NASDAQ: LSH

We have established an extensive
collaboration network of service providers, including global freight carriers for our cross-border freight consolidation and forwarding
services as well as domestic ground transportation carriers for our U.S. domestic transportation services.

We operate three massive and
hyper-busy regional warehousing and distribution centers in the U.S., in Illinois and Texas. With an aggregate gross feet area of approximately
142,484 square feet and 52 docks, our regional warehousing and distribution centers have an aggregate daily floor load of up to 3,000
cubic meters of freight. In addition to our self-operated regional centers, we maintain close contact with over 150 warehouses and distribution
terminals in almost all transportation hubs in the U.S. which we have cooperated in the past to support the warehousing and distributing
services of our cross-border freight in case such freight requires storage, fulfilment, transloading, palletizing, packaging or distribution
in states other than Illinois and Texas. As of June 30, 2025, we had assisted with the customs clearance, in conjunction with our other
service offerings, of cross-border freight of an aggregate assessed value of over $54.0 million.

Leveraging our strong cross-border supply chain service capabilities,
extensive service provider network of cross-border freight carriers and U.S. domestic ground transportation carriers, massive and
hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have been able to build
up our brand and reputation and have achieved fast growth since our inception. As of June 30, 2025, we had fulfilled over 55,000 cross-border
supply chain solution orders for freight of an aggregate assessed value of $1.0 billion, among which, 14,000 orders were completed
during the year ended June 30, 2025. Our orders were delivered to thousands of business and residential addresses in approximately 48
U.S. states.

During the year ended June 30, 2025, we had a
new business segment through Hupan Pharmaceutical, a comprehensive pharmaceutical distribution and supply
chain service provider headquartered in Wuhan, China with verticals in brand promotion and healthcare technology support. We acquired the acquired 100% equity interest of Hupan Pharmaceutical
in late 2024. We have partnered
with some pharmaceutical manufacturers to supply infusion fluids, which are our major pharmaceutical products sold and distributed during
the year.

Our Solutions and Services

We primarily offer cross-border
ocean freight solutions and airfreight solutions in the U.S. that are specifically tailored to our customers’ requirements and needs
in transporting goods into the U.S.

Services under our cross-border
ocean freight solutions and cross-border airfreight solutions typically include (i) cross-border freight consolidation and forwarding
services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation.

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Cross-border Freight Consolidation and Forwarding
Services

As a licensed non-vessel operating
common carrier, or NVOCC and indirect air carrier, we provide cross-border ocean and air freight consolidation and forwarding services
either as a freight consolidator or agent for an ocean or air shipping carrier. Solutions under our cross-border freight consolidation
and forwarding services include ocean freight consolidation and forwarding and airfreight consolidation and forwarding. We collaborate
with major global ocean carriers and air to cater to their shipping and space needs throughout the year, including during peak periods.

Customs Clearance Services

We provide customs clearance
services to our customers in conjunction with our other service offerings. We typically collaborate with licensed customs brokerage experts
to help our customers clear shipments importing into the U.S. through customs by preparing and filing required documentation, calculating
and providing for payment of duties, taxes and fees on behalf of our customers as well as arranging for any required inspections by governmental
agencies. Our customs clearance services include screening commercial documentation for assessed value, country of origin, application
for special trade programs and classification.

Warehousing and Distribution Services

For cross-border freight we
pick up at ocean ports and airports that require storage, fulfilment, trans-loading, palletizing, packaging or distribution, we offer
ancillary warehousing and distribution services at our two regional warehousing and distribution centers in Illinois and Texas, adjacent
to the O’Hare International Airport and Dallas Fort Worth International Airport, respectively, and are connected to almost all major
U.S. domestic railroads and/or ports. With an aggregate gross feet area of approximately 98,220 square feet and 39 docks, our regional
warehousing and distribution centers have an aggregate daily operation capacity of up to 3,000 cubic meters of freight for storage, packaging
and other fulfilment services. Our regional warehousing and distribution centers are generally utilized by multiple customers at a time
so that such customers may benefit from cost savings related to shared space, labor, equipment and other efficiencies.

