# EDGAR Filing Document

**Accession Number:** 0001863218
**File Stem:** 0001213900-26-035301
**Filing Date:** 2026-3
**Character Count:** 1437717
**Document Hash:** 50e640fc96cd02552adbb224edc4260b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-035301.hdr.sgml**: 20260327

**ACCESSION NUMBER**: 0001213900-26-035301

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 133

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260327

**DATE AS OF CHANGE**: 20260327

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SHENGFENG DEVELOPMENT Ltd
- **CENTRAL INDEX KEY:** 0001863218
- **STANDARD INDUSTRIAL CLASSIFICATION:** TRUCKING & COURIER SERVICES (NO AIR) [4210]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41674
- **FILM NUMBER:** 26803558

**BUSINESS ADDRESS:**
- **STREET 1:** SHENGFENG BUILDING
- **STREET 2:** NO. 478 FUXIN EAST ROAD, JINAN DISTRICT
- **CITY:** FUZHOU CITY
- **STATE:** F4
- **ZIP:** 350001
- **BUSINESS PHONE:** 86-591-83619860

**MAIL ADDRESS:**
- **STREET 1:** SHENGFENG BUILDING
- **STREET 2:** NO. 478 FUXIN EAST ROAD, JINAN DISTRICT
- **CITY:** FUZHOU CITY
- **STATE:** F4
- **ZIP:** 350001

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 20-F**

☐ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2025**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☐ **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

Date of event requiring this shell company report

**For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to** &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Commission file number: 001-41674

**Shengfeng Development Limited**

(Exact name of Registrant as specified in its charter)

**N/A**

(Translation of Registrant's name into English)

**Cayman Islands**

(Jurisdiction of incorporation or organization)

 **Shengfeng Building, No. 478 Fuxin East Road Jin'an District, Fuzhou City Fujian Province, People's Republic of China, 350001 +86-591-83619860**

(Address of principal executive offices)

**Guoping Zheng, Chief Financial Officer**

**Telephone: +86-591-83619860**

**Email: guoping.zheng@sfwl.com.cn**

**At the address of the Company set forth above**

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Copies to:

**Charlotte Westfall, Esq. Rimon P.C.**

**800 Oak Grove Avenue, Suite 250** 

**Menlo Park, CA 94025**

**Phone: +1 415.869.7180**

**Securities registered or to be registered pursuant to Section 12(b) of the Act.**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| **Class A Ordinary Shares** | **SFWL** | **The Nasdaq Capital Market** |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act.

**None**

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

**None**

(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or stock as of the close of the period covered by the annual report.

**40,617,513 Class A Ordinary Shares, par value $0.0001 per share**

**41,880,000 Class B Ordinary Shares, par value $0.0001 per share**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

&nbsp;&nbsp;&nbsp;&nbsp;**†** The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐

\* If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 **<u>**TABLE OF CONTENTS**</u>**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| [ABOUT THIS ANNUAL REPORT](#a_001) | [ABOUT THIS ANNUAL REPORT](#a_001) | iii |
| [PRESENTATION OF FINANCIAL INFORMATION](#a_002) | [PRESENTATION OF FINANCIAL INFORMATION](#a_002) | iv |
| [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](#a_003) | [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](#a_003) | iv |
| [PART I](#a_004) | [PART I](#a_004) | 1 |
| &nbsp;&nbsp;&nbsp;[Item 1. Identity of Directors, Senior Management and Advisers.](#a_005) | &nbsp;&nbsp;&nbsp;[Item 1. Identity of Directors, Senior Management and Advisers.](#a_005) | 1 |
| &nbsp;&nbsp;&nbsp;[Item 2. Offer Statistics and Expected Timetable.](#a_006) | &nbsp;&nbsp;&nbsp;[Item 2. Offer Statistics and Expected Timetable.](#a_006) | 1 |
| &nbsp;&nbsp;&nbsp;[Item 3. Key Information.](#a_007) | &nbsp;&nbsp;&nbsp;[Item 3. Key Information.](#a_007) | 1 |
| A. | [\[Reserved\]](#a_008) | 20 |
| B. | [Capitalization and Indebtedness.](#a_009) | 20 |
| C. | [Reasons for the Offer and Use of Proceeds.](#a_010) | 20 |
| D. | [Risk Factors.](#a_011) | 20 |
| &nbsp;&nbsp;&nbsp;[Item 4. Information on the Company.](#a_012) | &nbsp;&nbsp;&nbsp;[Item 4. Information on the Company.](#a_012) | 61 |
| A. | [History and Development of the Company.](#a_013) | 61 |
| B. | [Business Overview.](#a_014) | 61 |
| C. | [Organizational Structure.](#a_015) | 100 |
| D. | [Property, Plants and Equipment.](#a_016) | 100 |
| &nbsp;&nbsp;&nbsp;[Item 4A. Unresolved Staff Comments.](#a_017) | &nbsp;&nbsp;&nbsp;[Item 4A. Unresolved Staff Comments.](#a_017) | 100 |
| &nbsp;&nbsp;&nbsp;[Item 5. Operating and Financial Review and Prospects.](#a_018) | &nbsp;&nbsp;&nbsp;[Item 5. Operating and Financial Review and Prospects.](#a_018) | 100 |
| A. | [Operating Results.](#a_019) | 100 |
| B. | [Liquidity and Capital Resources.](#a_020) | 109 |
| C. | [Research and Development, Patents and Licenses, etc.](#a_021) | 111 |
| D. | [Trend Information.](#a_022) | 111 |
| E. | [Critical Accounting Estimates.](#a_023) | 111 |
| &nbsp;&nbsp;&nbsp;[Item 6. Directors, Senior Management and Employees.](#a_024) | &nbsp;&nbsp;&nbsp;[Item 6. Directors, Senior Management and Employees.](#a_024) | 112 |
| A. | [Directors and Senior Management.](#a_025) | 112 |
| B. | [Compensation.](#a_026) | 113 |
| C. | [Board Practices.](#a_027) | 113 |
| D. | [Employees.](#a_028) | 116 |
| E. | [Share Ownership.](#a_029) | 116 |
| F. | [Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation.](#a_030) | 117 |
| &nbsp;&nbsp;&nbsp;[Item 7. Major Shareholders and Related Party Transactions.](#a_031) | &nbsp;&nbsp;&nbsp;[Item 7. Major Shareholders and Related Party Transactions.](#a_031) | 117 |
| A. | [Major Shareholders.](#a_032) | 117 |
| B. | [Related Party Transactions.](#a_033) | 117 |
| C. | [Interests of Experts and Counsel.](#a_034) | 119 |
| &nbsp;&nbsp;&nbsp;[Item 8. Financial Information.](#a_035) | &nbsp;&nbsp;&nbsp;[Item 8. Financial Information.](#a_035) | 119 |
| A. | [Consolidated Statements and Other Financial Information.](#a_036) | 119 |
| B. | [Significant Changes.](#a_037) | 120 |
| &nbsp;&nbsp;&nbsp;[Item 9. The Offer and Listing.](#a_038) | &nbsp;&nbsp;&nbsp;[Item 9. The Offer and Listing.](#a_038) | 120 |
| A. | [Offer and Listing Details.](#a_039) | 120 |
| B. | [Plan of Distribution.](#a_040) | 120 |
| C. | [Markets.](#a_041) | 120 |
| D. | [Selling Shareholders.](#a_042) | 120 |
| E. | [Dilution.](#a_043) | 120 |
| F. | [Expenses of the Issuer.](#a_044) | 120 |

