UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB



(Mark One)[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended: March 31, 2007Or[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ____________ to _____________Commission File Number: 333-137595PET EXPRESS SUPPLY, INC.(Exact name of registrant as specified in its charter)Nevada20-3768799(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)5219 S. Pittsburg St., Spokane, WA99223(Address of principal executive offices)(Zip Code)(509) 990-2630(Registrant's telephone number, including area code)(Former name, former address and former fiscal year, if changed since last report)


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]   No [  ]



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [  ]   No [X]



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [  ]   No [  ]



APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of May 10, 2007:

5,455,000







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PET EXPRESS SUPPLY, INC.

(A Development Stage Company)





Table of Contents





PagePART I  FINANCIAL INFORMATION3Unaudited Financial Statements3Balance Sheet4Statements of Operations5Statements of Cash Flows6Notes7Management's Discussion and Plan of Operation11Controls and Procedures13PART II  OTHER INFORMATION14Unregistered Sales of Equity Securities14Exhibits and Reports on Form 8-K15SIGNATURES16


















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PART I  FINANCIAL INFORMATION



Unaudited Financial Statements



The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission").  While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  For further information, refer to the financial statements and footnotes thereto, which are included in the Company's Annual Report on Form 10-KSB, previously filed with the Commission on March 27, 2007.



















































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Pet Express Supply, Inc.

(a Development Stage Company)

Balance Sheet





March 31,2007AssetsCurrent assets:Cash$  207Total current assets207Fixed assets, net1,126$  1,333Liabilities and Stockholders DeficitCurrent liabilities:Accounts payable$  1,760Accrued interest490Note payable, net of discount7,668Total current liabilities9,918Stockholders deficitCommon stock, $0.001 par value, 100,000,000 sharesauthorized, 5,055,000 shares issued and outstanding5,055Additional paid-in capital9,856(Deficit) accumulated during development stage(23,496)(8,585)$  1,333




















The accompanying notes are an integral part of these financial statements.





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Pet Express Supply, Inc.

(a Development Stage Company)

Statements of Operations





Three Months EndedSeptember 11, 2003March 31,(Inception) to20072006March 31, 2007Revenue$  -$  -$  -Expenses:General and administrative expenses3,85672115,553General and administrative expenses  related party--5,000Depreciation expense1426573Total expenses
	3,998
	727
	21,126Operating Loss(3,998)(727)(21,126)Other expenses:Interest expense1,041-2,370Total other expenses
	1,041
	-
	2,370Loss from continuing operations before income taxes(5,039)(727)(23,496)Provision for income taxes---Net (loss)
	$  (5,039)
	$  (727)
	$  (23,496)Weighted average number ofcommon shares outstanding  basic and fully diluted5,055,0005,023,077Net (loss) per share  basic and fully diluted
	$  (0.00)
	$  (0.00)




















The accompanying notes are an integral part of these financial statements.





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Pet Express Supply, Inc.

(a Development Stage Company)

Statements of Cash Flows





Three Months EndedSeptember 11, 2003March 31,(Inception) to20072006March 31, 2007Cash flows from operating activitiesNet (loss)$(5,039)$(727)$(23,496)Adjustments to reconcile net (loss) tonet cash (used) by operating activities:Shares issued for services  related party--5,000Amortization of warrants issued for financing costs829-1,879Depreciation1426573Changes in operating assets and liabilities:Increase (decrease) in accounts payable(268)(2,000)1,760Increase in accrued interest212-490Net cash (used) by operating activities
	(4,124)
	(2,721)
	(13,794)Cash flows from investing activitiesPurchase of fixed assets-(1,699)(1,699)Net cash provided by investing activities
	-
	(1,699)
	(1,699)Cash flows from financing activitiesIncrease in note payable--10,000Donated capital--200Issuances of common stock-7,5005,500Net cash provided by financing activities
	-
	7,500
	15,700Net (decrease) increase in cash(4,124)3,080207Cash  beginning4,331--Cash  ending
	$207
	$3,080
	$207Supplemental disclosures:Interest paid$-$-$-Income taxes paid
	$-
	$-
	$-Non-cash transactions:Shares issued for services  related party$-$-$5,000Number of shares issued for services
	-
	-
	5,000,000Amortization of warrants issued for financing costs$829$-$1,879Number of warrants issued for financing costs
	-
	-
	350,000










The accompanying notes are an integral part of these financial statements.