U.S. Domestic Ground Transportation Services

We provide full-truckload
and less-than-truckload ground transportation of cross-border freight to businesses and residences in the U.S. either directly from port
to door, or from our regional warehousing and distribution centers to such domestic addresses. Our U.S. domestic ground transportation
services are offered through an extensive network in collaboration with our ground transportation service providers.

Pharmaceutical Distribution Service

We also provide comprehensive pharmaceutical distribution and supply
chain services through our subsidiary, Hupan Pharmaceutical. We have obtained a specialized license of pharmaceutical distribution in
Mainland China. Partnering with pharmaceutical manufacturers and end customers, we order, purchase and pick up pharmaceutical products
from manufacturers and distribute such products to a variety of customers to their designated locations.

Service Providers and Suppliers

We have established an extensive and long-standing service provider
network of (i) global freight carriers and (ii) U.S. domestic ground transportation carriers. As of June 30, 2025, we had collaborated
with almost all major global ocean and air carriers to forward cross-border shipments consisting of over 35,900 TEU of container loads
and 69,300 tons of air cargo. We had also cooperated with over 200 domestic ground transportation carriers including almost all major
U.S. domestic ground transportation carriers with a domestic ground transportation network of approximately 60,000 drivers and 150 terminals
as of June 30, 2025, on a long-term, short-term or order basis, as the case may be. We also collaborate with licensed customs brokerage
experts to help our customers clear shipments.

We use a consistent approach
in selecting and managing the service suppliers across all of our solution and service offerings, beginning with a rigorous qualification
and risk-based diligence process. We only select and engage compliance-focused, efficiently-run and growth-oriented service providers
with superior service quality based upon defined value elements and are intentional in our relationship and performance management activities.
We consider our current working relationships with these service providers to be satisfactory. However, changes in the financial stability
and operating capabilities and capacity of asset-based carriers, capacity allotments available from carriers, governmental regulation
or deregulation efforts, modernization of the regulations governing customs brokerage, and/or changes in governmental restrictions, quota
restrictions or trade accords could affect our business in unpredictable ways.

For our pharmaceutical distribution
services, we source products of approximately 6.5 million units from approximately 7 suppliers and deliver them to 47 customers during
the year ended June 30, 2025. We believe that competitive sources are readily available for substantially all of the products we require
for our pharmaceutical distribution businesses. As such, we believe that we can change suppliers without any material interruption to
our business. To date, we have not experienced any significant difficulty in sourcing our suppliers.

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Technology

One of the ways in which we
deliver superior service to our customers is by empowering our employees with technology. Our industry is evolving, and customers tend
to de-risk their supply chains by forming relationships with reliable service providers that have invested in innovation.

We have built a highly scalable
proprietary technology platform on the cloud - the American Bear Logistics Data Tool Management Platform, which streamlines our variety
of service offerings and promotes our overall operating efficiency. Our technology platform, powered by sophisticated analytics of the
massive amounts of route and price data derived from the past provision of our solutions and services, (i) optimizes the route-building
and pricing for both our cross-border freight forwarding and domestic ground transportation services, (ii) allows for automated, real-time
fee quotes for our cross-border ocean freight solutions and airfreight solutions between almost any origin and destination ports at any
time and (iii) provides for automatic contractual account management, document generation and recordkeeping.

In addition, for our two regional
warehousing and distribution centers, we developed an intelligent warehousing system which allows us to manage our storage remotely, prevents
stockouts and overstocking and enables intelligent replenishment and order fulfilment. For example, this warehousing system automatically
sends alerts when inventory levels reach predetermined thresholds, ensuring timely restocking and promoting operational efficiency.

We have developed reliable
and stable network infrastructure to ensure high availability and a low risk of downtime. We primarily utilize third-party cloud service
providers to host our network infrastructure for core operational functionality, data backup, and intelligence application.

We process a large amount
of freight-related data on our platform. We take the privacy of personal data and confidential information seriously and have implemented
an internal data security management policy. We also utilize a system of firewalls to prevent unauthorized access to our internal systems.
Our technology department monitors the performance of our websites, technology systems and network infrastructure and responds promptly
to potential problems. We also review, improve and iterate our data privacy policies and security foundation on a continued basis.

