Conference Transcript: Interview - August 27, 2001 4:30pm EST

(Richard_Altomare) Good Afternoon Everyone and thank you for inviting me and the President of the Postal Business Center Network on this chat.

(TJ^) Good Afternoon Mr. Altomare
(TJ^) Mr. Altomare, TT will be our moderator.

(TT) Good Afternoon, Mr. Altomare, glad you could join us.

(Richard_Altomare) Thank you TT. Glad to be here.

(TJ^) Okay, TT please begin.

(TT) Our first question... You have recently announced a dividend of 8 percent to existing shareholders on Sept 21, 2001.  How do you intend to pay for this dividend?

(Richard_Altomare) With stock and seized cash from the recent judgment.

(TT) Isn't a stock dividend contrary to your press release stating that you want to buy back shares?

(Richard_Altomare) We don't believe so. Since the objective of the company is to continue to battle on all fronts and in all directions with those that sell stock that they do not own.

(TT) There has been speculation that the dividend shares are coming from the difference between the shares outstanding (58.2 million) minus the shares in the float (53.6 million).  Is there any validity in this? 

(Richard_Altomare) No, we will issue additional shares from the treasury to those shareholders that actually own certificates.

(TT) What is the total O/S and Float as of today?

(Richard_Altomare) We do not and have never given outstanding shares and float in violation of the way in which NASDAQ and the SEC require us to do so to ALL shareholders at the same time in the form of our filed Q's and K's. I would recommend that we concentrate more on the naked short than any ammunition that we as a company have and will use to drive the Huns back into the sea.

(TT) Can you quote what the outstanding shares are from your last Q? Do you know what the float roughly stands at?

(Richard_Altomare)  All outstanding share information can be found in our filings.

(TT) You have a credit facility for 5.8 million from The International Investment Group.  According to a recent press release, you have paid off all of your previous debt.  The word previous is a little bit uncertain.  Does it mean all of your debt to date, or what date does it cover up to?

(Richard_Altomare) All debt to date. The reason we used the term previous debt, was to inform naked shorters that every convertible debenture and any possible overhang to receive certificates from this company was simply not going to happen.

(TT) In relation to your paid debts, how have you paid the debt off?  Was it done by issuing more shares, or from moneys collected from the recent lawsuit, or by taking out a new debt? (assuming that in the press release that mentions all previous debt has been paid, the word previous does not include present debt)?

(Richard_Altomare) We believe we answered that question. Utilize available cash, operating profits and shares of stock and we believe we've answered the other portions of this question in a previous answer.

(TT) Have you begun to repurchase the shares stated in your press release?  I understand it may be a little bit premature to ask this question.

(Richard_Altomare) Apparently it's never premature for any of our shareholders to ask any question of any issue in their mind. We have set up the mechanism and begun a methodical completion that which was stated in our press release. It is our hope that as moneys are seized from the judgment a percentage will be used to acquire shares of stock. We are aware our shareholders will want to know a percentage. We truly do not know at this time.

(TT) In the Press release of August 16, when you said the company is commencing seizure steps on 389 million judgment, Mr. Gunderson stated "Actual amounts and items will be reported when counsel and due process have been completed."  Is there a definitive timetable to how long due process will take?  What steps are involved before you can actually post a press release disclosing these amounts?

(Richard_Altomare) There is no time frame and a press release will be presented when actual items and/or cash are able to be quantified. I remind everyone that we here at USXP are as anxious as they are to begin listing seizures. But we must wait till due process as the summer months in Europe are behind bankers and attorney's in Europe.

(TT) Perhaps this question is more for your trial counsel (Mr. Tifford) but it has been speculated that both Ronald G. Williams and Walter S. Kolker have been jailed because they could not come up with sufficient cash to pay their restitution fees, according to Mr. Tifford (See article).  Is this the case, or is it that they were BOTH fined AND sentenced to serve jail time.  In other words, could they have avoided jail time if they would have paid their restitution fees?

(Richard_Altomare) Only Mr. Williams is in jail. Mr. Kolker is not presently incarcerated. I feel as the questionor Mr. Tifford would be better able to explain Florida Law since most Americans are still trying to understand Florida voting patterns and laws.

(TT) lol
(TJ^) lol

(TT) Okay, moving right along...

(TT) Your court award has been comprised of more than one type of award.  Of the 389 million, 275 million has been considered to be punitive damages.  You have stated in a press release "Should there be any sums not collected, they appear to be able to be carried over as a tax loss for the Company or any acquiring company. This is an additional benefit not yet fully addressed and still being studied by our professionals and advisors"  Have you addressed this issue yet, and is the entire amount eligible for the tax loss or only a partial amount?

(Richard_Altomare) We believe the entire amount. However, as I have stated to countless shareholders, the final decider of this issue is the IRS agent reviewing the tax return of the company or an acquiring company. I remind you all that the IRS gives the same final exam to its agents year after year, but to prevent cheating they often change the answers.

(TT) If any moneys are collected from the court award, is it taxable in USXP's name?

(Richard_Altomare) No. Because in addition to a tax loss, carry forward benefits, USXP also possesses substantial tax benefits that are readily available by looking at our K's and Q's, and to avoid overloading Edgar, I believe USXP still has over $30million in tax loss carry forward.