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Pet Express Supply, Inc.

(a Development Stage Company)

Notes



Note 1 - Basis of presentation



The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.



These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein.  It is suggested that these consolidated interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2006 and notes thereto included in the Company's annual report on Form 10-KSB.  The Company follows the same accounting policies in the preparation of interim reports.



Results of operations for the interim periods are not indicative of annual results.



Note 2 - History and organization of the company



The Company was organized September 11, 2003 (Date of Inception) under the laws of the State of Nevada, as GPP Diversified, Inc.  The business of the Company is to sell pet products via the Internet.  The Company has no operations and in accordance with SFAS #7, the Company is considered a development stage company.



The Company was initially authorized to issue 25,000,000 shares of its no par value common stock.  On November 9, 2005, the Company amended its articles of incorporation to increase its authorized capital to 100,000,000 shares with a par value of $0.001.  Concurrently, the Company changed its name from GPP Diversifed, Inc. to Pet Express Supply, Inc.



Note 3 - Going concern



The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As shown in the accompanying financial statements, the Company has incurred a net loss of ($23,496) for the period from September 11, 2003 (inception) to March 31, 2007, and had no sales.  The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities.



The Company is currently conducting an offering of its equity securities to obtain operating capital.  In the event additional capital is required or if the offering is unsuccessful, the President of the Company has agreed to provide funds as a loan over the next twelve-month period, as may be required.  However, the Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing.  There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.



The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.



These conditions raise substantial doubt about the Company's ability to continue as a going concern.  These financial statements do not include any adjustments that might arise from this uncertainty.





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Pet Express Supply, Inc.

(a Development Stage Company)

Notes



Note 4  Fixed assets



Fixed assets consisted of the following:



March 31,2007
	2006Computer equipment$     1,699$     1,699Accumulated depreciation(573)(6)$     1,126
	
	$     1,693




During the three month periods ended March 31, 2007 and 2006, the Company recorded depreciation expense of $142 and $6, respectively.



Note 5  Debt and interest expense



On August 23, 2006, the Company conducted a private offering of debt securities, whereby it secured up to $17,500 in bridge loan financing from one non-affiliated entity, whereby the note holder agreed to finance the Company in increments of $2,500, as needed.  To date, the note holder has loaned the Company $10,000.  The aggregate principal amount and interest accrued thereupon is due December 31, 2007.  The note bears an interest rate of 10%, calculated annually, and contains no prepayment penalty.  As of March 31, 2007, the Company had accrued interest of $768 related to the note payable.



In connection with the debt offering, the note-holder was issued warrants to purchase shares of the Companys par value common stock.  Resultantly, a discount of $4,145 was attributed to the value of the note, which amount is being amortized over a period of approximately 16 months.  As of March 31, 2007, a total of $1,879 has been amortized and recorded as interest expense related to the warrants.  See note 7 for additional discussion regarding the issuance of warrants.



Interest expense totaled $1,041 and $0 for the three months ended March 31, 2007 and 2006, respectively.



Note 6  Stockholders equity



The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock.



On September 11, 2003, the Company issued 5,000,000 shares of its par value common stock as founders shares to an officer and director in exchange for services rendered in the amount of $5,000.



On September 11, 2003, the sole officer and director of the Company paid for expenses on our behalf in the amount of $200.  The entire amount is considered donated capital and recorded as additional paid-in capital.



On March 3, 2006, the Company conducted a private placement, whereby it issued 75,000 shares of its par value common stock for cash in the amount of $7,500.



On April 3, 2006, the Company rescinded 20,000 shares of common stock issued in the private offering and returned the cash investment of two shareholders, totaling $2,000.



As of March 31, 2007, there have been no other issuances of common stock.



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Pet Express Supply, Inc.

(a Development Stage Company)

Notes



Note 7  Warrants and options



As of January 1, 2006, there were no warrants outstanding.