Competition

The market for integrated
cross-border supply chain solution providers is a highly fragmented market with fierce competition. We face competition with other cross-border
supply chain solution providers, particularly those with a focus on the Asian market.

We compete primarily on the
following factors:

●customer relationships;

●caliber and quality of services;

●modes of transportation;

●technology infrastructure and capabilities; and

●industry experience and expertise.

We are well-positioned to
effectively compete based on the factors listed above. However, some of our current or future competitors may have greater financial or
operational resources, greater brand recognition, or a longer operating history, which could enable them to respond more quickly to changes
in market dynamics and customer demands and preferences, devoting greater resources towards seizing this market than we can.

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Sales and Marketing

We believe brand recognition
is critical to our ability to acquire or retain our existing or new customers, and our general marketing efforts are designed to enhance
our brand awareness and reputation among them. We primarily attract new customers with testimonials of our cross-border supply chain solutions
and referrals by our existing customers. We also approach prospective customers by attending international trade fairs, exhibitions and
conferences as well as events held by local chambers of commerce. We regularly conduct key performance indicator reviews with our customers
and take measures to maintain close rapport with them.

Intellectual Property

Our ability to obtain and
maintain intellectual property protection for our proprietary technology platform, preserve the confidentiality of our trade secrets,
and operate without violating the intellectual property rights of others is important to our success. We have adopted a number of measures
to protect our intellectual property and brand, including trademarks, confidentiality procedures, non-disclosure agreements and employee
non-disclosure agreements, to establish and protect our proprietary rights. Despite these efforts, there can be no assurance that we will
adequately protect our intellectual property.

As of June 30, 2025, we had
obtained the trademark registration for our key trademark, American Bear Logistics. In addition, we have registered domain names for websites
that we use in our business, such as www.americanbearlogistics.com.

Insurance

We maintain insurance for
commercial automobile and trucker’s liability, commercial general liability and cargo legal liability, as well as property coverage
with coverage limits, deductibles and self-insured retention levels that we believe are reasonable given the varying historical frequency,
severity and timing of claims.

Seasonality

Our revenue and profitability
in the fourth quarter are typically higher than those during the first, second and third quarters of the calendar year. We believe the
surge in the fourth quarter of the calendar year is in part due to the increase in demand experienced by many of our customers as a result
of the increased purchases during the holiday season, which leads to higher need for our supply chain solutions and services. It is not
possible to reliably predict whether our historical revenue and profitability trends will continue to occur in future periods.

Employees

Our people are key to our
success. As of June 30, 2025, we had a workforce of 94 full-time employees across various functions. None of our employees are represented
by labor unions or work under any collective bargaining agreements. We have not experienced any work stoppages, and we believe that our
employee relations are strong.

We work diligently to create
an equitable and inclusive work environment for our diverse group of people who are young, energetic, highly educated and multi-lingual.
We provide equal opportunities for growth, success, promotion, learning and development, and aim to achieve parity in the way we organize
and manage operations. We are focused on building support across all functions and individuals, ensuring everyone has a voice, and treats
each other with respect.

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Government Regulations

As a U.S.-based integrated
cross-border supply chain solution provider offering customized ocean freight solutions and airfreight solutions in the U.S. that specifically
cater to customers’ requirements and needs in transporting goods into the U.S., our operations are substantially governed by U.S.
laws and regulations. We are required to obtain certain licenses, permits and approvals from the relevant governmental authorities in
order to operate our business, including but not limited to licenses of an ocean transportation intermediary (sometimes referred to as
an NVOCC), an indirect air carrier, a container freight station, and licenses issued by the International Air Transport Association. To
the extent material to our understanding, as of the date of this report, we believe that we have obtained all licenses, permits and approvals
from the relevant governmental authorities necessary for our business operations in the U.S. Given the uncertainties of interpretation
and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, and the promulgation
of new laws and regulations and amendment to the existing ones, we may be required to obtain additional licenses, permits, registrations,
filings or approvals for our business operations in the future. We cannot assure you that we will be able to obtain, in a timely manner
or at all, or maintain such licenses, permits or approvals, and we or the affiliated entities may also inadvertently conclude that such
permissions or approvals are not required. Any lack of or failure to maintain requisite approvals, licenses or permits applicable to us
or the affiliated entities may have a material adverse impact on our business, results of operations, financial condition and prospects
and cause the value of any securities we offer to significantly decline or become worthless.

