizing  independent and franchised
postal stores nationwide. PBC Network members are connected to other members and
to the PBC Network Headquarters via the PBC Web Site  (PBCNetwork.com).  The PBC
Web Site is utilized  not only by members but also will be used in the future by
the  general  public.  Only  one  PBC  Network  store  per  Zip  Code  has  been
recommended, thus creating internal quality control standards.

Revenue Sources
Our initial revenues, the Company believes,  will combine WorldPost(TM) delivery
and territory sales along with our other subsidiaries.  Based upon marketing and
branding  monies,  PBC's  strategic  alliances today could include the following
income sources:

International Shipping                      Customized Corrugated
Worldpost.com (SkyNet)                      Cactus Corrugated

Corrugated & Packaging                      ATM Machines
Packaging Technologies                      E-Trade

Lamination and Photo ID's                   Business and Office
                                            Supplies
D&K Laminex                                 PBCNBizSupplies.com

Customized Rubber Stamps                    Parcel Insurance
TheStampMaker.com                           Universal Parcel
                                            Insurance Co.

Equipment Leasing                           CreditCard Processing
Advantage Leasing                           Nova Information
                                            Systems

Promotional Items                           Check Processing
International Promotion Group               Echeck2000.com


                                       5
<PAGE>

Key Machines and Supplies                   Payroll and Tax
                                            Processing
LV Sales                                    PayChex

Discounted Phone Cards                      Video Conferencing
Saratoga Telecom                            Talk Visual


Air Miles Incentive                         Travel and
Program                                     Entertainment
American Airlines                           Reslinx

Moving Supplies                             Shredder Cushioning
                                            Systems
All Boxes Direct                            Pac-Mate

Car Rental
Hertz Rent-A-Car


                                   Competition

The company  believes that the maturation of the PBC Network 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 the
PBC Network to create a nationally  accepted  private  postal  industry that the
American  public will embrace and trust should recreate a viable  industry.  The
Company feels it can convince  through  financial  discounts the independent and
nationwide  franchisors that they must self-regulate for consumer acceptance and
seize this  opportunity to become part of this new  cooperative  partnership and
private postal system.

                               Industry Background

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

The 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.



                                       6
<PAGE>

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

Members of PBC Network 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. Mr. Altomare, a reorganization  specialist and investor, was appointed
CEO and Chairman of Universal  Express in December 1991. He 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 its
carriers.


                          Trade Marks and Service Marks

The Company is the owner of trademarks and service marks for the names Universal
Express(R), PBC(TM), WorldPost(TM), Luggage Express(TM) and Buyer WeCare(TM).

                                    Employees

As of June 30, 2001, the Company  employed 10  individuals.  The Company has not
experienced any work stoppages and considers its relations with its employees to
be excellent.  To facilitate its PBC Network and WorldPost(TM)  expansion plans,
management  expects  to  engage in  significant  hiring  of  management,  sales,
operational and support  personnel  during 2001 and beyond.  The Company's Stock
Option  Plan  provides  for the  issuance  of up to 1.25  million  shares of the
Company's common stock.

                                     ITEM 2

                            DESCRIPTION OF PROPERTIES

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


                                       7
<PAGE>

                                     ITEM 3

                                LEGAL PROCEEDINGS

The Company was awarded a $389 million dollar damage verdict on July 25, 2001 by
a jury in Dade County, Florida, upon which judgment was entered,  against Select
Capital,  Ronald G.  Williams and Walter  Kolker.  We believe that the judgment,
which is non-appealable, is substantially collectible.

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

                                     ITEM 4

                 SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

No meeting of shareholders was held during the year.

                                     PART II

                                     ITEM 5

            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

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

                                                   Bid
           Quarter Ended          Low                           High

              9/30/00            $0.08                          $0.31
              12/31/00           $0.035                         $0.095
              3/31/01            $0.025                         $0.19
              6/30/01            $0.014                         $0.09


                                       8
<PAGE>

As of June 30, 2001, there were over 6,500 holders of record of the Company's
Common Stock.

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

A 4% stock dividend was declared in this fiscal year.



                                     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 PBC Network,  its  multi-faceted  national  private postal  business
centers  nationwide  connected  through  the  World  Wide  Web,  and for  future
acquisitions.

Management  views  this year as a period of growth  based upon its  decision  to
concentrate on core business development through the PBC Network,  WorldPost(TM)
and Luggage Express(TM).

The sale of Skynet and Manhattan Concierge, have permitted the Company to shed a
considerable  amount  of  liabilities,  in  order  to  concentrate  on its  core
businesses and to seek synergistic acquisitions, while retaining the benefits of
territory sales for Skynet and Manhattan Concierge.