On August 23, 2006, the Company issued warrants to purchase shares of the Companys par value common stock to one non-affiliated entity in conjunction with a bridge loan agreement.  The warrant holder was granted the right to purchase 350,000 shares of common stock of the Company for an aggregate purchase price of $38,500 or $0.11 a share.  The aggregate fair value of such warrants totaled $35,000 based on the Black Schoeles Merton pricing model using the following estimates: 6% risk free rate, 100% volatility and expected life of the warrants of approximately 5 years.



The following is a summary of the status of all of the Companys stock warrants as of March 31, 2007 and 2006 and changes during the three months ended on those dates:



Number
`Of Shares`
	Weighted-Average
`Exercise Price`Outstanding at December 31, 20050
	$ 0.00Granted0$ 0.00Exercised0
	$ 0.00Cancelled0
	$ 0.00Outstanding at March 31, 20060
	$ 0.00Granted350,000$ 0.11Exercised0
	$ 0.00Cancelled0
	$ 0.00Outstanding at December 31, 2006350,000
	$ 0.11Granted0$ 0.00Exercised0
	$ 0.00Cancelled0$ 0.00Outstanding at March 31, 2007
	350,000
	
	$ 0.11Options exercisable at March 31, 20060$ 0.00Options exercisable at March 31, 2007
	350,000
	
	$ 0.11




The following tables summarize information about stock warrants outstanding and exercisable at March 31, 2007:



STOCK WARRANTS OUTSTANDINGExercise PriceNumber of
`Shares
Outstanding`
	Weighted-Average
`Remaining
Contractual
Life in Years`
	Weighted-
`Average
Exercise Price`$ 0.11350,000
	1.3
	$ 0.11350,000
	
	1.3
	
	$ 0.11




STOCK WARRANTS EXERCISABLEExercise PriceNumber of
`Shares
Exercisable`
	Weighted-
`Average
Exercise Price`$ 0.11350,000
	$ 0.11350,000
	
	$ 0.11






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Pet Express Supply, Inc.

(a Development Stage Company)

Notes





Note 8 - Related party transactions



The Company issued 5,000,000 shares of its no par value common stock as founders shares to an officer and director in exchange for services rendered in the amount of $5,000.



A shareholder, officer and director of the Company paid for expenses of the Company totaling $200.  This amount has been donated to the Company, is not expected to be repaid and is considered additional paid-in capital.



The Company does not lease or rent any property.  Office services are provided without charge by an officer and director of the Company.  Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein.  The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities.  If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests.  The Company has not formulated a policy for the resolution of such conflicts.



Note 9 - Subsequent Events



On September 26, 2006, the Company filed a Registration Statement on Form SB-2 (SEC File Number 333-137595) to register up to 1,000,000 shares of common stock at a price of $0.10 per share.  The Securities and Exchange Commission deemed the Registration Statement effective on October 23, 2006.  On May 8, 2007, the Company sold 400,000 shares of common stock, for total cash proceeds of $40,000.







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Management's Discussion and Plan of Operation



Forward-Looking Statements



This Quarterly Report contains forward-looking statements about Pet Express Supply, Inc.s business, financial condition and prospects that reflect managements assumptions and beliefs based on information currently available.  We can give no assurance that the expectations indicated by such forward-looking statements will be realized.  If any of our managements assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize,
Pet Express Supplys actual results may differ materially from those indicated by the forward-looking statements.



The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.



There may be other risks and circumstances that management may be unable to predict.  When used in this Quarterly Report, words such as,  "believes,"  "expects," "intends,"  "plans,"  "anticipates,"  "estimates"and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.



Overview



Pet Express Supply, Inc. was incorporated in Nevada on September 11, 2003, under the name GPP Diversified, Inc.  Subsequently, on November 9, 2005, we changed our name to Pet Express Supply, Inc.  Our efforts have focused primarily on the implementation of our plan to sell pet supplies via the Internet to discriminating feline and canine owners seeking unique products not typically found in the larger pet superstores.  We seek to offer a narrow selection of products from both small, specialty manufacturers, as well as larger, established companies.  Our goal is to offer a variety of unique items alongside well-known popular products.