This section provides an overview
of the key regulations and legal considerations in the U.S. pertaining to our cross-border ocean freight solutions and cross-border airfreight
solutions. To the extent material to our understanding, we do not believe any current foreign governmental regulations impose material
restraints on our business operations as of the date of this report. We further acknowledge that in the course of our operations, we are
committed to complying with applicable data protection laws and regulations that govern the privacy and security of data it handles, which
are increasingly global in scope due to the nature of cross-border supply chain solutions.

Regulations Relating to Labor and Employment

Pursuant to federal and state
laws, we adhere to labor and employment laws at the federal and state levels. This includes fair employment practices, wage and hour regulations,
worker safety, and anti-discrimination law. We are committed to providing a fair and inclusive workplace environment that respects the
rights of our employees and fosters a culture of diversity and equality.

Regulations Regarding Cross-border Freight
Forwarding Services

Interstate and international
transportation of freight is highly regulated under U.S. law, and failure to comply with these regulations can have significant consequences,
including substantial fines or the revocation of operating permits and authorities for both transportation intermediaries and their shipper
customers. As a freight forwarder in operating the cross-border freight forwarding services by collaboration with the shipping carriers,
the regulations that currently impact our operations and those that may affect us in the future are as follows.

Air Freight Forwarding Services

In accordance with the Federal
Aviation Act enforced by the Federal Aviation Administration within the U.S. Department of Transportation, and the Transportation Security
Administration (the “TSA”) within the Department of Homeland Security (the “DHS”), an air freight forwarder is
classified as an indirect air cargo carrier. Even if air freight forwarders enjoy exemptions from the majority of the Federal Aviation
Act’s requirements through compliance with the Economic Aviation Regulations, the industry remains under the constant scrutiny of
evolving regulatory and legislative developments, and these developments have the potential to significantly impact the industry’s
economic landscape, necessitating adjustments to operational practices and exerting influence on both service demands and associated costs.
Regarding our involvement in the air transportation sector within the United States, we are subject to regulatory oversight by the TSA
within the DHS as an indirect air carrier. All indirect air carriers operating in the United States must adhere to mandated security protocols
and undergo periodic audits conducted by the TSA. According to Federal Code 71 FR 33255, each indirect air carrier must allow the TSA,
at any time or place, to make any inspections or tests, including copying records, to determine compliance of an airport operator, aircraft
operator, foreign air carrier, and indirect air carrier. At the request of the TSA, each indirect air carrier also has to provide evidence
of compliance with this subchapter and its indirect air carrier security program, including copies of records. The TSA may enter and be
present with in areas where security measures required by the TSA are carried out without access media or identification media issued
or approved by the indirect air carrier, an airport operator, or aircraft operator, in order to inspect or test compliance, or perform
other such duties as the TSA may direct.

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Ocean Freight Forwarding Services/NVOCC

As a licensed NVOCC, we fall
within the regulatory purview of the FMC, a regulatory authority that oversees and licenses ocean forwarding operations. This oversight
includes compliance with FMC tariff filing and surety bond mandates, as well as adherence to the Shipping Act of 1984, which contains
provisions that specifically prohibit rebating practices.