                                       9
<PAGE>



Liquidity and Capital Resources

During the twelve-month  period ended June 30, 2001, the Company's cash position
increased from $20,823 to $39,316.  The Company's financing  activities provided
$927,316 while $908,823 was used in its operating and investing activities.

The Company's working capital deficiency for fiscal 2001 was $3,371,000 compared
with $5,745,000 for fiscal 2000.

The Company's net loss for fiscal 2001 was $2,960,000  compared with  $5,760,000
in fiscal 2000.  This  decrease in losses  results  primarily  from the sales of
Skynet and  Manhattan Concierge and the discontinuance  of their losses from the
Company's financial statements.

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

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

Since the Company strongly believes that convertible debentures and stock rights
added to the short selling stock  pressures  that USXP has been  subjected to in
the past few years and,  further,  the Company  believes that the short position
equals or exceeds the total shares of stock issued,  the Company  decided to pay
off all of its  convertible  debentures  and stock  rights  and to  promote  the
corporate  identity at this time as well as to accumulate  the necessary cash to
financially  support  its  acquisition  program for the  development  of Luggage
Express(TM) and WorldPost(TM).

The Company issued an additional  60,091,010 shares during the recent quarter to
repay debt and other corporate matters, including shares for consultants.

The Company has subsequently  cancelled  5,500,000 of the consultant  shares and
has begun  negotiations to re-purchase over 18,000,000 of these same shares with
new capital that the Company is presently negotiating.  On August 22, 2001,  the
Company authorized an additional 100,000,000 shares of common stock.

                                     ITEM 7

                              FINANCIAL STATEMENTS

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



                                       10
<PAGE>


                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS




                                                                           Page

INDEPENDENT AUDITORS' REPORT.........................................        F-1
CONSOLIDATED BALANCE SHEET ..........................................        F-2
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)...........................................       F-3
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY....................       F-4
CONSOLIDATED STATEMENTS OF CASH FLOWS.................................       F-5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............................       F-6


























<PAGE>
INDEPENDENT AUDITORS' REPORT



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


We have  audited  the  accompanying  consolidated  balance  sheet  of  Universal
Express,  Inc. and Subsidiaries as of June 30, 2001 and the related consolidated
statements  of  operations  and  comprehensive   income  (loss),   stockholders'
deficiency  and cash  flows for the years  ended June 30,  2001 and 2000.  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 conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Universal  Express,   Inc.  and  Subsidiaries  as  of  June  30,  2001  and  the
consolidated  results  of their  operations  and their  cash flows for the years
ended June 30, 2001 and 2000 in conformity with accounting  principles generally
accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going  concern.  As discussed in Note 2(a) to the
consolidated financial statements,  the Company incurred losses of approximately
$3,479,000 and $2,894,000  from  continuing  operations for the years ended June
30, 2001 and 2000,  respectively,  and had a working  capital and  stockholders'
deficiency of approximately $3,371,000 and $1,800,000, respectively, at June 30,
2001. These conditions raise  substantial  doubt about the Company's  ability to
continue as a going concern without the raising of additional debt and/or equity
financing to fund operations.  Management's plans in regard to these matters are
described in Note 2(a). The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


                                                /s/ Feldman Sherb & Co., P.C.
                                                   -----------------------------
                                                    Feldman Sherb & Co., P.C.
                                                    Certified Public Accountants
New York, New York
October 11, 2001





                                      F-1
<PAGE>





                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                  JUNE 30, 2001

                                     ASSETS
<TABLE>
<CAPTION>

CURRENT ASSETS:
<S>                                                                                          <C>
     Cash                                                                       $             39,316
     Other receivables                                                                       118,400
                                                                                  -------------------
           Total current assets                                                              157,716
                                                                                  -------------------

PROPERTY AND EQUIPMENT, net                                                                   77,742
                                                                                  -------------------

OTHER ASSETS:

     Loan to officer                                                                         887,064
     Related party receivables                                                               591,424
     Other assets                                                                             41,070
                                                                                  -------------------
           Total other assets                                                              1,519,558
                                                                                  -------------------
                                                                                $          1,755,016
                                                                                  ===================

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
     Accounts payable                                                           $            579,232
     Accrued expenses                                                                      1,446,616
     Payroll taxes payable                                                                   157,986
     Other                                                                                    24,810
     Notes payable                                                                         1,130,757
     Convertible debentures                                                                  189,000
                                                                                 -------------------
           Total current liabilities                                                       3,528,401
                                                                                 -------------------