---

i

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;[Item 10. Additional Information.](#a_045) | &nbsp;&nbsp;&nbsp;[Item 10. Additional Information.](#a_045) | 120 |
| A. | [Share Capital.](#a_046) | 120 |
| B. | [Memorandum and Articles of Association.](#a_047) | 120 |
| C. | [Material Contracts.](#a_048) | 120 |
| D. | [Exchange Controls.](#a_049) | 120 |
| E. | [Taxation.](#a_050) | 121 |
| F. | [Dividends and Paying Agents.](#a_051) | 128 |
| G. | [Statement by Experts.](#a_052) | 128 |
| H. | [Documents on Display.](#a_053) | 128 |
| I. | [Subsidiary Information.](#a_054) | 128 |
| J. | [Annual Report to Security Holders.](#a_055) | 128 |
| &nbsp;&nbsp;&nbsp;[Item 11. Quantitative and Qualitative Disclosures About Market Risk.](#a_056) | &nbsp;&nbsp;&nbsp;[Item 11. Quantitative and Qualitative Disclosures About Market Risk.](#a_056) | 128 |
| &nbsp;&nbsp;&nbsp;[Item 12. Description of Securities Other than Equity Securities.](#a_057) | &nbsp;&nbsp;&nbsp;[Item 12. Description of Securities Other than Equity Securities.](#a_057) | 130 |
| A. | [Debt Securities.](#a_058) | 130 |
| B. | [Warrants and Rights.](#a_059) | 130 |
| C. | [Other Securities.](#a_060) | 130 |
| D. | [American Depositary Shares.](#a_061) | 130 |
| [PART II](#a_062) | [PART II](#a_062) | 131 |
| &nbsp;&nbsp;&nbsp;[Item 13. Defaults, Dividend Arrearages and Delinquencies.](#a_063) | &nbsp;&nbsp;&nbsp;[Item 13. Defaults, Dividend Arrearages and Delinquencies.](#a_063) | 131 |
| &nbsp;&nbsp;&nbsp;[Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.](#a_064) | &nbsp;&nbsp;&nbsp;[Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.](#a_064) | 131 |
| &nbsp;&nbsp;&nbsp;[Item 15. Controls and Procedures.](#a_065) | &nbsp;&nbsp;&nbsp;[Item 15. Controls and Procedures.](#a_065) | 131 |
| &nbsp;&nbsp;&nbsp;[Item 16. \[Reserved\]](#a_066) | &nbsp;&nbsp;&nbsp;[Item 16. \[Reserved\]](#a_066) | 132 |
| &nbsp;&nbsp;&nbsp;[Item 16.A. Audit Committee Financial Expert.](#a_067) | &nbsp;&nbsp;&nbsp;[Item 16.A. Audit Committee Financial Expert.](#a_067) | 132 |
| &nbsp;&nbsp;&nbsp;[Item 16.B. Code of Ethics.](#a_068) | &nbsp;&nbsp;&nbsp;[Item 16.B. Code of Ethics.](#a_068) | 133 |
| &nbsp;&nbsp;&nbsp;[Item 16.C. Principal Accountant Fees and Services.](#a_069) | &nbsp;&nbsp;&nbsp;[Item 16.C. Principal Accountant Fees and Services.](#a_069) | 133 |
| &nbsp;&nbsp;&nbsp;[Item 16.D. Exemptions from the Listing Standards for Audit Committees.](#a_070) | &nbsp;&nbsp;&nbsp;[Item 16.D. Exemptions from the Listing Standards for Audit Committees.](#a_070) | 133 |
| &nbsp;&nbsp;&nbsp;[Item 16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.](#a_071) | &nbsp;&nbsp;&nbsp;[Item 16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.](#a_071) | 133 |
| &nbsp;&nbsp;&nbsp;[Item 16.F. Change in Registrant's Certifying Accountant.](#a_072) | &nbsp;&nbsp;&nbsp;[Item 16.F. Change in Registrant's Certifying Accountant.](#a_072) | 133 |
| &nbsp;&nbsp;&nbsp;[Item 16.G. Corporate Governance.](#a_073) | &nbsp;&nbsp;&nbsp;[Item 16.G. Corporate Governance.](#a_073) | 133 |
| &nbsp;&nbsp;&nbsp;[Item 16.H. Mine Safety Disclosure.](#a_074) | &nbsp;&nbsp;&nbsp;[Item 16.H. Mine Safety Disclosure.](#a_074) | 134 |
| &nbsp;&nbsp;&nbsp;[Item 16.I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](#a_075) | &nbsp;&nbsp;&nbsp;[Item 16.I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](#a_075) | 135 |
| &nbsp;&nbsp;&nbsp;[Item 16.J. Insider Trading Policies.](#a_076) | &nbsp;&nbsp;&nbsp;[Item 16.J. Insider Trading Policies.](#a_076) | 135 |
| &nbsp;&nbsp;&nbsp;[Item 16.K. Cybersecurity.](#a_077) | &nbsp;&nbsp;&nbsp;[Item 16.K. Cybersecurity.](#a_077) | 135 |
| [PART III](#a_078) | [PART III](#a_078) | 136 |
| &nbsp;&nbsp;&nbsp;[Item 17. Financial Statements.](#a_079) | &nbsp;&nbsp;&nbsp;[Item 17. Financial Statements.](#a_079) | 136 |
| &nbsp;&nbsp;&nbsp;[Item 18. Financial Statements.](#a_080) | &nbsp;&nbsp;&nbsp;[Item 18. Financial Statements.](#a_080) | 136 |
| &nbsp;&nbsp;&nbsp;[Item 19. Exhibits.](#a_081) | &nbsp;&nbsp;&nbsp;[Item 19. Exhibits.](#a_081) | 136 |
| [SIGNATURES](#a_082) | [SIGNATURES](#a_082) | 138 |

---

ii

**ABOUT THIS ANNUAL REPORT**

In this annual report on Form 20-F, unless the context otherwise requires, references to:

● "Affiliated Entities" are to our subsidiaries and Shengfeng Logistics (defined below) and the VIE's subsidiaries (defined below);

● "China" or the "PRC" are to the People's Republic of China, and "mainland China", unless otherwise specified herein, are to the People's Republic of China excluding, for the purpose of this annual report only, Taiwan, the Hong Kong Special Administrative Region, and the Macau Administrative Region;

● "Class A Ordinary Shares" are to Class A ordinary shares of Shengfeng Cayman (defined below), par value $0.0001 per share;

● "Class B Ordinary Shares" are to Class B ordinary shares of Shengfeng Cayman, par value $0.0001 per share;

● "Our subsidiaries" are to Shengfeng HK (defined below) and Tianyu (defined below), Singularity Digital (defined below), Shengfeng Viet Nam (defined below), each a subsidiary of Shengfeng Cayman;

● "RMB" are to the legal currency of China;

● "Shengfeng HK" are to our wholly owned subsidiary, Shengfeng Holding Limited, a Hong Kong corporation;

● "Shengfeng Logistics" or "the VIE" are to Shengfeng Logistics Group Co., Ltd., a limited liability company organized under the laws of the PRC, which we control via a series of contractual arrangements among Tianyu (defined below), Shengfeng Logistics, and shareholders of Shengfeng Logistics;

● "Shengfeng WFOE," "Tianyu," or "our PRC subsidiary" are to Tianyu Shengfeng Logistics Group Co., Ltd., a limited liability company organized under the laws of the PRC, which is wholly owned by Shengfeng HK;