Pursuant to FMC rules, all
NVOCCs based in the U.S. and all international ocean freight forwarding agencies and their branches are required to obtain a license from
the FMC’s Bureau of Certification and Licensing by filing Form FMC-18. Entities engaging in international freight forwarding operations
or conducting business as NVOCCs who do not complete or maintain the filing may result in denial, revocation or suspension of an ocean
transportation intermediary license. We hold the license as an Ocean Transportation Intermediary (“OTI”), which is sometimes
interchangeably referred to as an NVOCC, and persons who operate without the proper license may be subject to civil penalties not to exceed
$9,000 for each violation. Additionally, the FMC has also established precise criteria for shipping agents, inclusive of specific surety
bonding prerequisites, and it is responsible for the economic regulation of OTI/NVOCC activity originating or terminating in the United
States as well. In order to comply with these economic regulations, OTI/NVOCC entities, such as our company, are mandated to electronically
submit tariffs, delineating the rates applicable to the transportation of specified commodities to and from the United States, and the
FMC possesses the authority to enforce these regulations, including the imposition of penalties for non-compliance.

Freight Forwarder Liability

Generally, the limitation
of liability of freight forwarders is identical to the international agreements that are applicable to carriers. There are multiple conventions
that restrict the carriers’ liability such as by setting as specific monetary limit per package or weight. For instance, ocean carriers
can incorporate the Carriage of Goods by Sea Act into their Bills of Lading to limit their liability to $500 per unit. The Montreal Convention
imposes a limit on the air carrier’s liability, capping it at a maximum of 22 special drawing rights per gross kilogram of the cargo
that has been lost or damaged.

Freight forwarder’s
liability also depends on their insurance coverage. In situations where goods get damaged or lost during transportation without an All
Risk Cargo Policy or if the shipper chooses not to initiate a claim, the shipper will seek damages from all parties engaged in the transportation
of goods, including carriers, warehouse operators, and the freight forwarders. If the insurance coverage is “All Risk,” then
the shipper will recover through the insurance. However, if the losses exceed the amount recovered, shippers will go after the outstanding
parties.

Furthermore, the extent of
a freight forwarder’s liability is determined by the roles it assumes. When a freight forwarder issues a House Bill of Lading stating
itself as the carrier, it assumes the role of principal, subjecting itself to the laws, regulations, and limitations applicable to carriers.
When a freight forwarder issues a House Bill of Lading designating the common carrier (not the freight forwarder) as the carrier, the
freight forwarder takes on the role of a broker or agent. In this scenario, the freight forwarder is often exempted from legal liabilities.

Forwarding agents must comply
with the Export Administration Regulations (the “EAR”), a set of United States export guidelines and prohibitions that regulate
the export restrictions of sensitive goods. It is essential to note that regardless of whether they are freight forwarders or other agents,
their involvement in various tasks does not exempt them from their compliance obligations. Agents are accountable for the representations
they make when filing export data. No individual, including an agent, may engage in any transaction if they have knowledge that it violates
the EAR, has the potential to violate it, or is intended to do so. Pursuant to the Supplement No. 1 to Part 732 of the EAR, agents and
exporters must assess the presence of red flags, exercise due diligence in investigating them, and ensure they do not overlook suspicious
circumstances. Neglecting these responsibilities could result in a violation of the EAR. Additionally, it’s worth noting that the
primary responsibility for EAR compliance rests with the principal parties in interest (the “PPI”) involved in a transaction.
The EAR stipulates that the U.S. PPI must provide the foreign PPI and its agent with the correct Export Control Classification Number
(the “ECCN”) or sufficient technical information to determine it, upon request. The U.S. PPI is obligated to furnish any information
that could impact the determination of licensing authority as well. Under the Foreign Trade Regulations (15 C.F.R. Part 30), the U.S.
PPI must supply specific data to the agent for electronic export information filing purposes.

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Further,
in a routed export transaction, the U.S. agent representing the foreign PPI is considered the “exporter” under the EAR. They
are responsible for determining licensing authority and obtaining the necessary license or authorization for the export. In such cases,
the agent representing the foreign PPI must obtain a power of attorney or written authorization to act on their behalf. However, if the
U.S. PPI fails to obtain the required authorization from the foreign PPI, they become the “exporter” and must handle licensing
authority and obtain the appropriate license, even in the context of a routed export transaction for electronic export information filing.
However, in a non-routed transaction, if the U.S. PPI authorizes an agent to prepare and file the export declaration on their behalf,
the U.S. PPI assumes the role of the “exporter” under the EAR. In this scenario, the U.S. PPI is obliged to: (i) provide the
agent with necessary information for the Automated Export System (the “AES”) submission, which is a system the U.S. exporters
use to electronically declare their international exports, known as the Electronic Export Information (the “EEI”), to the
Census Bureau to help compile U.S. export and trade statistics; (ii) authorize the agent to complete the AES submission through a power
of attorney or written authorization; and (iii) maintain documentation supporting the information provided to the agent for the AES submission.