OTHER LONG-TERM LIABILITIES                                                                   26,141
                                                                                 -------------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY:
     Common stock, $.005 par value; authorized 147,000,000
        shares, 84,851,289  shares issued, 84,811,289 outstanding                            424,257
     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                                                           27,574,250
     Accumulated deficit                                                                 (29,876,745)
     Unrealized loss on marketable securities                                                (93,000)
     Stock rights                                                                            980,227
     Common stock in treasury, at cost, 40,000 shares                                        (12,000)
     Deferred costs related to stock issued for services                                    (802,915)
                                                                                 -------------------
           Total stockholders' deficiency                                                 (1,799,526)
                                                                                 -------------------
                                                                                $          1,755,016
                                                                                 ===================
</TABLE>

                 See notes to consolidated financial statements

                                       F-2

<PAGE>

                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>


                                                                                                 Years Ended June 30,
                                                                                      ------------------------------------------
                                                                                             2001                   2000
                                                                                      -------------------    -------------------

INCOME:
<S>                                                                                            <C>                    <C>
    Merchandise and service sales                                                  $                  -   $             100,696
     Other                                                                                         1,780                  2,106
                                                                                      -------------------    -------------------
                                                                                                   1,780                102,802
                                                                                      -------------------    -------------------

COSTS AND EXPENSES:
     Cost of goods sold                                                                                -                 36,674
     Selling, general and administrative                                                       3,177,822              2,812,609
     Depreciation and amortization                                                                 1,235                 11,008
                                                                                      -------------------    -------------------
                                                                                               3,179,057              2,860,291
                                                                                      -------------------    -------------------

LOSS FROM OPERATIONS                                                                          (3,177,277)            (2,757,489)
     Interest Expense                                                                            301,442                136,399
                                                                                      -------------------    -------------------


LOSS FROM CONTINUING OPERATIONS                                                               (3,478,719)            (2,893,888)
                                                                                      -------------------    -------------------
DISCONTINUED OPERATIONS:
     Loss from discontinued operaions                                                           (733,798)            (2,868,125)
     Net gain from disposal of discontinued operations,
         net of income taxes                                                                   1,252,992                      -
                                                                                      -------------------    -------------------
TOTAL INCOME (LOSS) FROM DISCONTINUED OPERATIONS                                                 519,194             (2,868,125)
                                                                                      -------------------    -------------------
NET LOSS                                                                            $         (2,959,525)  $         (5,762,013)
                                                                                      ===================    ===================
BASIC INCOME (LOSS) PER SHARE
     Continuing operations                                                          $              (0.07)  $              (0.24)
     Loss from discontinued operations                                                             (0.02)                 (0.23)
     Gain from disposal of discontinued operations                                                  0.03                      -
                                                                                      -------------------    -------------------
BASIC LOSS PER COMMON SHARE                                                         $              (0.06)  $              (0.47)
                                                                                      ===================    ===================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                                    47,488,651             12,189,111
                                                                                      ===================    ===================
NET LOSS                                                                            $         (2,959,525)  $         (5,762,013)

OTHER COMPREHENSIVE INCOME (LOSS)
     Unrealized loss on marketable securities                                                    (93,000)                     -
                                                                                      -------------------    -------------------
COMPREHENSIVE INCOME (LOSS)                                                         $         (3,052,525)  $         (5,762,013)
                                                                                      ===================    ===================
</TABLE>



                 See notes to consolidated financial statements.

                                       F-3
<PAGE>
                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>


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


<S>            <C>                                      <C>         <C>           <C>         <C>       <C>           <C>
BALANCE - JULY 1, 1999                                  7,207,923   $  36,039     1,280,000   $  6,400  $ 20,377,905  $   1,770,002

     Sale of common stock                               9,977,152      49,887             -          -     2,935,782       (975,000)

     Common shares issued for deferred services           625,000       3,125             -          -       234,625              -

     Amortization of deferred services                          -           -             -          -             -              -

     Common shares issued for services                    608,001       3,040             -          -       223,261              -

     Common shares issued for interest and penalties      295,480       1,477             -          -        77,817              -

     Common shares issued for conversion of notes         105,883         529             -          -        17,471              -

     Common shares purchased from investor                      -           -             -          -             -              -

     Cumulative translation adjustment                          -           -             -          -             -              -

     Net loss                                                   -           -             -          -             -              -

                                                   ----------------  ----------- -----------   -------- ------------     -----------
BALANCE - JUNE 30, 2000                                18,819,439      94,097     1,280,000      6,400    23,866,861        795,002
                                                   ----------------  ----------- -----------   -------- ------------     -----------