● "Singularity Digital" are to our wholly owned subsidiary, Singularity Digital Technology Co., Ltd., a Cayman Islands company;

● "Shengfeng Viet Nam" are to our wholly owned subsidiary Shengfeng (Viet Nam) International Supply Chain Co., Ltd., a Vietnam corporation;

● "U.S. dollars," "$," and "dollars" are to the legal currency of the United States;

● "VIE's subsidiaries" are to the 46 subsidiaries of Shengfeng Logistics as listed in "Item 3. Key Information—Our Corporate Structure;"

● "we," "us," "our," "Shengfeng Cayman," "our Company," or the "Company" are to Shengfeng Development Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands on July 16, 2020 with registered company number 364401; and

● "WFOE" are to wholly foreign-owned enterprise.

iii

**PRESENTATION OF FINANCIAL INFORMATION**

The functional currency of Shengfeng Logistics, the VIE in the PRC, and the VIE's subsidiaries and branch offices, is Renminbi ("RMB"), the currency of China. Our consolidated financial statements are presented in U.S. dollars. In this annual report, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in U.S. dollars. These dollar references are based on the exchange rate of RMB to U.S. dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets, including accounts receivable (expressed in dollars).

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

This annual report contains statements of a forward-looking nature. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements are made under the "safe harbor" provision under Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and as defined in the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions.

These forward-looking statements relate to, among others:

● our goal and strategies;

● our expansion plans;

● our future business development, financial condition and results of operations;

● our expectations regarding demand for, and market acceptance of, our products; and

● general economic and business conditions.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

You should read these statements in conjunction with the risks disclosed in "Item 3. Key Information—D. Risk Factors" of this annual report and other risks outlined in our other filings with the Securities and Exchange Commission, or the SEC. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this annual report and the documents that we have referred to in this annual report, completely and with the understanding that our actual future results may be materially different from what we expect.

iv

**Part I**

**Item 1. Identity of Directors, Senior Management and Adviser**

Not Applicable.

**Item 2. Offer Statistics and Expected Timetable**

Not Applicable.

**Item 3. Key Information**

**Our Corporate History**

We began our operations in 2001 through Shengfeng Logistics, a limited liability company established pursuant to PRC laws. Shengfeng Logistics formed or controlled 31 majority owned/wholly owned subsidiaries pursuant to PRC laws.

In connection with our initial public offering ("IPO"), which was completed on April 4, 2023, we undertook a reorganization of our corporate structure (the "Reorganization") in the following steps:

● On July 16, 2020, we incorporated Shengfeng Cayman under the laws of the Cayman Islands;

● On August 18, 2020, we incorporated Shengfeng HK in Hong Kong as a wholly owned subsidiary of Shengfeng Cayman;

● On December 16, 2020, we incorporated Tianyu pursuant to PRC laws as a WFOE and a wholly owned subsidiary of Shengfeng HK;

● On December 18, 2020, our Company and our shareholders undertook a series of corporate actions, including an amendment and a subdivision of our share capital, among others. See "*—* History of Share Issuances" below; and

● On January 7, 2021, Tianyu entered into a series of contractual arrangements with Shengfeng Logistics and its shareholders, through which Tianyu has gained full control over the management and receives the economic benefits of Shengfeng Logistics. For more details, see "—Our VIE Agreements."

Our shares and per share data as of December 31, 2025 and 2024 have been presented on a retroactive basis to reflect the Reorganization.

On September 12, 2025, we incorporated a wholly owned subsidiary Singularity Digital Technology Co., Ltd. ("Singularity Digital") under the laws of the Cayman Islands. Singularity Digital will be engaged in software and technology consulting, including enterprise digitalization solutions and related technical services.

On November 26, 2025, we incorporated a wholly owned subsidiary Shengfeng (Viet Nam) International Supply Chain Co., Ltd. ("Shengfeng Viet Nam") under the laws of Vietnam. Shengfeng Viet Nam will provide transportation and warehouse storage management service.

History of Share Issuances

The following is a summary of our share issuances since incorporation.

On July 16, 2020, Quality Corporate Services Ltd., the subscriber to our memorandum of association, initially subscribed for and was issued 1 ordinary share, par value $1.00, which was subsequently transferred to Shengfeng International Limited on the same date. Also on July 16, 2020, we issued 49,999 ordinary shares, par value $1.00 per share, to Shengfeng International Limited, of which 6,000 ordinary shares were transferred to Everbright International Development Limited on September 29, 2020.

On December 18, 2020, we undertook the following corporate actions:

&nbsp;&nbsp;&nbsp;&nbsp;(i) a repurchase of 43,999 ordinary shares held by Shengfeng International Limited and 6,000 ordinary shares held by Everbright International Development Limited;

(ii) an amendment of our share capital from $50,000 divided into 50,000 ordinary shares of $1.00 par value per share to $50,000 divided into 40,000 Class A Ordinary Shares of $1.00 par value per share and 10,000 Class B Ordinary Shares of $1.00 par value per share;

(iii) a re-designation of one issued ordinary share held by Shengfeng International Limited into one Class B Ordinary Share; and

(iv) a subdivision of our share capital from $50,000 divided into 40,000 Class A Ordinary Shares of $1.00 par value per share and 10,000 Class B Ordinary Shares of $1.00 par value per share to US$50,000 divided into 400,000,000 Class A Ordinary Shares of $0.0001 par value per share and 100,000,000 Class B Ordinary Shares of $0.0001 par value per share.

On December 18, 2020, we issued an aggregate of 38,120,000 Class A Ordinary Shares to 12 investors for an aggregate consideration of $3,812.

On December 18, 2020, we issued 41,870,000 Class B Ordinary Shares to Shengfeng International Limited for a consideration of $4,187. After such issuance and as of the date of this annual report, Shengfeng International Limited holds an aggregate of 41,880,000 of our Class B Ordinary Shares.

On April 4, 2023, we completed our IPO of 2,400,000 Class A Ordinary Shares at a public offering price of $4.00 per share. The net proceeds raised from the IPO were approximately $8.5 million after deducting underwriting discounts and the offering expenses payable by us. In connection with the IPO, we issued to Univest Securities, LLC, as the representative of the underwriters, a warrant that is exercisable for a period of one year after the effective date of the registration statement, entitling the holder of the warrant to purchase an aggregate of up to 144,000 Class A Ordinary Shares at a per share price of $4.46.

On October 25, 2023, we issued 97,513 Class A Ordinary Shares to Univest Securities, LLC, as it fully and cashlessly exercised its warrant with a cost basis of $13.815 per share on October 19, 2023.

**Our Corporate Structure**

Shengfeng Development Limited is a holding company incorporated in the Cayman Islands. As a holding company with no material operations of its own, its operations have been conducted in China by its subsidiaries and through certain contractual arrangements ("the VIE Agreements") with a VIE, Shengfeng Logistics and the VIE's subsidiaries. For accounting purposes, we control and receive the economic benefits of the VIE and the VIE's subsidiaries' business operations through the VIE Agreements, which enables us to consolidate the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statement under U.S. GAAP. Neither we nor our subsidiaries own any equity interests in the VIE or the VIE's subsidiaries.

The following diagram illustrates our corporate structure, including our subsidiaries and the VIE and the VIE's subsidiaries, as of December 31, 2025.

