Elite Express Holding Inc.

Previous wording

This quarterly report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan,” “project,” or “anticipate,” and other similar words. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth under “Item 1A. Risk Factors” in the Annual Report on Form 10-K (File No. 001-41761) (the “Annual Report”), which was filed with the SEC on February 27, 2026, as amended on March 18, 2026.

Current wording

This quarterly report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan,” “project,” or “anticipate,” and other similar words. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth under “Item 1A. Risk Factors” in the Annual Report on Form 10-K (File No. 001-42811) (the “Annual Report”), which was filed with the SEC on February 27, 2026, as amended on March 18, 2026.

Previous wording

As of the date of this report, we employ approximately 29 full-time staff, including approximately 23 drivers. Our fleet consists of approximately 22 trucks and trailers. We provide exclusive pickup and delivery services within our designated service area, covering approximately 1,665.28 square miles. We utilize GroundCloud, a leading logistics software, during our course of business, for route optimization, driver management, and compliance monitoring. Additionally, we are actively expanding our investment in advanced technologies to enhance our scalability, automate our operations, and drive our data-driven decision-making. On an average day, we complete between 1,100 to 1,700 stops, facilitating the pickup and delivery of approximately 1,800 to 2,500 packages. During peak seasons, our daily stops rise to an estimated 2,000, allowing us to meet heightened demand with efficiency and reliability.

Current wording

As of the date of this report, we employ approximately 29 full-time staff, including approximately 23 drivers. Our fleet consists of approximately 22 trucks and trailers. We provide exclusive pickup and delivery services within our designated service area, covering approximately 1,665.28 square miles. We utilize GroundCloud, a leading logistics software, in the course of our business, for route optimization, driver management, and compliance monitoring. Additionally, we are actively expanding our investment in advanced technologies to enhance our scalability, automate our operations, and drive our data-driven decision-making. On average, we complete between 1,100 and 1,700 stops, facilitating the pickup and delivery of approximately 1,800 to 2,500 packages. During peak seasons, our daily stops rise to an estimated 2,000, allowing us to meet heightened demand with efficiency and reliability.

Previous wording

Comparison of Results of Operations for the Three Months and Six Months ended May 31, 2026 and May 31, 2025:

Current wording

Comparison of Results of Operations for the Three Months and Nine Months ended August 31, 2026 and August 31, 2025:

Previous wording

For the three months ended May 31, 2026, we generated total revenue of $726,829, representing an increase of $96,579, or 15.3%, compared with $630,250 for the three months ended May 31, 2025. These increases were primarily attributable to increased weekly service charge standard under our updated service contract and higher volume-based activity revenue contributed by fuel surcharge payment.

Current wording

For the three months ended August 31, 2026, we generated total revenue of $766,422, representing an increase of $132,557, or 20.9%, compared with $633,865 for the three months ended August 31, 2025. These increases were primarily attributable to higher weekly service charges under our updated service contract and higher volume-based activity revenue, including fuel surcharge revenue.

Previous wording

For the six months ended May 31, 2026, we generated total revenue of $1,532,127, representing an increase of $209,734, or 15.9%, compared with $1,322,393 for the six months ended May 31, 2025. These increases were primarily attributable to higher volume-based activity revenue, particularly from e-commerce deliveries and fuel surcharges payment driven by an increasing population and the expansion of commercial activity in the areas we serve.

Current wording

For the nine months ended August 31, 2026, we generated total revenue of $2,298,549, representing an increase of $342,291, or 17.5%, compared with $1,956,258 for the nine months ended August 31, 2025. These increases were primarily attributable to higher weekly service charges, higher volume-based activity revenue, particularly from e-commerce deliveries and fuel surcharge revenue.