     Sale of common stock                              10,656,203      53,281             -          -       616,494       (174,775)

     Common shares issued for deferred services        24,708,300     123,542             -          -       967,873              -

     Amortization of deferred services                          -           -             -          -             -              -

     Common shares issued for services                  2,169,782      10,849             -          -       484,550              -

     Common shares issued for conversion of
         debentures and interest                        7,500,000      37,500             -          -       805,860              -

     Common shares issued for dividend                    997,565       4,988             -          -        (4,988)             -

     Common shares issued for accrued officers salary  17,000,000      85,000             -          -       732,600              -

     Common shares issued for investment                3,000,000      15,000             -          -       105,000              -

     Cash receive for stock rights                              -           -             -          -             -        360,000

     Unrealized loss on marketable securities                   -           -             -          -             -              -

     Cumulative translation ajustment                           -           -             -          -             -              -

     Net loss                                                   -           -             -          -             -              -

                                                   ---------------- ------------ -------------  ---------- ----------     ----------
BALANCE - JUNE 30, 2001                                84,851,289    $424,257     1,280,000 $     6,400   $27,574,250    $  980,227
                                                   ================ ============ =============  ========== ==========     ==========
</TABLE>

                 See notes to consolidated financial statements
                                       F-4
<PAGE>


                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
                                  (continued)
<TABLE>
<CAPTION>
                                                                                     Unrealized
                                                     Treasury Stock                  Loss on    Cummulative
                                                  ------------------   Accumulated   Marketable Translation  Deferred
                                                   # of Shares Amount  Deficit       Securities Ajustment    Services     Totals
                                                   ----------- ------  ------------  ---------- -----------  ---------  ------------

<S>            <C> <C>                                <C>    <C>      <C>             <C>     <C>           <C>         <C>
BALANCE - JULY 1, 1999                                     - $    -   $(21,155,207) $    -         -       $(1,319,516)$   (284,377)

     Sale of common stock                                         -            -         -         -                  -   2,010,669

     Common shares issued for deferred services            -      -            -         -         -           (237,750)        -

     Amortization of deferred services                     -      -            -         -         -            469,579     469,579

     Common shares issued for services                            -            -         -         -                  -     226,301

     Common shares issued for interest and penalties       -      -            -         -         -                  -      79,294

     Common shares issued for conversion of notes          -      -            -         -         -                  -      18,000

     Common shares purchased from investor            40,000  (12,000)         -         -         -                  -     (12,000)

     Cumulative translation adjustment                     -      -            -         -     182,883                -     182,883

     Net loss                                              -      -     (5,762,013)      -         -                  -  (5,762,013)

                                                     ------- --------- ------------   -------- --------   -------------- -----------
BALANCE - JUNE 30, 2000                               40,000  (12,000) (26,917,220)      -     182,883       (1,087,687) (3,071,664)
                                                     ------- --------- ------------   -------- --------   -------------- -----------

     Sale of common stock                                         -            -         -         -                  -     495,000

     Common shares issued for deferred services            -      -            -         -         -         (1,091,415)          -

     Amortization of deferred services                     -      -            -         -         -          1,376,187   1,376,187

     Common shares issued for services                            -            -         -         -                  -     495,399

     Common shares issued for conversion of
         debentures and interest                           -      -            -         -         -                  -     843,360

     Common shares issued for dividend                     -      -            -         -         -                  -           -

     Common shares issued for accrued officers salary      -      -            -         -         -                  -     817,600

     Common shares issued for investment                   -      -            -         -         -                  -     120,000

     Cash receive for stock rights                         -      -            -         -         -                  -     360,000

     Unrealized loss on marketable securities              -      -            -     (93,000)      -                  -     (93,000)

     Cumulative translation ajustment                      -      -            -         -    (182,883)               -    (182,883)

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

                                                     ------- --------  ------------- -------- --------   --------------- -----------
BALANCE - JUNE 30, 2001                               40,000 $(12,000)$(29,876,745)$ (93,000) $    -     $     (802,915)$(1,799,526)
                                                     ======= ========  ============= ======== ========   =============== ===========
</TABLE>