![](ea028257901_img1.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;(1) As of the date of this annual report, Shengfeng Logistics is held by Fujian Yunlian Shengfeng Industry Co., Ltd. (which is 90% owned by Yongxu Liu, who is our chief executive officer, chairman of the board and president), as to 54.58%, Yongxu Liu directly as to 30.99%, Zhoushan Zhongxin Equity Investment Partnership (Limited Partnership) as to 1.5%, Zhoushan Guancheng Equity Investment Partnership (Limited Partnership) as to 2%, Daqiu Tang as to 0.85%, Yelie Song as to 0.97%, Zhiping Yang as to 1.58%, Chaoxin Yang as to 0.96%, Guangsheng Lin as to 0.85%, Zhuangyuan Lin as to 2.59%, Zhongdeng Pan as to 2.13% and Yufan Chen as to 1%, who collectively hold 100% of the shares of Shengfeng Logistics. We refer to the above shareholders of Shengfeng Logistics as the "Shengfeng Logistics Shareholders."

For details of our principal shareholders' ownership, please refer to the beneficial ownership table in the section captioned "Item 6. Directors, Senior Management and Employees—E. Share Ownership."

Significant subsidiaries of Shengfeng Cayman and significant subsidiaries of Shengfeng Logistics, as that term is defined under Section 1-02 of Regulation S-X under the Securities Act, consist of the following entities:

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| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal<br> activities** |
| **1** | Shengfeng Holding Limited ("Shengfeng HK") | Hong Kong | August 18, 2020 | 100% | Investment holding of Tianyu |
| **2** | Tianyu Shengfeng Logistics Group Co., Ltd. ("Tianyu", formerly known as "Fujian Tianyu Shengfeng Logistics Co., Ltd ") | Fujian, the PRC | December 16, 2020 | 100% | Investment holding of Shengfeng VIE |
| **3** | Singularity Digital Technology Co., Ltd. | Cayman Islands | September 12, 2025 | 100% | Software and technology consulting |
| **4** | Shengfeng (Viet Nam) International Supply Chain CO., Ltd. | Vietnam | November 26, 2025 | 100% | Transportation and warehouse storage management service |

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|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal <br> activities** |
|  | **VIE and VIE's subsidiaries:** |  |  |  |  |
| **5** | Shengfeng Logistics Group Co., Ltd. ("Shengfeng VIE" or "Shengfeng Logistics") | Fujian, the PRC | December 7, 2001 | 100% | Transportation and warehouse storage management service |
| **6** | Fuqing Shengfeng Logistics Co., Ltd. | Fujian, the PRC | April 15, 2011 | 100% | Transportation and warehouse storage management service |
| **7** | Xiamen Shengfeng Logistics Co., Ltd. | Fujian, the PRC | December 22, 2011 | 100% | Transportation and warehouse storage management service |
| **8** | Guangdong Shengfeng Logistics Co., Ltd. | Guangdong, the PRC | December 30, 2011 | 100% | Transportation and warehouse storage management service |
| **9** | Hainan Shengfeng Supply Chain Management Co., Ltd. | Hainan, the PRC | August 18, 2020 | 51% | Transportation and warehouse storage management service |
| **10** | Beijing Tianyushengfeng E-commerce Technology Co., Ltd. | Beijing, the PRC | January 9, 2004 | 100% | Transportation and warehouse storage management service |
| **11** | Beijing Shengfeng Supply Chain Management Co., Ltd. | Beijing, the PRC | April 13, 2016 | 100% | Transportation and warehouse storage management service |
| **12** | Shengfeng Logistics (Guizhou) Co., Ltd. | Guizhou, the PRC | August 15, 2017 | 100% | Transportation and warehouse storage management service |
| **13** | Shengfeng Logistics (Tianjin) Co., Ltd. | Tianjin, the PRC | March 8, 2016 | 100% | Transportation and warehouse storage management service |
| **14** | Shengfeng Logistics (Shandong) Co., Ltd. | Shandong, the PRC | March 15, 2016 | 100% | Transportation and warehouse storage management service |
| **15** | Shengfeng Logistics Hebei Co., Ltd. | Hebei, the PRC | February 17, 2016 | 100% | Transportation and warehouse storage management service |
| **16** | Shengfeng Logistics (Henan) Co., Ltd. | Henan, the PRC | March 28, 2016 | 100% | Transportation and warehouse storage management service |
| **17** | Shengfeng Logistics (Liaoning) Co., Ltd. | Liaoning, the PRC | March 2, 2016 | 100% | Transportation and warehouse storage management service |
| **18** | Shengfeng Logistics (Yunnan) Co., Ltd. | Yunnan, the PRC | January 25, 2016 | 100% | Transportation and warehouse storage management service |
| **19** | Shengfeng Logistics (Guangxi) Co., Ltd. | Guangxi, the PRC | February 1, 2016 | 100% | Transportation and warehouse storage management service |
| **20** | Hubei Shengfeng Logistics Co., Ltd. | Hubei, the PRC | December 15, 2010 | 100% | Transportation and warehouse storage management service |
| **21** | Shengfeng Logistics Group (Shanghai) Supply Chain Management Co., Ltd. | Shanghai, the PRC | August 26, 2015 | 100% | Transportation and warehouse storage management service |
| **22** | Shanghai Shengxu Logistics Co., Ltd. | Shanghai, the PRC | June 4, 2003 | 100% | Transportation and warehouse storage management service |
| **23** | Hangzhou Shengfeng Logistics Co., Ltd. | Zhejiang, the PRC | June 10, 2010 | 100% | Transportation and warehouse storage management service |