We have established our presence on the Internet at www.petexpresssupply.com, which serves as our base of operations and the sole method through which we will realize sales.  The site is designed to be our primary store-front, through which we will market, sell and distribute all merchandise.  During the quarter ended March 31, 2007, we did not have any saleable inventory.  Subsequently, we purchased inventory of $879, which we expect to sell to generate revenues during the second quarter of 2007, which includes the following items:



|Microsuede Bolster Beds              
|-------------------------------------
|Peabody Premium Dog Pillows          
|Indoor/Outdoor Dog Beds              
|Midwest Bay Isle Crates              
|Midwest Ultima Crates                
|Blue Dog Bakery Assorted Biscuits    
|Solid Gold Tiny Tots Dog Treats      
|Flavored Cow Ears                    
|Greenies                             
|Stuff N Paste                       
|Groomaster Brushes                   
|Allercaine Sprays                    
|Lipiderm Liquid Supplements          
|Arthramine Advanced Supplements      
|Natures Miracle Stain & Odor Remover
|Flavored Tennis Balls                
|Vinyl Hedgehog Balls                 
|Dental-Flex Bones                    
|Bouncing Kong Balls                  
|Hexagon Collars                      
|Step-in Harness                      



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Our management does not expect to incur research and development costs.



We do not have any off-balance sheet arrangements.



We currently do not own any significant plant or equipment that we would seek to sell in the near future.



We have not paid for expenses on behalf of our directors.  Additionally, we believe that this fact shall not materially change.



We currently do not have any material contracts and or affiliations with third parties.



Managements Discussion and Plan of Operation



From the period since our inception on September 11, 2003 to March 31, 2007, we did not generate any revenues.  Our singular goal is currently to execute our business plan and establish a base of operations.  To that end, we spent a total of $3,998 during the three month period ended March 31, 2007, consisting of $142 in depreciation expense on our computer equipment and $3,856 in general and administrative expenses.  General and administrative expenses mainly consist of office expenditures and accounting and legal fees.  In the year ago period ended March 31, 2006, our total operating expenses were $727, consisting on $6 in depreciation expense and $721 in general and administrative expenses.  Our management believes the 450% increase in total operating expenses year-over-year can be attributed to the initialization of our business objectives during the quarter just ended.  Aggregate operating expenses from our inception through March 31, 2007 were $23,496, of which $573 is attributable to depreciation expense, $5,000 in general and administrative expense paid to an officer and director for services rendered and $15,553 in general and administrative expenses related to the execution of our business plan.  No development related expenses have been or will be paid to our affiliates.  We expect to continue to incur general and administrative expenses for the foreseeable future, although we cannot estimate the extent of these costs.



On August 23, 2006, we secured bridge loan financing, through which we are able to borrow up to $17,500, in increments of $2,500.  The loan bears an interest rate of 10% per annum.  In the three months ended March 31, 2007, we recognized interest expense of $1,319, related specifically to the bridge loan.  We did not recognize any interest expense during the first quarter ended March 31, 2006, as the bridge loan was issued third quarter of 2006.  Since our inception, we recorded interest expense totaling $2,370.



As a result of our lack of revenues and incurring ongoing expenses related to the implementation of our business, we have experienced net losses in all periods since our inception on September 11, 2003.  In the three month period ended March 31, 2007, our net loss totaled $5,039, compared to a net loss of $727 in the prior period ended March 31, 2006.  Since our inception, we have accumulated net losses in the amount of $23,496.  We anticipate incurring ongoing operating losses and cannot predict when, if at all, we may expect these losses to plateau or narrow.  We have not been profitable for nine consecutive years from our inception in 2003 through present 2007.  There is significant uncertainty projecting future profitability due to our history of losses, lack of revenues, and due to our reliance on the performance of third parties on which we have no direct control.



In order for us to achieve profitability and support our planned ongoing operations, we estimate that we must begin generating a minimum of $16,000 sales in the next 12 months.  However, we cannot guarantee that we will generate any such sales.  In an effort to establish a base of operations on which to begin generating revenues, our management designates the following as our priorities for the next six to 12 months:



1.