(TT) When any sums of money is received by a corporation, one of the first priorities should be buying back shares.  This will reduce the float and cause many shorts to cover their positions, as well as boost the share price for existing shareholders.  It effectively ensures any future recoveries over a smaller number of shares thus increasing shareholder value.  Is this the main focus of the corporation once the money is received or are there other matters that stand ahead of this?

(Richard_Altomare) We do not agree completely with your premise. We would agree with your premise if naked shorts in our opinion did not exceed our total issue. Moneys in our opinion should be used in the form of dividends to its shareholders, acquisitions of new and profitable businesses and then the buying back of shares.

(TT) It has been postulated that issuing the dividend will cause many shorts to cover their position.  Is there any truth in this?

(Richard_Altomare) We hope so, however, fighting these sophisticated shorters will require much more than just the dividend.

(TT) Thank you... moving forward, what are the long range plans for USXP?

(Richard_Altomare) Five dollars a share, no shareholders calling me and a minimum of one chat room per quarter as well as National recognition and 14,000 like yourself so loyal to me because of the money's earned by standing together against a previously unbeatable system. Also... from the President of PBC Network: We would look forward to the day that all postal stores march and work as one in the establishment of a dream that began ten years ago and appears to be happening. We will move ahead with PBC, Worldpost, and other divisions through increased marketing, expansion of services and products and loyalty to our customers.

(TT) USXP has announced it is making an acquisition of a company. How is this to be done and where is the money coming from?

(Richard_Altomare) Operating capital will be obtained from a traditional lending institution, purchasing of private ownership may involve some cash and some stock, restricted of course, since we have only announced a letter of intent a formal contract and closing would be announced to the shareholders when it is completed. That completion is scheduled to begin this evening as I fly to Chicago to commence the closing and due diligence.

(TT) Just a small backtrack regarding the settlement... What are probabilities of actually collecting on that lawsuit settlement? Has USXP started filing liens on properties and commenced in the repossessions and foreclosures?

(Richard_Altomare) The answer is we still believe that we are 100% behind our attorney's claims that it is completely collectable.

(TT) Moving to the next question... What type of accounting treatment will be applied to USXP's books to record the litigation settlement that is an off-balance sheet item? Has the IRS been contacted for special rulings regarding NOL usage if some of the settlement is not collectable?

(Richard_Altomare) I am told by my accountants that the majority of the judgment is planned to be booked as a receivable. Our accountants further inform me that they have been speaking with the IRS to cover any special rulings regarding this settlement, and I'm sorry but USXP and its executive officers simply do not understand the words "Not Collectable."

(TT) Have the management of USXP looked at possibly  securitizing the litigation settlement receivable and the seized assets, and selling the securitization as a private or public special equity note? If so would the company use the cash proceeds to continue current business and/or obtain new businesses?

(Richard_Altomare) Yes, we have discussed many alternatives to the judgment that has been mentioned. The second part of your question, I believe has been previously answered when I stated in what order we would use seized moneys.

(TT) Thank you, just a few more questions...

(Richard_Altomare) Thank you, I need to prepare for my flight to Chicago...the one you want me to go to in a few moments.

(TT) Will the name change from Universal Express to Universal Holdings Inc. involve changing the company logo?  Does it involve extra expenditures that would not have otherwise been in place if the name was not changed?  Will this involve a ticker symbol change?  Are the names of the subsidiaries going to remain the same?

(Richard_Altomare) This is an excellent question. During my free time between questions tonight I have written a draft of a press release addressing all of these pertinent questions. I have faxed my draft during questions 11 and 12 to my General Counsel for his review tomorrow, and I believe all of these questions will be answered to all of the shareholders sometime tomorrow, or latest on Wednesday.

(TT) Recently you announced Universal Express, Inc.'s Subsidiary WorldPost.com to Offer International Shipping Territories to Postal Business Center Network Members ``With approximately 4000 territories to be initially sold at an average cost of $80,000 each. How many of these territories have already been sold? Do you expect to sell them all? If so, do you anticipate discounting your quoted price per territory? After all, that's another 320 million, isn't it?

(Richard_Altomare) Yes it is. But we do plan to spread it out over more than one year. Hope you will still be with us at that time. From Mark Falk, PBC President: If you look at the handful of other companies reselling major carriers international shipping, you will notice that it is an ongoing process of sales and new territory sales. 4000 territories is an awful lot of territory. We plan on marketing it properly to get the most benefit in the shortest period of time.

(TT) Mr. Altomare I want to thank you for your time in being here and I hope we can have you back again.
(Insert: I would like to acknowledge Mr. Mark Falk's participation in this interview, Thank you, Sir.)

(Richard_Altomare) Thank you for inviting us. We hope we've answered your questions. Should your questions have not been asked, don't hesitate to email them to me directly. But please wait until Thursday because I will be in Chicago and other cities in the next 48 hours. No, I will not tell you what other cities, please be more patient and allow the flower to grow. Have a good evening and thank you again. Good night.

(TJ^) Thanks for your time Mr. Altomare
(TT) Good Night, Mr. Altomare and thank you.