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|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal<br> activities** |
| **24** | Nanjing Shengfeng Logistics Co., Ltd. | Jiangsu, the PRC | August 30, 2011 | 100% | Transportation and warehouse storage management service |
| **25** | Suzhou Shengfeng Logistics Co., Ltd. | Jiangsu, the PRC | January 14, 2005 | 90% | Transportation and warehouse storage management service |
| **26** | Suzhou Shengfeng Supply Chain Management Co., Ltd. | Jiangsu, the PRC | August 9, 2019 | 100% | Transportation and warehouse storage management service |
| **27** | Shengfeng Supply Chain Management Co., Ltd. | Fujian, the PRC | June 19, 2014 | 100% | Transportation and warehouse storage management service |
| **28** | Fuzhou Shengfeng Transportation Co., Ltd. | Fujian, the PRC | April 18, 2019 | 100% | Transportation and warehouse storage management service |
| **29** | Sichuan Shengfeng Logistics Co., Ltd. | Sichuan, the PRC | June 27, 2019 | 100% | Transportation and warehouse storage management service |
| **30** | Fujian Shengfeng Logistics Co., Ltd. | Fujian, the PRC | April 2, 2020 | 100% | Transportation and warehouse storage management service |
| **31** | Fujian Dafengche Information Technology Co. Ltd. | Fujian, the PRC | August 26, 2020 | 100% | Software engineering |
| **32** | Ningde Shengfeng Logistics Co. Ltd. | Fujian, the PRC | November 12, 2018 | 51% | Transportation and warehouse storage management service |
| **33** | Shengfeng Logistics (Zhejiang) Co., Ltd. | Zhejiang, the PRC | February 1, 2021 | 100% | Transportation and warehouse storage management service |
| **34** | Chengdu Shengfeng Supply Chain Management Co., Ltd. | Chengdu, the PRC | October 12, 2021 | 100% | Supply chain management service |
| **35** | Shengfeng Logistics Group (Ningde) Supply Chain Management Co., Ltd. | Fujian, the PRC | September 23, 2022 | 100% | Supply chain management service |
| **36** | Anhui Shengfeng Supply Chain Management Co., Ltd. | Anhui, the PRC | November 29, 2023 | 100% | Transportation and warehouse storage management service |
| **37** | Shenzhen Tianyu Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | May 19, 2023 | 100% | Transportation and supply chain management service |
| **38** | Ningbo Shengfeng Supply Chain Co., Ltd. | Zhejiang, the PRC | April 16, 2024 | 100% | Transportation and warehouse storage management service |
| **39** | Qingdao Shengfeng Supply Chain Co., Ltd. | Shandong, the PRC | April 22, 2024 | 100% | Transportation and warehouse storage management service |
| **40** | Zhongshan Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | May 15, 2024 | 100% | Transportation and warehouse storage management service |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal<br> activities** |
| **41** | Hunan Shengfeng Supply Chain Management Co., Ltd. | Hunan, the PRC | May 23, 2024 | 100% | Transportation and warehouse storage management service |
| **42** | Jiangxi Shengfeng Supply Chain Management Co., Ltd. | Jiangxi, the PRC | May 24, 2024 | 100% | Transportation and warehouse storage management service |
| **43** | Dongguan Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | July 7, 2024 | 100% | Transportation and warehouse storage management service |
| **44** | Langfang Shengfeng Logistics Co., Ltd. | Hebei, the PRC | August 27, 2024 | 100% | Transportation and warehouse storage management service |
| **45** | Liaoning Tianyu Changsheng Supply Chain Management Co., Ltd. | Liaoning, the PRC | October 16, 2024 | 66% | Transportation and warehouse storage management service |
| **46** | Chongqing Tianyu Shengfeng Supply Chain Management Co., Ltd. | Chongqing, the PRC | October 21, 2024 | 100% | Transportation and supply chain management service |
| **47** | Fujian Shengfeng Fulai Low Altitude Comprehensive Service Co., Ltd. | Fujian, the PRC | November 7, 2024 | 51% | Transportation and cargo packaging service |
| **48** | Fujian Shengfeng Zhuoyue Shipping Engineering Technology Co., Ltd. | Fujian, the PRC | December 9, 2024 | 51% | Technical services and development |
| **49** | Zhangzhou Shengfeng Logistics Co., Ltd. | Fujian, the PRC | May 14, 2025 | 100% | Transportation and warehouse storage management service |
| **50** | Luoyang Shengfeng Supply Chain Management Co., Ltd. | Luoyang, the PRC | August 1, 2025 | 100% | Transportation and warehouse storage management service |
| **51** | Heilongjiang Shengfeng Supply Chain Management Co., Ltd. | Heilongjiang, the PRC | September 26, 2025 | 100% | Transportation and warehouse storage management service |
|  | **Significant subsidiaries of Tianyu:** |  |  |  |  |
| **52** | Yichun Shengfeng Logistics Co., Ltd. | Jiangxi, the PRC | December 1, 2022 | 100% | Transportation and warehouse storage management service |
| **53** | Hubei Tianyu Shengfeng Logistics Co., Ltd | Hubei, the PRC | November 14, 2023 | 100% | Transportation and supply chain management service |

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**Our VIE Agreements**

Neither we nor our subsidiaries own any share in Shengfeng Logistics or the VIE's subsidiaries. Instead, for accounting purposes, we control and receive the economic benefits of Shengfeng Logistics' business operation through the VIE Agreements entered into by and among WFOE, Shengfeng Logistics and its shareholders on January 7, 2021, which enables us to consolidate the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statement under U.S. GAAP. The VIE Agreements are designed to provide Tianyu with the power, rights, and obligations to Shengfeng Logistics, including control rights and the rights to the assets, property, and revenue of Shengfeng Logistics, as set forth under the VIE Agreements. The VIE Agreements have not been tested in a court of law in China as of the date of this annual report and may not be effective in providing control over the VIE. We are, therefore, subject to risks due to the uncertainty of the interpretation and application of the laws and regulations of the PRC, regarding the VIE and the VIE structure, including, but not limited to, regulatory review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the contractual arrangements with the VIE.

We have evaluated the guidance in FASB ASC 810 and determined that we are regarded as the primary beneficiary of the VIE, for accounting purposes, as a result of our direct ownership in Tianyu and the provisions of the VIE Agreements. Accordingly, we treat the VIE and the VIE's subsidiaries as our consolidated entities under U.S. GAAP. We have consolidated the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.

Although we take every precaution available to effectively enforce the contractual and corporate relationship, the VIE structure has its inherent risks that may affect your investment, including less effectiveness and certainties than direct ownership and potential substantial costs to enforce the terms of the VIE Agreements. For example, Shengfeng Logistics and the Shengfeng Logistics Shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of Shengfeng Logistics, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Shengfeng Logistics, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current VIE Agreements, we rely on the performance by Shengfeng Logistics and the Shengfeng Logistics Shareholders of their respective obligations under the contracts to exercise control over Shengfeng Logistics. The Shengfeng Logistics Shareholders may not act in the best interests of our Company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements with Shengfeng Logistics. Furthermore, failure of the VIE shareholders to perform certain obligations could compel the Company to rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which may not be effective. Additionally, if any disputes relating to these contracts remain unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and arbitration, litigation, and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system and the Company may incur substantial costs to enforce the terms of the VIE Agreements. We, as a Cayman Islands holding company, may have difficulty in enforcing any rights we may have under the VIE Agreements with the VIE, its founders and owners, in PRC because all of our VIE Agreements are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, where legal environment in the PRC is not as developed as in the United States. Also, these VIE Agreements may not be enforceable in China if PRC government authorities or courts take a view that such VIE Agreements contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these VIE Agreements, we may not be able to exert effective control over Shengfeng Logistics, and our ability to conduct our business may be materially and adversely affected. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state. See "Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure" and "—D. Risk Factors—Risks Relating to Doing Business in the PRC" for more information. In particular, see "—D. Risk Factors—Risks Relating to Our Corporate Structure—Our VIE Agreements with Shengfeng Logistics and the Shengfeng Logistics Shareholders may not be effective in providing control over Shengfeng Logistics," "—D. Risk Factors—Risks Relating to Our Corporate Structure—The Shengfeng Logistics Shareholders have potential conflicts of interest with our Company which may adversely affect our business and financial condition," "—D. Risk Factors—Risks Relating to Our Corporate Structure—Our VIE Agreements are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements" and "—D. Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE's operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless."

Each of the VIE Agreements is described in detail below:

*<u>Exclusive Technical Consultation and Service Agreement</u>*

Pursuant to the Technical Consultation and Service Agreement between Shengfeng Logistics and Tianyu, Tianyu provides Shengfeng Logistics with consultation and services in the areas of funding, human, technology and intellectual properties, including, but not limited to, training and technical support, marketing consultation services, general advice and assistance relating to management and operation of Shengfeng Logistics' business, and other consultation and services which are necessary for Shengfeng Logistics' business, on an exclusive basis, utilizing its resources. For services rendered to Shengfeng Logistics by Tianyu under the Technical Consultation and Service Agreement, Tianyu is entitled to collect a service fee, or the "Service Fee." The Service Fees are composed of the basic annual fee, which is equal to 50% of the after-tax income of Shengfeng Logistics, and a floating fee, which shall not exceed the after-tax income after deducting paid basic annual fees. The floating fees shall be determined by both parties based on several factors including the number and the qualifications of the employees used by Tianyu, the time Tianyu spent on providing the services, the costs being paid for providing the services and the content, the value of the services provided and the operation revenue of Shengfeng Logistics.