Previous wording

For the three months ended May 31, 2026, total fixed revenue was $214,333, accounting for approximately 29.5% of total revenue, representing an increase of $57,860, or 37.0%, compared to the fixed revenue of $156,473, or approximately 24.8% of total revenue for the three months ended May 31, 2025. For the six months ended May 31, 2026, total fixed revenue was $373,940, accounting for approximately 24.5% of total revenue, representing an increase of $64,673, or 20.9%, compared to the fixed revenue of $309,267, or approximately 23.4% for the six months ended May 31, 2025. The increase primarily due to the increase of weekly service charge standard under our updated service contract from February 2026.

Current wording

For the three months ended August 31, 2026, total fixed revenue was $216,230, accounting for approximately 28.2% of total revenue, representing an increase of $60,586, or 38.9%, compared to the fixed revenue of $155,644, or approximately 24.6% of total revenue for the three months ended August 31, 2025. For the nine months ended August 31, 2026, total fixed revenue was $590,170, accounting for approximately 25.6% of total revenue, representing an increase of $125,259, or 26.9%, compared to the fixed revenue of $464,911, or approximately 23.8% for the nine months ended August 31, 2025. The increase was primarily due to higher weekly service charges under our renewed ISP agreement with FedEx, effective February 21, 2026.

Previous wording

For the three months ended May 31, 2026, total activity-based revenue accounted for $512,123, or 70.4% of total revenue up from $470,826, or 74.6% of total revenue in the same period of the prior year. For the six months ended May 31, 2026, total activity-based revenue accounted for $1,133,460, or 74.0% of total revenue up from $1,009,677, or 76.3% of total revenue in the same period of the prior year. This growth was primarily driven by an increase in the number of parcels we handled and increased fuel surcharge payment as a result of general increasing fuel price.

Current wording

For the three months ended August 31, 2026, total activity-based revenue was $545,879, or 71.2% of total revenue, compared with $477,705, or 75.4% of total revenue in the same period of the prior year, driven by a $48,594 increase in fuel surcharge revenue reflecting higher market fuel prices and a $16,508 increase in stop revenue as delivery activities increased. For the nine months ended August 31, 2026, total activity-based revenue was $1,679,339, or 73.1% of total revenue, compared with $1,487,382, or 76.0% of total revenue in the same period of the prior year. This growth was primarily driven by an increase in the number of parcels we handled and higher fuel surcharge revenue resulting from increased market fuel prices.

Previous wording

Among all revenue categories, e-commerce deliveries and weekly service charges continued to be the two largest contributors to our total revenue for both three months and six months ended May 31, 2026 and May 31, 2025.

Current wording

Among all revenue categories, E-commerce deliveries and weekly service charges were the two major contributors to our total revenue for both the three and nine months ended August 31, 2026 and August 31, 2025.

Previous wording

For the three months ended May 31, 2026, our cost of revenue was $645,792, or 88.7% of total revenue, compared with $612,248, or 97.2%, for the three months ended May 31, 2025. This increase was primarily due to increased maintenance and repair fees and cost of service arising from the rental of additional vehicles to fulfill our delivery volume obligations.

Current wording

For the three months ended August 31, 2026, our cost of revenue was $670,663, or 87.4% of total revenue, compared with $627,048, or 98.9%, for the three months ended August 31, 2025. This increase was primarily due to a $28,148 increase in maintenance and repair expense, a $19,928 increase in cost of service and a $19,754 increase in fuel expense, partially offset by a $34,060 decrease in depreciation and amortization.

Previous wording

The cost of revenue consists of labor, fuel, depreciation and amortization, service and maintenance related expenses. Overall, our cost of main operations has been well managed compared to revenue growth, reflecting our continuously improving operational management capabilities. Each component of our cost of revenue impacted the overall cost structure during the three and six months ended May 31, 2026 and May 31, 2025, as discussed below:

Current wording

The cost of revenue consists of labor, fuel, depreciation and amortization, service and maintenance related expenses. Each component of our cost of revenue impacted the overall cost structure during the three and nine months ended August 31, 2026 and August 31, 2025, as discussed below:

Previous wording

For the three months ended May 31, 2026, we recorded our gross profit of $81,037, or 11.3% of total revenue, compared with a gross profit of $18,002, or 2.8%, for the three months ended May 31, 2025. The increase of $63,035 was primarily driven by increased revenue.