                 See notes to consolidated financial statements
                                       F-4
<PAGE>
                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                                            June 30,
                                                                                               -----------------------------------
                                                                                                    2001               2000
                                                                                               ----------------   ----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                           <C>                <C>
     Net loss                                                                                 $      (2,959,525) $      (5,762,013)
                                                                                                ----------------   ----------------
     Adjustments to reconcile net loss to net cash used in operating activities:
         Depreciation and amortization                                                                    1,235            124,555
         Common shares issued for services                                                            1,871,586            775,174
         Write down of net fixed assets                                                                       -             75,054
         Gain from disposal of discontinued operations                                               (1,252,992)                 -
     Changes in assets and liabilities:
         Accounts receivable                                                                             69,822             23,162
         Inventory                                                                                            -            100,162
         Other receivables                                                                             (118,400)                 -
         Other assets                                                                                     3,471             81,459
         Accounts payable an accrued expenses                                                           655,075            493,781
         Payroll taxes payable                                                                           32,508              9,564
         Other liabilities                                                                              (73,412)            (6,388)
         Change in net asssets of discontinued operations                                             1,165,138            994,494
                                                                                                ----------------   ----------------
              Total adjustments                                                                       2,354,031          2,671,017
                                                                                                ----------------   ----------------

NET CASH USED IN OPERATING ACTIVITIES                                                                  (605,494)        (3,090,996)
                                                                                                ----------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Loan to officer                                                                                    (17,164)           (86,455)
     Related party receivables                                                                         (241,165)           210,241
     Acquisition of property and equipment                                                              (45,000)           (66,404)
                                                                                                ----------------   ----------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                                                    (303,329)            57,382
                                                                                                ----------------   ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Sale of common stock                                                                               495,000          2,010,669
     Proceeds from issuance of convertible debt                                                               -            810,000
     Proceeds from notes and loans payable                                                                    -                  -
     Net proceeds of notes payable                                                                       72,316            208,604
     Proceeds from stock rights                                                                         360,000                  -
     Purchase of treasury stock                                                                               -            (12,000)
                                                                                                ----------------   ----------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                                               927,316          3,017,273
                                                                                                ----------------   ----------------

NET INCREASE (DECREASE) IN CASH                                                                          18,493            (16,341)

CASH - BEGINNING OF YEAR                                                                                 20,823             37,164
                                                                                                ----------------   ----------------

CASH - END OF YEAR                                                                            $          39,316  $          20,823
                                                                                                ================   ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     Cash paid during the year for interest                                                   $           8,350  $          26,163
                                                                                                ================   ================
</TABLE>

     Non cash investing and financing activities:
     See note 12 for the issuance of common shares for dividends,  stock rights,
     services and conversion of debentures  and accrued  interest and unrealized
     holding loss on marketable securities.

                 See notes to consolidated financial statements.

                                       F-5
<PAGE>
                    UNIVERSAL EXPRESS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       YEARS ENDED JUNE 30, 2001 AND 2000

1.        DESCRIPTION OF THE BUSINESS

          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  service  company  centered  around  the  private  postal and
          international shipping industries. Its principal subsidiary is Private
          Postal Center Network.com and its two divisions Postal Business Center
          Network.com  ("PBC Network") and an international  shipping  division,
          WorldPost Network.com. The PBC Network is an association with the goal
          of unifying and organizing  independent  and franchised  postal stores
          nationwide.  In addition,  USXP owns several other  subsidiaries  with
          little or no activity an seeks new acquisitions  which will complement
          the PBC Network.

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

          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.

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

2.       SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

          a.   Basis of Presentation - The accompanying  consolidated  financial
          statements have been prepared  assuming the Company will continue as a
          going concern. The Company incurred losses from continuing  operations
          of  approximately  $3,479,000  and $2,894,000 for the years ended June
          30,  2001  and  2000,  respectively,  and had a  working  capital  and
          stockholders'  deficiency of approximately  $3,371,000 and $1,800,000,
          respectively,  at June 30, 2001. These  conditions  raise  substantial
          doubt  about the  Company's  ability to  continue  as a going  concern
          without the raising of additional debt and/or equity financing to fund
          operations.  Management  is actively  pursuing new debt and/or  equity
          financing and is  continually  evaluating  the  Company's  operations,
          however, any results of their plans and actions cannot be assured. The
          consolidated  financial statements do not include any adjustments that
          might result from the outcome of this uncertainty.


                                      F-6
<PAGE>



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

          c.   Revenue recognition - Entertainment division sales are recognized
          when the  ticket is  delivered  to the  customer.  Delivery  income is
          recognized upon the completion of the delivery to its destination.

          d.     Cash  and  cash  equivalents  -  The  Company   considers  cash
          equivalents to be those instruments  which have initial  maturities of
          three months or less.

          e.       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.