The Technical Consultation and Service Agreement became effective on January 7, 2021 and will remain effective for 20 years. Such agreement can be extended if Tianyu provides its notice of extension to Shengfeng Logistics unilaterally prior to the expiration date of this agreement. Shengfeng Logistics shall use its best efforts to renew its business license and extend its operation term until and unless otherwise instructed by Tianyu.

The Technical Consultation and Service Agreement does not prohibit related party transactions. The Company's audit committee is required to review and approve in advance any related party transactions, including transactions involving Tianyu or Shengfeng Logistics.

*<u>Equity Pledge Agreement</u>*

Under the Equity Pledge Agreement by and among Tianyu, Shengfeng Logistics and the Shengfeng Logistics Shareholders, together holding 100% of the shares in Shengfeng Logistics, the Shengfeng Logistics Shareholders pledged their shares in Shengfeng Logistics to Tianyu to guarantee the performance of Shengfeng Logistics and/or Shengfeng Logistics Shareholders' obligations under the Technical Consultation and Service Agreement. Under the terms of the Equity Pledge Agreement, in the event that Shengfeng Logistics or the Shengfeng Logistics Shareholders breach their respective contractual obligations under the Technical Consultation and Service Agreement, Tianyu, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged shares. The Shengfeng Logistics Shareholders also agreed that upon occurrence of any event of default, as set forth in the Equity Pledge Agreement, Tianyu is entitled to dispose of the pledged shares in accordance with applicable PRC laws. The Shengfeng Logistics Shareholders further agreed not to assign the pledged shares prior to the full payment of the service fees.

The Equity Pledge Agreement is effective until the full payment of the service fees under the Technical Consultation and Service Agreement and upon termination of Shengfeng Logistics' obligations under the Technical Consultation and Service Agreement, or upon the transfer of shares of the Shengfeng Logistics Shareholders.

The purposes of the Equity Pledge Agreement are to (1) guarantee the performance of Shengfeng Logistics' obligations under the Technical Consultation and Service Agreement, (2) make sure the Shengfeng Logistics Shareholders do not transfer or assign the pledged shares, or create or allow any encumbrance that would prejudice Tianyu's interests without Tianyu's prior written consent, and (3) provide Tianyu control over Shengfeng Logistics under certain circumstances. In the event Shengfeng Logistics breaches its contractual obligations under the Technical Consultation and Service Agreement, Tianyu will be entitled to dispose of the pledged shares in accordance with relevant PRC laws.

As of the date of this annual report, the share pledges under the Equity Pledge Agreement have been registered with the competent PRC regulatory authority.

*<u>Exclusive Call Option Agreement</u>*

Under the Call Option Agreement, the Shengfeng Logistics Shareholders, together holding 100% of the shares in Shengfeng Logistics, irrevocably granted Tianyu (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their shares in Shengfeng Logistics in consideration of the payment of RMB1. The purchase price shall be the lowest price allowed by the laws of China.

Under the Call Option Agreement, Tianyu may at any time under any circumstances, purchase or have its designee purchase, at its discretion, to the extent permitted under PRC law, all or part of the Shengfeng Logistics Shareholders' shares in Shengfeng Logistics. The Call Option Agreement, together with the Equity Pledge Agreement, the Technical Consultation and Service Agreement, the Voting Rights Proxy Agreement, and the Shareholders' Powers of Attorney, enable Tianyu to exercise effective control over Shengfeng Logistics.

The Call Option Agreement remains effective until all the equity of Shengfeng Logistics is legally transferred under the name of Tianyu and/or other entity or individual designated by it.

*<u>Shareholders' Powers of Attorney</u>*

Under each of the Powers of Attorney, the Shengfeng Logistics Shareholders authorized Tianyu to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including, but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including, but not limited to, the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer, and other senior management members of Shengfeng Logistics.

The Powers of Attorney is irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the Shengfeng Logistics Shareholders are shareholders of Shengfeng Logistics.

*<u>Voting Rights Proxy Agreement</u>*

Pursuant to the Voting Rights Proxy Agreements, the Shengfeng Logistics Shareholders unconditionally and irrevocably entrust Tianyu or Tianyu's designee to exercise all their rights as shareholders of Shengfeng Logistics under the articles of association of Shengfeng Logistics, including without limitation to: (a) propose to hold a shareholders' meeting in accordance with the articles of association of Shengfeng Logistics and attend shareholders' meeting of Shengfeng Logistics as the agent and attorney of such shareholders; (b) exercise all shareholders' voting rights with respect to all matters to be discussed and voted in the shareholders' meeting of Shengfeng Logistics, including, but not limited to, the right to designate and appoint the director, the chief executive officer and other senior management members of Shengfeng Logistics; (c) exercise other voting rights the shareholders are entitled to under the laws of China promulgated from time to time; and (d) exercise other voting rights the shareholders are entitled to under the articles of associations of Shengfeng Logistics from time to time.

The Voting Rights Proxy Agreement became effective on January 7, 2021 and will remain effective for 20 years. Such agreement can be extended if Tianyu provides its notice of extension unilaterally prior to the expiration date of this agreement. All other parties shall agree with such extension without reserve.

*<u>Spousal Consent Letters</u>*

The spouses of certain of the Shengfeng Logistics Shareholders agreed, via a spousal consent letter, to the execution of certain of the VIE Agreements, including: (a) the Equity Pledge Agreement entered into with Tianyu and Shengfeng Logistics; (b) the Call Option Agreement entered into with Tianyu and Shengfeng Logistics; and (c) the Voting Rights Proxy Agreement entered into with Tianyu and Shengfeng Logistics, and the disposal of the shares of Shengfeng Logistics held by the Shengfeng Logistics Shareholders and registered in their names.

The spouses of certain of the Shengfeng Logistics Shareholders have further undertaken to not to make any assertions in connection with the shares of Shengfeng Logistics which are held by the Shengfeng Logistics Shareholders. The spouses of certain of the Shengfeng Logistics Shareholders have confirmed in spousal consent letters that the Shengfeng Logistics Shareholders can perform, amend, or terminate certain VIE Agreements without their authorization or consent and have agreed to execute all necessary documents and take all necessary actions to ensure appropriate performance of such VIE Agreements.

***Risks Associated with our Corporate Structure and the VIE Agreements***

Because we do not directly hold equity interests in the VIEs, we are subject to risks and uncertainties of the interpretations and applications of PRC laws and regulations, including but not limited to, regulatory review of overseas listing of PRC companies through special purpose vehicles and the validity and enforcement of the VIE Agreements. We are also subject to the risks and uncertainties about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations, and the value of our Class A Ordinary Shares may depreciate significantly or become worthless. The VIE Agreements have not been tested in a court of law in China as of the date of this annual report. See "—D. Risk Factors—Risks Relating to Our Corporate Structure," "—D. Risk Factors—Risks Relating to Doing Business in the PRC," and "—D. Risk Factors—Risks Relating to Our Class A Ordinary Shares and the Trading Market."

The VIE Agreements may not be as effective as direct ownership in providing operational control. For instance, the VIE and the VIE's subsidiaries could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. The VIE and the VIE's subsidiaries may not act in the best interests of our Company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements. In the event that the VIE or the VIE's subsidiaries fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. In addition, even if legal actions are taken to enforce such arrangements, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state. See "—D. Risk Factors—Risks Relating to Our Corporate Structure—Our VIE Agreements with Shengfeng Logistics and the Shengfeng Logistics Shareholders may not be effective in providing control over Shengfeng Logistics," "—D. Risk Factors—Risks Relating to Our Corporate Structure—The Shengfeng Logistics Shareholders have potential conflicts of interest with our Company which may adversely affect our business and financial condition," "—D. Risk Factors—Risks Relating to Our Corporate Structure—Our VIE Agreements are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements" and "—D. Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE's operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless."