Current wording

For the three months ended August 31, 2026, we recorded our gross profit of $95,759, or 12.6% of total revenue, compared with a gross profit of $6,817, or 1.1%, for the three months ended August 31, 2025. The increase of $88,942 was primarily driven by increased revenue.

Previous wording

For the six months ended May 31, 2026, we recorded a gross profit of $238,402, or 15.6% of total revenue, compared with a gross loss of $14,405, or 1.1 % of total revenue for the six months ended May 31, 2025. The increase of $252,807 was primarily driven by an increase in revenue.

Current wording

For the nine months ended August 31, 2026, we recorded a gross profit of $334,161, or 14.6% of total revenue, compared with a gross loss of $7,588, or 0.3% of total revenue for the nine months ended August 31, 2025. The increase of $341,749 was primarily driven by an increase in revenue.

Previous wording

For the three months ended May 31, 2026, general and administrative expenses were $706,072, compared with $141,762 for the three months ended May 31, 2025, representing an increase of $564,310, or 398.1%. The increase in administrative expenses was primarily due to higher management and staff remuneration following the Company’s listing, increased expenditure on various professional services and higher compensation expenses, and increased franchise tax as a result of becoming a listed company.

Current wording

For the three months ended August 31, 2026, general and administrative expenses were $1,017,024, compared with $151,600 for the three months ended August 31, 2025, representing an increase of $865,424, or 570.9%. The increase in administrative expenses was primarily due to higher management and staff remuneration following the Company’s IPO, increased expenditure on various professional services and higher compensation expenses, and increased franchise tax as a result of becoming a public company.

Previous wording

For the six months ended May 31, 2026, general and administrative expenses were $1,170,678, compared with $425,381 for the six months ended May 31, 2025, representing an increase of $745,297, or 175.2%. The increase in administrative expenses was primarily due to higher management and staff remuneration following the Company’s listing, increased expenditure on various professional services, human resources expenses and higher insurance costs, and increased franchise tax as a result of becoming a listed company.

Current wording

For the nine months ended August 31, 2026, general and administrative expenses were $2,187,702, compared with $576,981 for the nine months ended August 31, 2025, representing an increase of $1,610,721, or 279.2%. The increase in administrative expenses was primarily due to higher management and staff remuneration following the Company’s IPO, increased expenditure on various professional services, human resources expenses and higher insurance costs, and increased franchise tax as a result of becoming a public company.

Previous wording

Interest income was $216,101 and $414,838, respectively, for the three and six months ended May 31, 2026, compared with an interest expense of $nil and $nil, respectively, for the three and six months ended May 31, 2025. This increase in interest income was primarily attributable to interest earned on funds lent to unrelated third parties on a short-term basis to optimize the return on proceeds raised through our IPO, before allocating and utilizing those funds in accordance with the purposes set forth in the prospectus.

Current wording

Interest income, net was $161,127 and $575,965, respectively, for the three and nine months ended August 31, 2026, compared with an interest income of $2,248 and $2,248, respectively, for the three and nine months ended August 31, 2025. This increase in interest income was primarily attributable to interest earned on funds lent to unrelated third parties on a short-term basis to optimize the return on proceeds raised through our IPO, before allocating and utilizing those funds in accordance with the purposes set forth in the prospectus.

Previous wording

Our income tax provision was $nil for the three months ended May 31, 2026, compared with an income tax provision of $400 for the three months ended May 31, 2025 due to the tax provision adjustment in the third quarter of fiscal year 2025 related to nondeductible IPO-related costs.

Current wording

Our income tax provision was $nil for the three months ended August 31, 2026, compared with an income tax provision of $43,346 for the three months ended August 31, 2025 due to the tax provision adjustment in the third quarter of fiscal year 2025 related to nondeductible IPO-related costs.