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

          g.     Basic net loss per common  share - Net loss per common share is
          calculated  utilizing  the weighted  average  number of common  shares
          outstanding  during  the  period.  Contingently  issuable  shares  are
          included in the computation where the effect is dilutive.

          h.     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.

          i.     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.

          j.     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.


                                      F-7
<PAGE>

               k.  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, 2001,  the Company  believes that there
          has been no impairment of its long-lived assets.

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

               m.  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 comprehensive
          income (loss) in stockholders' deficiency.

               n.  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.
          For the year ended June 30, 2001 all segments  other then  merchandise
          and service sales have been reclassified to discontinued operations.

          o.       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.

3.   LOAN TO OFFICER

     In accordance with the employment contract of the Company's Chief Executive
     Officer,  such  officer is entitled to secure  loans from the Company in an
     amount not to exceed  $950,000.  The board  agreed to forgive  10% per year
     (2.5%  quarterly) of the  outstanding  balance of the Company loans to such
     officer,  commencing  January 2, 2001.  These  loans bear  interest  at the
     applicable  federal rate,  which  approximated  6.00% during the year ended
     June 30,  2001.  As of June 30,  2001 the  amount  owed  under such loan is
     $887,064.  In  addition,  the  Company has  accrued  unpaid  salary to such
     officer aggregating $993,000 at June 30, 2001.


4.   RELATED PARTY RECEIVABLES

     As of June 30, 2001 , the Company  has  advanced  $591,424 to the spouse of
     the Chief Executive  Officer,  who is also an employee of the Company.  The
     repayment terms of such advances have not yet been determined.



                                      F-8
<PAGE>



5.   OTHER RECEIVABLES

     On  January  2,  2001,  the  Company  sold  its 51%  interest  in  SkyWorld
     International  Couriers,  Inc. ("SkyNet") partly in exchange for a $200,000
     receivable. As of June 30, 2001 $110,000 of this receivable remains unpaid.

     On May 11, 2001 the Company  sold all of the assets of its DTTA  subsidiary
     partly in exchange for a promissory note of approximately  $392,000 payable
     over  approximately  33 years.  The  present  value of this note using a 9%
     discount rate is $119,402. Due to the uncertainty of collectability and the
     non-recourse  nature of this  long-term  note the  Company  has  recorded a
     reserve of $111,002, resulting in an unreserved other receivable of $8,400,
     representing approximately 1 year of payments.


6.   PROPERTY AND EQUIPMENT

         Property and equipment at June 30, 2001 consists of the following:

            Leasehold improvements                          $            15,811
            Office equipment                                              5,512
            Furniture and fixtures                                       45,000
            Software                                                     14,925
                                                               -----------------
                                                                         81,248
            Less accumulated depreciation and amortization               (3,506)
                                                               -----------------
                                                            $            77,742
                                                               =================
7.   DISCONTINUED OPERATIONS

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

                                                 2001                 2000
                                         -----------------    ------------------
         Entertainment - DTTA                $   (334,804)        $    (235,441)
         Shipping - "Skynet" subsidiary          (398,994)           (2,632,684)
                                         -----------------    ------------------
                                             $   (733,798)         $ (2,868,125)
                                         =================    ==================

                                      F-9
<PAGE>



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

                                              2001                      2000
                                         -------------             -------------
         Entertainment - DTTA            $   1,234,282              $ 1,751,216
         Shipping - " Skynet" subsidiary     2,856,297                4,027,949
                                         -------------             ------------
                                         $   4,090,579              $ 5,779,165
                                         -------------              -----------

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

          At June 30, 2001 the remaining net liabilities, excluding intercompany
          accounts eliminated in consolidation,  of the discontinued  operations
          is $139,424.

8.    NOTES PAYABLE

Notes payable at June 30, 2001 consist of the following:
<TABLE>
<CAPTION>

<S>                                       <C>                                            <C>
Note payable, bearing interest at rate of 10% per annum, due upon demand.                $              250,000

Bank line of credit,  renewable  monthly,  bearing interest at 2% above the prime                       130,000
rate per annum,  due February 15, 2000,  the Company is in negotiation to arrange
a payment plan to cure default.

Note payable, due upon demand, bearing interest at 6% per annum.                                        151,000

Note payable, due upon demand, at a rate of interest of 10% per annum.                                   35,000

Loan payable, due upon demand, bearing interest at the rate of 10% per annum.                            25,941

Notes payable,  individuals,  due upon demand,  bearing interest at a rate of 18%                       127,000
per annum.