***Risks Associated with being based in the PRC*** 

We are subject to certain legal and operational risks associated with having the majority of our operations in China, which could cause the value of our securities to significantly decline or become worthless. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes in the operations of the VIE and the VIE's subsidiaries, significant depreciation or a complete loss of the value of our Class A Ordinary Shares, or a complete hindrance of our ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As of the date of this annual report, we, our PRC subsidiary, and VIE and the VIE's subsidiaries have not been involved in any investigations on cybersecurity review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. We believe that we are not subject to cybersecurity review with the Cyberspace Administration of China (the "CAC") under the Cybersecurity Review Measures that became effective on February 15, 2022, given that: (i) we presently possesses personal information of less than one (1) million individual users in our business operations, as of the date of this annual report; and (ii) data processed in our business is less likely to have a bearing on national security, thus it may not be classified as core or important data by the authorities; we are also not subject to network data security review by the CAC even if the Regulations on the Network Data Security Administration (the "Security Administration") has come into effect on January 1, 2025, since we currently do not have over one million users' personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users' personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the Security Administration. See "—D. Risk Factors—Risks Relating to Doing Business in the PRC—Our business generates and processes a large quantity of data, and improper handling of or unauthorized access to such data may adversely affect our business. In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our continued listing on Nasdaq, our financial condition, results of operations, and the subsequent offering."

Since 2021, the Chinese government has strengthened its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective on August 1, 2022), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises. As of the date of this annual report, the Chinese government's recent statements and regulatory actions related to anti-monopoly concerns have not impacted our or the PRC operating entities' ability to conduct business or our ability to accept foreign investments or issue our securities to foreign investors because neither we and our subsidiaries, nor the VIE and the VIE's subsidiaries engage in monopolistic behaviors that are subject to these statements or regulatory actions.

On February 17, 2023, the China Securities Regulatory Commission (the "CSRC") promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures") and five supporting guidelines, which came into effect on March 31, 2023. See "—D. Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE's operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless." Other than the foregoing, as of the date of this annual report, according to our PRC counsel, AllBright Law Offices, or "AllBright", no relevant PRC laws or regulations in effect require that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction, or any regulatory objection to our offerings from the CSRC, the CAC, or any other PRC authorities that have jurisdiction over our operations. Since the official guidance and related implementation rules of these statements and regulatory actions have not been issued, it is highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of the VIE and the VIE's subsidiaries, our ability to accept foreign investments, and our listing on a U.S. exchange. The Standing Committee of the National People's Congress (the "SCNPC") or PRC regulatory authorities may in the future promulgate additional laws, regulations, or implementing rules that require us, our subsidiaries, or the VIE and the VIE's subsidiaries to obtain regulatory approval from Chinese authorities before listing in the U.S. If we do not receive or maintain such approval, or inadvertently conclude that such approval is not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future, we may be subject to an investigation by competent regulators, fines or penalties, or an order prohibiting us from conducting an offering, and these risks could result in a material adverse change in our operations and the value of our Class A Ordinary Shares, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

***Holding Foreign Companies Accountable Act***

Our Class A Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the "HFCA Act") if the Public Company Accounting Oversight Board (United States) (the "PCAOB") is unable to inspect our auditors for three consecutive years beginning in 2021. As of the date of the annual report, the Company's auditor prior to November 11, 2022, Friedman LLP ("Friedman"), headquartered in New York, New York, has been inspected by the PCAOB on a regular basis, with the last inspection in October 2020. Our current auditor, Marcum Asia CPAs LLP ("Marcum Asia"), has been inspected by the PCAOB on a regular basis. Neither Friedman nor Marcum Asia is subject to the determinations announced by the PCAOB on December 16, 2021. If trading in our Class A Ordinary Shares is prohibited under the HFCA Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our Class A Ordinary Shares and trading in our Class A Ordinary Shares could be prohibited. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act") was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the U.S. Securities and Exchange Commission (the "SEC") to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the "MOF"), and the PCAOB signed a Statement of Protocol (the "Protocol") governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination. See "—D. Risk Factors—Risks Relating to Doing Business in the PRC—Recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the "PCAOB," rule changes by Nasdaq, and an act passed by the U.S. Senate all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offerings and affect our ability to list our securities on the Nasdaq Capital Market."

***Permissions Required from the PRC Authorities for The VIE's Operations and the Company's Issuance of Securities to Foreign Investors***

We are currently not required to obtain permission from any of the PRC authorities to operate and issue our Class A Ordinary Shares to foreign investors. In addition, neither we, our subsidiaries, the VIE nor the VIE's subsidiaries are required to obtain permission or approval from the PRC authorities including the CSRC and CAC for the VIE's operation, nor have we, our subsidiaries, the VIE nor the VIE's subsidiaries received any denial for the VIE's operations. However, recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the "Opinions," which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. On February 17, 2023, the CSRC promulgated the Trial Measures and five supporting guidelines, or the "New Overseas Listing Rules", which came into effect on March 31, 2023. The New Overseas Listing Rules require Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as, a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; c) an issuer offering securities on an overseas market to purchase assets after having been listed overseas; and d) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

According to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies from the CSRC, or the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as existing issuers (the "Existing Issuers"). Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic company obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been obtained) for their indirect overseas offering and listing prior March 31, 2023 but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30, 2023. Those that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings. Within such six-month transition period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing procedures with the CSRC.

On February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing, which were issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions. The revised Provisions were issued under the title the "Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies", and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, including, but not limited to, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.

As of the date of this annual report, the revised Provisions have come into effect, and any failure or perceived failure by the Company, its PRC Subsidiary or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. See "Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on Mergers & Acquisitions and Overseas Listings." The Opinions, the Trial Measures, the revised Provisions and any related implementing rules to be enacted may subject us to compliance requirement in the future. Given the current regulatory environment in the PRC, we are still subject to the uncertainty of different interpretation and enforcement of the rules and regulations in the PRC adverse to us, which may take place quickly with little advance notice. Notwithstanding the foregoing, as of the date of this annual report, we are not aware of any PRC laws or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, and we have not received any inquiry, notice, warning, sanction or any regulatory objection from the CSRC, the CAC, or any other Chinese authorities that have jurisdiction over our operations. If we inadvertently conclude that we are not required to obtain any permission or approval from any of the PRC authorities for the VIE's operations and/or our issuance of securities to foreign, or applicable laws, regulations, or interpretations change and we are required to obtain such permission or approval in the future, we may be subject to investigations by competent regulators, fines, or penalties, ordered to suspend our relevant operations and rectify any non-compliance, prohibited from engaging in relevant business or conducting any offering, or incur additional costs to procure such approval or permission, and there is no guarantee that we can successfully obtain such approval or permission. These risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See "—D. Risk Factors—Risks Relating to Our Corporate Structure" and "—D. Risk Factors—Risks Relating to Doing Business in the PRC" for more information. In particular, see "—D. Risk Factors—Risks Relating to Doing Business in the PRC—Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protection available to you and us. Any changes in such laws and regulations may impair our ability to operate profitably," "—D. Risk Factors—Risks Relating to Doing Business in the PRC—The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. Any actions by the Chinese government, including any decision to intervene or influence our operations or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to our operation, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless" and "—D. Risk Factors—Risks Relating to Doing Business in the PRC—We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE's operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may substantially decline in value and become worthless."

