LC Logistics, Inc. announced that on November 6, 2023, the Company and AUKEY INTERNATIONAL Limited have entered into a strategic cooperation framework agreement (" Cooperation Framework Agreement"). Each party is committed to establishing a comprehensive and long-term partnership pursuant to the Cooperation Framework Agreement. Upon further negotiation, the Company and AUKEY will closely cooperate to leverage the mutual advantages, actively making use of the market resources and team operation and management experience to achieve a shared success in overseas warehouse business.

The Company will construct a suitable cooperative warehouse in the United States and set up an overseas warehouse business operation team to carry out overseas warehouse business for cross-border e-commerce to provide AUKEY with services such as overseas warehousing management, drop shipping, transit, return and after-sales services. The scope of cooperation between the Company and AUKEY mainly revolves around the business layout and strategic planning of the overseas warehouse market in the United States. Pursuant to the Cooperation Framework Agreement, the target for the second phase is subject to the target of the first phase after the signing of the legally binding formal agreement, expecting to be realized in 2024 in batches with the total investment of USD 15 million for the first phase.

The overseas warehouse will be located in Los Angeles or New York. The construction period of the first phase of the first phase of the overseas warehouse is 12 months. For the investment plan, the first contribution of USD 7.5 million is expected to be in place by January 2024 and will base on the actual needs of progress of the warehouse implementation; and the second contribution of $7.5 million will be made after the completion of the first warehouse, base on the result achieved and the progress of the needs to open the second warehouse.

The Company has been actively exploring new business opportunities to diversify its revenue streams and ultimately maximize the return to the shareholders of the Company. The Board believes that the Company will leverage its advantages in full and explore more business opportunities and profit potential for the Company. The Board is of the view that the terms of the Cooperation Framework Agreement were determined after arm's length negotiation between the parties and are fair and reasonable and in the interests of the Company and its shareholders as a whole.

The Board expects that such cooperation, if implemented, will provide the Company with good business opportunities to leverage its resources and insights to expand the revenue base of the Company and diversify its business. Both parties will leverage on their respective strengths to achieve project cooperation in the stages of project development, investment, research and operation by means of mutual benefit and sharing of resources.