If authorized by either the
U.S. or foreign PPI, the agent bears responsibility for: (i) preparing the AES submission based on information from the U.S. PPI; (ii)
maintaining documentation supporting the AES submission information; and (iii) furnishing a copy of the AES filing to the U.S. PPI upon
request. It is crucial to highlight that both the agent and the authorized PPI share responsibility for the accuracy of entries in an
AES submission. Agents should exercise caution in using “No License Required” designations and avoid unsupported entries.
In cases where agents lack technical expertise for commodity classifications, they should obtain supporting documentation for ECCNs.

Regarding documentation requirements
in EAR’s Part 762, which applies to all transactions subject to the EAR, it outlines records that must be maintained, those exempt
from maintenance, requirements for producing records, and the retention period. Additionally, various other recordkeeping requirements
apply, including those from Customs (19 CFR Part 163), the Department of State (ITAR and 22 CFR Part 122.5), the Census Bureau (15 CFR
30.66(c)), and Treasury’s OFAC (31 CFR Part 501). Further details on EAR rules and regulations applicable to freight forwarders
can be consulted in Sections 758.1 through 758.6, 748.4, and 750.7(d) within the EAR.

Regulations Relating to Cargo Examinations

One of the integral functions
performed by freight forwarders is to handle customs examinations. Regulations enforced by CBP mandate that all cargo entering the U.S.
from any foreign territories undergo physical examination by the U.S. government to ensure compliance with U.S. laws and regulations.
Under the Title 19 of the United State Code (19 U.S.C.), CBP is authorized to inspect, examine and search all goods entering the U.S.,
including but not limited to cargo transported by air, sea, land, or mail. CBP facilitates this process through the use of an electronic
system, allowing importers, brokers, and other trade partners to submit data and documentation, as well as providing the cargo information,
including entry summaries and customs declarations to CBP. Additionally, the TSA established rules for air cargo security, mandating screening
and inspection to mitigate the potential threats. Pursuant to 49 CFR part 1549, TSA-certified cargo screening facilities across the United
States to screen cargo before it is transported on passenger flights. Certified facilities must adhere to strict security programs and
chain of custody requirements to secure cargo from screening until it is loaded onto passenger aircraft.

Regulations Regarding Warehousing and Distribution
Services

Container Freight Stations (“CFS”)
Regulations

Our operations encompass warehousing
and distribution services conducted within our regional warehousing and distribution centers. We own a CFS, which is licensed and certified
by U.S. Customs. CFS facilities are an integral part of the logistics and shipping industry, where cargo containers are consolidated,
deconsolidated, and temporarily stored during the import and export process. Besides consolidation and storage, CFS provide aspect rum
of supplementary services, including documentation, custom examination, export clearance procedure. CFS facilities often handle imported
and exported goods, so they must comply with customs regulations specific to the country or region in which they are located. This can
include procedures for customs clearance, documentation, and security measures to prevent smuggling and ensure compliance with trade laws.

Pursuant to 19 CFR Part 19,
the establishment of a container station, independent of the importing carrier, is subject to application submission and approval by the
port director. Additionally, a Customs Form 301 must be filed, featuring bond conditions as stipulated in § 113.63 of such chapter,
with the bond amount determined by the port director. Any alterations to or relocation of a container station require permission from
the relevant port director. Furthermore, an application fee will be assessed by customs, with charges based on the average time required
by customs officers to perform the service.