Previous wording

We recorded a tax provision of $1,600 for the six months ended May 31, 2026, compared with a benefit of $105,898 for the six months ended May 31, 2025. The realization of a tax benefit was mainly driven by the loss before income taxes we incurred during the six months ended May 31, 2026.

Current wording

We recorded a tax provision of $1,600 for the nine months ended August 31, 2026, compared with a benefit of $62,552 for the nine months ended August 31, 2025.

Previous wording

As a result of the above factors, for the three months ended May 31, 2026, we reported a net loss of $2,532,942, compared with a net loss for the three months ended May 31, 2025 of $107,604. For the six months ended May 31, 2026, we reported a net loss of $2,643,046, compared with a net loss for the six months ended May 31, 2025 of $312,603.

Current wording

As a result of the above factors, for the three months ended August 31, 2026, we reported a net loss of $760,138, compared with a net loss for the three months ended August 31, 2025 of $185,881. For the nine months ended August 31, 2026, we reported a net loss of $3,403,184, compared with a net loss for the nine months ended August 31, 2025 of $498,484.

Previous wording

In assessing our liquidity, we monitor and analyze our cash on hand, our ability to generate sufficient revenue, the collection of our accounts receivable, our ability to obtain additional financial support in the future, and our operating and capital expenditure commitments. As of May 31, 2026, we reported cash of $5,235,991 and working capital of $17,275,349, attributable primarily to our IPO completed in August 2025. Working capital as of May 31, 2026 is composed principally of $9,649,811 in loans receivable that mature in May 2026, with cash and other current assets comprising the remainder. Our near-term liquidity is therefore dependent primarily on the timely collection of the outstanding loan balances upon their maturity. Each loan is secured by an irrevocable personal unlimited joint and several liability guarantee provided by the shareholders or chief executive officers of the respective borrowing parties. We expect to collect substantially all outstanding loan principal upon maturity in May 2026 and intend to redeploy those proceeds in accordance with the intended uses set forth in our prospectus. As of the issuance date of this report, $150,000 of the outstanding balance has been received. In the period between the balance sheet date and the expected May 2026 loan maturities, we expect to fund ongoing operating requirements through a combination of cash on hand, operating revenues, and any advance repayments received from borrowers prior to maturity.

Current wording

In assessing our liquidity, we monitor and analyze our cash on hand, our ability to generate sufficient revenue, the collection of our accounts receivable, our ability to obtain additional financial support in the future, and our operating and capital expenditure commitments. As of August 31, 2026, we reported cash of $3,003,589 and working capital of $16,548,682, attributable primarily to our IPO completed in August 2025 and the private placement that closed in June 2026. Working capital as of August 31, 2026 is composed principally of $11,549,811 in loans receivable that mature in November 2026 or later, with cash and other current assets comprising the remainder. Our near-term liquidity is therefore dependent primarily on the timely collection of the outstanding loan balances upon their maturity. Each loan is secured by an irrevocable personal unlimited joint and several liability guarantee provided by the shareholders or chief executive officers of the respective borrowing parties. We expect to collect substantially all outstanding loan principal upon maturity around November 2026 and intend to redeploy those proceeds in accordance with the intended uses set forth in our prospectus. In the period between the balance sheet date and the expected November 2026 loan maturities, we expect to fund ongoing operating requirements through a combination of cash on hand, operating revenues, and any advance repayments received from borrowers prior to maturity.

Previous wording

Our future capital requirements will depend on many factors, including the rate of revenue growth, the timing and amount of cash received from customers, the expansion of sales and marketing activities, the timing and cost of new service efforts, and the success of its efforts to expand business with its current client and to acquire additional businesses. If additional resources are required, we may issue additional equity or debt securities. The sale of additional equity or equity-linked securities could result in further dilution to stockholders. Incurring additional debt would increase our debt service obligations and could impose operating and financial covenants that may limit our operations. Further, financing may not be available in amounts or on terms that are acceptable to us, or it may not be available at all.