Identify pet product manufacturers and suppliers:  Our business model is to sell pet supplies to consumers.  In order to obtain saleable merchandise, we must identify potential manufacturers and suppliers of pet products.  During the three months ended March 31, 2007, our President, Renea Yamada, identified suppliers through Internet searches.  However, during that period, we did not have adequate capital resources to purchase inventory and did not contact any manufacturers or suppliers.  We have budgeted a total of $4,000 toward building an inventory of saleable pet supplies.  Subsequent to March 31, 2007, we closed our offering of our equity securities and have used the net proceeds to purchase an inventory of pet products in the amount of $879.  We expect to continuously evaluate other potential suppliers and add new products to inventory during the second and third quarters of 2007.



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2.

Update our website:  We have established a website at www.petexpresssupply.com to serve as our sole method of distribution through which we will market, sell and distribute all merchandise.  Due to the purchase of inventory subsequent to the three months ended March 31, 2007, we plan to update our website to post pictures and information about the products we have stocked.  We expect to have budgeted $2,000 for the website updates, which we plan to conduct intermittently, as products are added to inventory.



3.

Implement an Internet marketing strategy:  We plan to develop and implement a promotional strategy to generate awareness of our brand and drive traffic to our web site by the second or third quarters of 2007.  Our current plan is to develop and implement a marketing plan by utilizing search engine placement and keyword submission optimization services to increase the visibility of our website to our target market.  As of March 31, 2007, we did not develop or implement any marketing strategy due to our lack of operating capital.  Subsequent to that date, we collected the net proceeds of our common stock offering and have begun to advertise via Google.  During May 2007, we spent approximately $300 to optimize our placement for pet supply searches through the Google search engine.



Our management expects that we will experience net cash out-flows for the fiscal year 2007, given developmental nature of our business.  We have only recently begun to accumulate an inventory of pet supplies for sale and initiated our advertising and marketing efforts.  If we do not generate sufficient revenues and cash flows to support our operations over the next 12 months, or if our costs of operations increase unexpectedly, we may need to raise capital by conducting additional issuances of our equity or debt securities for cash.  We can not assure you that any financing can be obtained or, if obtained, that it will be on reasonable terms.  As such, our principal accountants have expressed substantial doubt about our ability to continue as a going concern because we have limited operations and have not fully commenced planned principal operations.



We believe that our cash on hand as of March 31, 2007, in the amount of $207, is not sufficient to execute our planned operations for the next approximately 12 months.  To date, we have received financing from third parties through sales of our equity and debt securities.



On August 23, 2006, we secured bridge loan financing in an effort to sustain our operations for the next six months.  We are able to borrow in increments of $2,500, up to an aggregate of $17,500.  The loan bears an interest rate of 10% per annum.  The total amount borrowed, along with any accrued interest, is due December 31, 2007 and may be paid in part or in full at any time prior to that date without penalty.  In the event we are able to raise at least the minimum gross proceeds of $35,000 in our public offering, all principal and interest accrued thereupon will be due immediately.  As of December 31, 2006, we borrowed a total of $10,000.  We cannot guarantee that we will be able to repay any amount borrowed.  If we fall into default on this loan, we may be unable to extend our repayment date or obtain sufficient funds to satisfy the debenture.



In connection with the debt offering, the note holder was issued warrants to purchase 350,000 shares of our common stock.  The aggregate purchase price is $38,500, or $0.11 per share.  Assuming the exercise of all of the warrants, we intend to use the gross proceeds of $38,500 for general working capital.  However, we cannot assure you that the warrant holder will exercise any of the warrants.



Subsequent to the three months ended March 31, 2007, we closed our offering of common stock, whereby we sold an aggregate of 400,000 shares at a price per share of $0.10, for gross proceeds of $40,000.  We have initiated establishing a base of operations during in May 2007, and expect to expand the scope of our operations by December 31, 2007, of which there can be no assurance.



Our management does not anticipate the need to hire additional full- or part- time employees over the next 12 months, as the services provided by our current officers and directors appear sufficient at this time.  Our officers and directors work for us on a part-time basis, and are prepared to devote additional time, as necessary.  We do not expect to hire any additional employees over the next 12 months.



There are no known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on our revenues from continuing operations.



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Controls and Procedures



We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the SECs rules and forms.  Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.



Based upon their evaluation as of the end of the period covered by this report, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.