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For containerized cargo, whether
it needs transportation from the point of unloading to a designated container station or is received directly at the container station
from a bonded carrier following in-bond transportation, an entry of merchandise must be filed. Permission is sought for the purpose of
breaking bulk and redelivery of the cargo. In addition, concerning the transfer of containers, our container station operator must file
an application for the transfer of merchandise with the customs authorities or customs inspector at the location where the container is
unloaded, or for merchandise transported in-bond, at the designated facility of the bonded carrier as determined by the port director.
Such filings must adhere to the prescribed format as per regulations. As outlined in 39 FR 4876, when the container station operator utilizes
their own vehicle to transfer merchandise to their station, the merchandise may only be transferred by a bonded cartman or bonded carrier.
The station operator, cartman, or carrier must issue a receipt for the merchandise on both copies of the application.

Regulations of Transportation Security Administration

Pursuant to 49 CFR part 1548,
we, as an indirect air carrier, must adopt and carry out a TSA-approved security program that meets current TSA requirements and is renewed
annually. TSA principal security inspectors are the primary point of contact for the application process and approval of certification.
Moreover, the TSA requires us to conduct known shipper programs and as the TSA’s known shipper management system requires, we must
comply with a range of specific security requirements to qualify our clients as known shippers.

Regulations Relating to Intellectual Property,
Data Protection and Security

In the rapidly digitizing
landscape of supply chains, data protection has emerged as a significant challenge for the logistics sector. The Privacy Act of 1974 and
the General Data Protection Regulation (the “GDPR”) have been enacted to ensure data privacy, regulatory frameworks and laws
in order to safeguard this valuable information. Companies like us now shoulder the added responsibility of overseeing the proper collection
and utilization of the vast volumes of customer data circulating within the logistics supply chain.

The Privacy Act of 1974, with
amendments up to the present day, including Statutory Notes (5 U.S.C.552a), plays a vital role in protecting records about individuals,
retrieved by personal identifiers such as names, social security numbers, or other identifying information. It dictates how federal agencies
collect and use data related to individuals in their records systems. The act unequivocally bars agencies from disclosing personal information
without written consent from the individual, except under specific circumstances, such as for statistical purposes by the Census Bureau.
Individuals also retain the right to access their records, request corrections if inaccuracies exist, and demand protection against unwarranted
invasions of their privacy. Additionally, we also recognize the importance of data privacy and security and comply with applicable regulations,
including the GDPR, where applicable. Companies implement measures to safeguard customer and employee data, ensuring proper collection,
storage, and usage practices. Non-compliance with these regulations carries the potential for legal consequences that could impact the
company’s operations and financial performance. We are unwavering in our commitment to upholding the highest standards of regulatory
compliance to ensure the long-term success and sustainability of our business operations.

Third-Party Logistics Providers,
or 3PLs, like us, commonly find themselves privy to sensitive or confidential information about shippers or carriers, often protected
by statutes or contractual agreements. Even in cases where no negligence is involved, 3PLs can be held accountable for disclosing such
private and safeguarded information. Given their substantial involvement in a shipper’s operations while providing logistics services,
contracts between shippers and 3PLs often incorporate confidentiality provisions. These provisions are essential safeguards to protect
the integrity of sensitive data in the complex landscape of logistics, where trust and security are paramount.

Regulations Relating to Distribution of
Pharmaceutical Products in China

According to the “Regulations on the Supervision and Administration
of the Quality of Pharmaceutical Operation and Use” implemented by the State Administration for Market Regulation of China in January
2024, the entity which is engaged in pharmaceutical wholesale or retail activities within the territory of the People’s Republic of China
should obtain the Pharmaceutical Operation License. The local departments of the National Medical Products Administration pharmaceutical
and the State Administration for Market shall supervise the daily operation of those entities through regular and casual inspections.
Those inspections are aiming at the whether the purchase, storage, sales and other operating activities of the pharmaceutical selling
entities are compliant with the related regulations. In August 2025, Hubei Pharmaceutical has passed an on-site inspection from Hubei
Administration for Market.

Available Information

Our website address is www.lakeside-holding.com
and our subsidiary’s website address is www.americanbearlogistics.com. The information on, or that can be accessed through,
our websites is not part of this report and is not incorporated by reference herein. We have included our websites address as inactive
textual reference only.

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