Current wording

Our future capital requirements will depend on many factors, including the rate of revenue growth, the timing and amount of cash received from customers, the expansion of sales and marketing activities, the timing and cost of new service efforts, and the success of our efforts to expand business with our current client and to acquire additional businesses. The Company believes its balances of cash, cash equivalents and marketable securities, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond. If additional resources are required, we may issue additional equity or debt securities. The sale of additional equity or equity-linked securities could result in further dilution to stockholders. Incurring additional debt would increase our debt service obligations and could impose operating and financial covenants that may limit our operations. Further, financing may not be available in amounts or on terms that are acceptable to us, or it may not be available at all.

Previous wording

Cash Flows for the Six Months ended May 31, 2026 and May 31, 2025

Current wording

Cash Flows for the Nine Months ended August 31, 2026 and August 31, 2025

Previous wording

Net cash provided by financing activities amounted to $7,928,530 for the six months ended May 31, 2026, mainly attributable to proceeds from issuance of common stock under private placement agreement.

Current wording

Net cash provided by financing activities amounted to $7,993,336 for the nine months ended August 31, 2026, mainly attributable to proceeds from issuance of common stock under private placement agreement. Net cash provided by financing activities during the nine months ended August 31, 2026 consisted of $8,000,000 of gross proceeds from the issuance of 32,000,000 shares of our Class A common stock to eight non-U.S. investors at a purchase price of $0.25 per share, which closed on June 4, 2026 and was conducted in offshore transactions pursuant to Rule 903 of Regulation S under the Securities Act of 1933, as amended, and $141,897 of insurance premium financing, partially offset by $107,131 of repayments under our insurance premium financing arrangements and $41,430 of deferred offering costs paid in connection with the registration statement on Form S-3 we filed on August 28, 2026

Previous wording

Prior to JAR Acquisition, as an S-Corporation, the Predecessor was not subject to federal corporate income taxation, and its taxable income, deductions, and credits were passed through to its stockholders. the Predecessor was subject to the California corporate franchise tax under RTC § 23802, which requires S-Corporations to pay the greater of a minimum tax of $800 or 1.5% of net taxable income derived from California sources. In accordance with ASC 740-10-15-4, deferred tax assets and liabilities were recognized for state-level temporary differences and net operating loss (“NOL”) carryforwards. Following the JAR Acquisition, the Predecessor became a wholly

Current wording

Prior to JAR Acquisition, as an S-Corporation, the Predecessor was not subject to federal corporate income taxation, and its taxable income, deductions, and credits were passed through to its stockholders. The Predecessor was subject to the California corporate franchise tax under RTC § 23802, which requires S-Corporations to pay the greater of a minimum tax of $800 or 1.5% of net taxable income derived from California sources. In accordance with ASC 740-10-15-4, deferred tax assets and liabilities were recognized for state-level temporary differences and net operating loss (“NOL”) carryforwards. Following the JAR Acquisition, the Predecessor became a wholly owned subsidiary of the Company, and a C-Corporation, and is subject to corporate income taxation under the Internal Revenue Code and applicable state tax laws.

Previous wording

ASC 740 requires a tax position to meet a recognition threshold before it is recognized in the financial statements. We assess uncertain tax positions based on management’s evaluation of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. This assessment includes consideration of any potential appeals or litigation processes based on the technical merits of the tax position. Because significant assumptions and judgments are involved in determining whether a tax benefit is more likely than not to be sustained, actual results may differ from estimates under different assumptions or conditions. We recognize interest and penalties related to unrecognized tax benefits as part of the income tax provision in the consolidated statements of income.

Current wording

ASC 740 requires a tax position to meet a recognition threshold before it is recognized in the financial statements. We assess uncertain tax positions based on management’s evaluation of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. This assessment includes consideration of any potential appeals or litigation processes based on the technical merits of the tax position. Because significant assumptions and judgments are involved in determining whether a tax benefit is more likely than not to be sustained, actual results may differ from estimates under different assumptions or conditions. We recognize interest and penalties related to unrecognized tax benefits as part of the income tax provision in the consolidated statements of operations.