Our board of directors were advised by Weaver & Martin, CPAs, our independent registered public accounting firm, that during their performance of audit procedures for 2006 Weaver & Martin, CPAs identified a material weakness as defined in Public Company Accounting Oversight Board Standard No. 2 in our internal control over financial reporting.



This deficiency consisted primarily of inadequate staffing and supervision that could lead to the untimely identification and resolution of accounting and disclosure matters and failure to perform timely and effective reviews.  However, our size prevents us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system.  Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.





















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PART II  OTHER INFORMATION



Unregistered Sales of Equity Securities



In September 2003, we issued 5,000,000 shares of our common stock to Renea Yamada, our founding shareholder and an officer and director.  This sale of stock did not involve any public offering, general advertising or solicitation.  The shares were issued in exchange for services performed by the founding shareholder on our behalf in the amount of $5,000.  Mrs. Yamada received compensation in the form of common stock for performing services related to the formation and organization of our Company, including, but not limited to, designing and implementing a business plan and providing administrative office space for use by the Company; thus, these shares are considered to have been provided as founders shares.  Additionally, the services are considered to have been donated, and have resultantly been expensed and recorded as a contribution to capital.  At the time of the issuance, Mrs. Yamada had fair access to and was in possession of all available material information about our company, as his is the sole officer and director of Pet Express Supply, Inc.  The shares bear a restrictive transfer legend.  On the basis of these facts, we claim that the issuance of stock to our founding shareholder qualifies for the exemption from registration contained in Section 4(2) of the Securities Act of 1933.



In March 2006, we sold 75,000 shares of our common stock to six shareholders, three of whom are affiliates of PES.  The shares were issued at a price of $0.10 per share for total cash in the amount of $7,500.  The shares bear a restrictive transfer legend.  This March 2006 transaction (a) involved no general solicitation, (b) involved less than thirty-five non-accredited purchasers and (c) relied on a detailed disclosure document to communicate to the investors all material facts about Pet Express Supply, Inc., including an audited balance sheet, statements of income, changes in stockholders equity and cash flows.  Each purchaser was given the opportunity to ask questions of us.  Thus, we believe that the offering was exempt from registration under Regulation D, Rule 505 of the Securities Act of 1933, as amended.



In April 2006, we returned the investment of two non-affiliated shareholders, aggregating $2,000 (or 20,000 shares of our common stock).  The shares were returned to our authorized capital and are not considered issued nor outstanding.



On August 23, 2006, we conducted a private offering of debt securities, whereby we secured up to $17,500 in bridge loan financing from Lynn Cole Capital, a non-affiliated entity, whereby the note holder agreed to finance us in increments of $2,500, as needed.  To date, the note holder has loaned us a total of $5,000.  The aggregate principal amount and interest accrued thereupon is due December 31, 2007.  The note bears an interest rate of 10%, calculated annually, and contains no prepayment penalty.  In connection with the debt offering, the note holder was issued warrants to purchase 350,000 shares of our common stock for an aggregate purchase price of $38,500, or $0.11 a share.  The securities were issued in reliance upon an exemption from registration contained in Section 4(2) of the Securities Act.















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Exhibits and Reports on Form 8-K



|Exhibit Number | Name and/or Identification of Exhibit                                             
|-------------- | ----------------------------------------------------------------------------------
|               |                                                                                   
|3              | Articles of Incorporation & By-Laws                                               
|               |                                                                                   
|               | (a) Articles of Incorporation *                                                   
|               |                                                                                   
|               | (b) By-Laws *                                                                     
|               |                                                                                   
|31             | Rule 13a-14(a)/15d-14(a) Certifications                                           
|               |                                                                                   
|               | (a) Renea Yamada                                                                  
|               |                                                                                   
|               | (b) Diane Egger                                                                   
|               |                                                                                   
|32             | Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)



*  Incorporated by reference herein filed as exhibits to the Companys Registration Statement on Form SB-2 previously filed with the SEC on September 26, 2006, and subsequent amendments made thereto.



















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SIGNATURES



Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





PET EXPRESS SUPPLY, INC.(Registrant)SignatureTitleDate/s/ Renea YamadaPresident andMay 11, 2007Renea YamadaChief Executive Officer






























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