Bank loan, currently in default.                                                                         16,183

Bank line of credit, renewable monthly, bearing interest at 9.5% per annum.                              68,633

Note payable, due upon demand, at a rate of interest of 10% per annum.                                   27,000

Convertible  Promissory Note, bearing interest at rate of 18% per annum, due upon                       300,000
demand and  convertible by the holder into common stock equal to fifty percent of
the  average  closing  bid price for the common  stock for the five days prior to
the date of notice of conversion.
                                                                                             -------------------
                                                                                         $            1,130,757
                                                                                             ===================
</TABLE>

                                      F-10
<PAGE>


9.   CONVERTIBLE DEBENTURES

     The  Company  issued  $189,000  of  convertible  debentures  in 1997.  Such
     debentures are still  outstanding and bear interest ranging from 10% to 12%
     per annum.


10.  COMMITMENTS AND CONTINGENCIES


     a.   The Company  operates its facilities  under operating lease agreements
          with unrelated parties. The base rent aggregates  approximately $3,305
          per month. The related leases expire in February 2002 and March 2006.

          Lease payment, by year, and in aggregate at June 30, 2001 are as
          follows:

             Year ended June 30,
              2002                              $               45,256
              2003                                              39,656
              2004                                              39,656
              2005                                              39,656
              2006                                              29,742
                                                      -----------------
                                                $              193,966
                                                      =================


     b.   The employment  agreement with the Company's Chief  Executive  Officer
          provides for an annual base salary of $300,000 per annum through 2004.
          As of June 30, 2001 the Company has accrued  $993,000 of salary due to
          such officer.



                                      F-11
<PAGE>





     c.   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.

11.  INCOME TAXES

     At June 30, 2001 the Company had approximately $28,600,000 of net operating
     loss carry forwards expiring  beginning in 2008 through 2019. 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 limitation.

     Deferred tax debits in the amount of approximately  $11,655,000  (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, 2001 and
     2000 are as follows:

                                             2001                   2000
                                       ------------------     ------------------
     Net operating loss carryforward   $      28,600,000     $       25,000,000
                                        ------------------    ------------------
     Total gross deferred assets              11,655,000             10,188,000
     Less: valuation allowance               (11,655,000)           (10,188,000)
                                        ------------------    ------------------
     Net deferred tax assets           $          -          $           -
                                        ==================    ==================

     The increase in the valuation allowance of $1,467,000 during the year ended
     2001  was  due to the  additional  allowance  provided  for  the  2001  net
     operating loss.

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





                                      F-12

<PAGE>

                                                      Years ended June 30,
                                                --------------------------------
                                                   2001                 2000
                                                ---------------    -------------
         Benefit computed at the statutory rate $  955,238        $   1,959,000

         Losses for which no benefit recognized   (955,238)          (1,959,000)
                                                ---------------    -------------
         Benefit recorded                       $       -         $      -
                                                ===============    =============


12.  STOCKHOLDERS' DEFICIENCY

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

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

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

     During the year ended June 30, 2001, the Company exchanged 3,000,000 shares
     of common stock for an interest in a public  Company.  The  investment  was
     originally recorded at a fair value of $120,000. During the year ended June
     30, 2001, the Company recorded a $93,000 unrealized loss on this investment
     as a component of comprehensive income (loss) in stockholders' deficiency.


                                      F-13

<PAGE>

13.  TREASURY STOCK

     The Company  bought 40,000  shares from one investor for $12,000.  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.


14.  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.


15.  STOCK OPTION PLAN

     The Company's  "1994 Stock Option Plan"  provides for the issuance of up to
     104,167  shares of common  stock.  The  purchase  price per share of common
     stock under each option shall not be less than the fair market value of the
     common  stock on the date such  option is  granted.  No  options  have been
     granted under the plan as of June 30, 2001.

16.  SUBSEQUENT EVENTS

     On August 20, 2001 the Company  announced  a 8% stock  dividend  payable to
     stockholders of record on the close of business, September 21, 2001.

     On July,  26, 2001 the Company  was  awarded a $389  million  judgment by a
     court jury in Dade County, Florida against former investment bankers of the
     Company. The Company is pursuing  collection,  however, no assets have been
     recorded in relation to this judgment.

     During the period July 1, 2001 through  October 11, 2001 the Company issued
     60,091,010 shares of common stock. Of such shares 32,230,760 were issued in
     exchange for future advisory and consulting services, 2,491,000 shares were
     issued to  investors  for  approximately  $203,650,  8,578,571  shares were
     issued in satisfaction of $701,000 of outstanding  debt plus  approximately
     $65,000 of accrued interest and 16,790,679  shares were issued to investors
     for  stock  rights  of  $425,225   plus   accrued   interest  of  $150,000.