Previous wording

We review long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If an impairment indicator is present, we evaluate recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted expected future cash flows over the remaining useful life of the asset group. If the carrying amount exceeds the recoverable amount, an impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset. We estimate fair value using the expected future cash flow discounted at a rate consistent with the risks associated with the recovery of the assets. Based on the above analysis, no impairment loss was recognized for three months and six months ended May 31, 2026 and May 31, 2025.

Current wording

We review long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If an impairment indicator is present, we evaluate recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted expected future cash flows over the remaining useful life of the asset group. If the carrying amount exceeds the recoverable amount, an impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset. We estimate fair value using the expected future cash flow discounted at a rate consistent with the risks associated with the recovery of the assets. Based on the above analysis, no impairment loss was recognized for three months and nine months ended August 31, 2026 and August 31, 2025.

Previous wording

negotiated fixed and variable charges (Negotiated Charges) between the Company and FedEx, documented in the ISP Agreement’s Schedule C and related attachments. The fixed component (weekly service charges) is set at the inception of the rate term; the variable component (activity-based charges) is tied to the actual volume of services completed (e.g., number of stops, packages handled) and includes fuel surcharges that adjust weekly based on market fuel prices. There are no rebates, returns, or other material variable consideration provisions outside of the agreed activity-based charges. As FedEx is the Company’s sole counterparty, there is no prepayment requirement from customers; the Company and FedEx settle service fees based on FedEx’s official confirmation of the actual completed service volume for each settlement period. Since the fixed and activity-based charges under the ISP Agreement are explicitly tied to separate, distinct performance obligations (continuous service coverage vs. per-unit activity execution), no allocation of the transaction price is required under ASC 606. For activity-based revenue, it is recognized at a point in time when control of the service (for FedEx) is transferred and the delivery is completed to the end-recipient’s designated destination, as evidenced by the end-recipient’s signature on the delivery note and subsequent verification by FedEx. Transit periods for individual delivery tasks typically do not exceed one month, and the Company and FedEx settle all service fees on a regular contractual basis. The Company has a contractual credit term with FedEx for service fee settlement, with standard payment terms of one week.

Current wording

Each service task assigned by FedEx (including stop execution and package delivery) is a distinct component of the overall performance obligations under the ISP Agreement; the aggregate of these tasks constitutes the single ongoing performance obligation of providing last-mile delivery services to FedEx as an ISP. The transaction price under the ISP Agreement is determined based on mutually negotiated fixed and variable charges (Negotiated Charges) between the Company and FedEx, documented in the ISP Agreement’s Schedule C and related attachments. The fixed component (weekly service charges) is set at the inception of the rate term; the variable component (activity-based charges) is tied to the actual volume of services completed (e.g., number of stops, packages handled) and includes fuel surcharges that adjust weekly based on market fuel prices. There are no rebates, returns, or other material variable consideration provisions outside of the agreed activity-based charges. As FedEx is the Company’s sole counterparty, there is no prepayment requirement from customers; the Company and FedEx settle service fees based on FedEx’s official confirmation of the actual completed service volume for each settlement period. Since the fixed and activity-based charges under the ISP Agreement are explicitly tied to separate, distinct performance obligations (continuous service coverage vs. per-unit activity execution), no allocation of the transaction price is required under ASC 606. For activity-based revenue, it is recognized at a point in time when control of the service (for FedEx) is transferred and the delivery is completed to the end-recipient’s designated destination, as evidenced by the end-recipient’s signature on the delivery note and subsequent verification by FedEx. Transit periods for individual delivery tasks typically do not exceed one month, and the Company and FedEx settle all service fees on a regular contractual basis. The Company has a contractual credit term with FedEx for service fee settlement, with standard payment terms of one week.