                                      F-14
<PAGE>

     Additionally,  the Company  has  received  approximately  $990,000 of stock
     rights for which no shares have been issued to date. On August 22, 2001 the
     Company authorized an additional 100,000,000 shares of common stock.

     On October  10, 2001 the Company  signed an  agreement  to acquire 75% of a
     privately held specialty logistics service provider for cash and stock.























                                      F-15
<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). Directors are scheduled for election at
each annual  meeting.  Directors  shall be elected by the holders of record of a
plurality  of the votes cast at each annual  meeting and shall hold office until
the next succeeding annual meeting.  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              53                           Chairman and CEO

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


                                       12
<PAGE>

C.  COMPLIANCE WITH SECTION 16(a)

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


                                     ITEM 10

                COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

A.  COMPENSATION OF EXECUTIVE OFFICERS.

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



                                       13
<PAGE>




                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                                                Long-Term    Annual Compensation



Compensation Awards
-------------------

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

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


<S>                                    <C>         <C>                   <C>                    <C>                     <C>
Richard A. Altomare                    1997        100,000               $0                     $0                      0
Chairman & CEO                         1998        300,000               $0                     $0                      0
 (1)                                   1999        300,000               $0                     $0                      0
                                       2000        300,000               $0                     $0                      0
                                       2001        300,000               $0                     $0                      0


</TABLE>


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

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





                                       14
<PAGE>






                         OPTION GRANTS IN CURRENT PERIOD


                                Individual Grants
<TABLE>
<CAPTION>

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

                                                 % of Total Options Granted
                              Options Granted     to Employees in Current
            Name                                         Period                Exercise Price        Expiration Date
----------------------------- ---------------- ---------------------------- ---------------------- --------------------

    Richard A. Altomare
<S>                                  <C>                   <C>                        <C>                    <C>
      Chairman. & CEO                0                     0                          0                      0


</TABLE>

<TABLE>
<CAPTION>

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


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

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



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

    Richard A. Altomare
<S>                                  <C>                    <C>                      <C>                   <C>
      Chairman. & CEO                0                      0                        0/0                   0/0

</TABLE>

B.       COMPENSATION OF DIRECTORS

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



                                       15
<PAGE>




C.  EMPLOYMENT CONTRACTS AND RELATED MATTERS

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

On November 1, 2000 the Company's board of directors  authorized the issuance of
15,000,000  shares of the  Company's  common stock to Mr.  Altomare the value of
which is to be applied against accrued salary payable to Mr. Altomare.

In addition, 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
$887,064 as of June 30, 2001.




                                       16
<PAGE>



                                     ITEM 11

                    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

A.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The table below lists each  stockholder  known to the Company that  beneficially
owns as of June 30, 2001 more than five  percent of the Class A Common  Stock of
the Company.  This  information is based on 84,851,288  shares of Class A Common
Stock issued and  outstanding as of June 30, 2001. 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.
<TABLE>
<CAPTION>

 NAME AND ADDRESS OF BENEFICIAL OWNER        AMOUNT AND NATURE OF BENEFICIAL                 % OF
                                                        OWNERSHIP                        COMMON STOCK
---------------------------------------- ---------------------------------------- ---------------------------
<S>            <C>                                  <C>                                     <C>
Richard A. Altomare
5295 Town Center Rd.
Boca Raton, FL 33486                                18,290,173 shares                       21.6%
</TABLE>

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, 2001. This  information is based on 84,851,288
shares of Class A Common Stock issued and  outstanding  as of June 30, 2001. 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.
<TABLE>
<CAPTION>

NAME AND ADDRESS OF BENEFICIAL OWNER   AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP             % OF
                                                           -
                                                                                         COMMON STOCK
-------------------------------------- ------------------------------------------ ---------------------------
<S>            <C>                                 <C>                                      <C>
Richard A. Altomare
5295 Town Center Rd.
Boca Raton, FL 33486                               18,290,173 shares                        21.6%
</TABLE>




                                       17
<PAGE>

                                     ITEM 12

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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






                                       18

<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).



                                       19
<PAGE>


(B)      Reports on Form 8-K  -
         -------------------

     Current report filed on Form 8-K dated January 31, 2001.

     Current report filed on Form 8-K dated June 21, 2001.



SIGNATURES:

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


                                                     UNIVERSAL EXPRESS, INC.


Date:  October 15, 2001                           /s/ Richard A. Altomare
                                                  ------------------------------
                                                  Richard A. Altomare, President
                                                  and Chairman of the Board