**Dividend Distributions, Cash Transfer, and Tax Consequences** 

Shengfeng Cayman transfers cash to its wholly owned Hong Kong subsidiary, Shengfeng HK, by making capital contributions or providing loans, and Shengfeng HK transfers cash to its wholly owned subsidiary Tianyu Shengfeng Logistics Group Co., Ltd. ("Tianyu") based in China by making capital contributions or providing loans to it. Because Shengfeng Cayman consolidates the financial statements of the VIE under the U.S. GAAP in reliance upon contractual arrangements and is regarded as the primary beneficiary of the VIE for accounting purposes, Shengfeng Cayman's subsidiaries are not able to make direct capital contributions to the VIE and their subsidiaries. However, Shengfeng Cayman's subsidiaries may transfer cash to the VIEs by making loans or payments to the VIEs for inter-group transactions.

We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Our board of directors has complete discretion on whether to distribute dividends, subject to applicable laws. See "—D. Risk Factors— Risks Relating to Our Class A Ordinary Shares and the Trading Market—We do not intend to pay dividends for the foreseeable future." As of the date of this annual report, none of our subsidiaries, nor the consolidated VIE and VIE's subsidiaries have made any dividends or distributions to our Company. Additionally, no dividends or distributions have been made to U.S. investors as of the date of this annual report.

Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amounts, provided that in no circumstance may a dividend be paid if such payment would result in the company being unable to pay its debts due in the ordinary course of business.

If we determine to pay dividends on any of our Class A Ordinary Shares or Class B Ordinary Shares in the future, in the absence of available profits or share premium, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, Shengfeng HK.

Current PRC regulations permit our PRC subsidiary to pay dividends to Shengfeng HK only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our Affiliated Entities in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entities in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other things, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, or "SAFE Circular 3," issued on January 26, 2017, provides that banks shall, when dealing with dividend remittance transactions from a domestic enterprise to its offshore shareholders of more than $50,000, review the relevant board resolutions, original tax filing form, and audited financial statements of such domestic enterprise based on the principal of genuine transaction. Furthermore, if our Affiliated Entities in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our PRC subsidiary is unable to receive all of the revenue from the operations of the VIE and the VIE's subsidiaries, we may be unable to pay dividends on our Class A Ordinary Shares or Class B Ordinary Shares, should we desire to do so in the future. See "—D. Risk Factors—Risk Relating to Doing Business in the PRC—Governmental control of currency conversion may affect the value of your investment and our payment of dividends."

Cash dividends, if any, on our Class A Ordinary Shares or Class B Ordinary Shares would be paid in U.S. dollars. Shengfeng HK may be considered a non-resident enterprise for tax purposes, so that any dividends Tianyu pays to Shengfeng HK may be regarded as China-sourced income and, as a result, may be subject to PRC withholding tax at a rate of up to 10%. See "Item 10. Additional Information—E. Taxation—People's Republic of China Enterprise Taxation (for the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau)*.*"

In order for us to pay dividends to our shareholders, we will rely on payments made from Shengfeng Logistics to Tianyu, pursuant to contractual arrangements between such parties, and the distribution of such payments to Shengfeng HK as dividends from Tianyu. Certain payments from Shengfeng Logistics to Tianyu are subject to PRC taxes, including Value-Added Tax. If Shengfeng Logistics or the VIE's subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict any such party's ability to pay dividends or make other distributions to us.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. The 5% withholding tax rate, however, does not automatically apply and certain requirements must be satisfied, including, without limitation, the requirement that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to any dividends paid by our PRC subsidiary to its immediate holding company, Shengfeng HK. As of the date of this annual report, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Shengfeng HK intends to apply for the tax resident certificate if and when Tianyu plans to declare and pay dividends to Shengfeng HK. See *"*—D. Risk Factors—Risks Relating to Doing Business in the PRC—There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits*."* Subject to certain contractual, legal and regulatory restrictions, cash and capital contributions may be transferred among our Cayman Islands holding company and our subsidiaries. U.S. investors will not be subject to Cayman Islands, mainland China, or Hong Kong taxation on dividend distributions, and no withholding will be required on the payment of dividends or distributions to them, while they may be subject to U.S. federal income tax for receiving dividends, to the extent that the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. See "Item 10. Additional Information—E. Taxation."

We conduct substantially all of our business in China through the VIE, Shengfeng Logistics, and the VIE's subsidiaries. Substantially all of Shengfeng Development Limited's revenues, costs and net income in China are directly or indirectly generated through the VIE and the VIE's subsidiaries. We maintain our bank accounts and balances primarily in licensed banks in Mainland China. In addition, cash transfers from our Cayman Islands holding company are subject to applicable PRC laws and regulations on loans and direct investment. For details, see "—D. Risk Factors—Risk Relating to Doing Business in the PRC — PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of future financial activities to make loans or additional capital contributions to our PRC subsidiary and to make loans to Shengfeng Logistics, which could materially and adversely affect our liquidity and our ability to fund and expand our business."

Cash transfers from our Cayman Islands holding company are subject to applicable PRC laws and regulations on loans and direct investment. For example, any loans from Shengfeng Cayman to our wholly owned subsidiary in the PRC, Tianyu, to finance its activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE, or filed with SAFE in its information system. Pursuant to relevant PRC regulations, we may provide loans to Tianyu up to the larger amount of (i) the balance between the registered total investment amount and registered capital of Tianyu, or (ii) twice the amount of the net assets of Tianyu calculated in accordance with the Circular on Full-Coverage Macro-Prudent Management of Cross-Border Financing, or the "PBOC Circular 9." Moreover, any medium or long-term loan to be provided by us to Tianyu or other domestic PRC entities must also be filed and registered with National Development and Reform Commission, or the "NDRC." We may also decide to finance Tianyu by means of capital contributions. These capital contributions are subject to registration with the State Administration for Market Regulation or its local branch, reporting of foreign investment information with MOFCOM, or registration with other governmental authorities in China. Due to the restrictions imposed on loans in foreign currencies extended to PRC domestic companies, we are not likely to make such loans to Shengfeng Logistics, which is a PRC domestic company. Further, we are not likely to finance the activities of Shengfeng Logistics and the VIE's subsidiaries by means of capital contributions, due to regulatory restrictions relating to foreign investment in PRC domestic enterprises, which may be engaged in certain businesses, such as the Foreign Investment Law, which provides that foreign investors shall not invest in any field with investment prohibited by the negative list for foreign investment access. Additionally, the PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders. For a more detailed description of the restrictions and limitations on our ability to transfer cash or distribute earnings to our Cayman Islands holding company and the investors, see "—D. Risk Factors—Risks Relating to Doing Business in the PRC—PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of future financial activities to make loans or additional capital contributions to our PRC subsidiary and to make loans to Shengfeng Logistics, which could materially and adversely affect our liquidity and our ability to fund and expand our business*,*" "—D. Risk Factors— Risks Relating to Doing Business in the PRC—Governmental control of currency conversion may affect the value of your investment and our payment of dividends*,*" and "Item 14. Material Modifications to the Rights of Security Holders and Use of Proceed*s*." In addition, current PRC regulations permit our PRC subsidiary to pay dividends to its shareholders only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. For details, see "—D. Risk Factors—Risks Relating to Doing Business in the PRC—Our PRC subsidiary is subject to restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct our business."

If needed, cash can be transferred between our holding company and subsidiaries through intercompany fund advances, and there are currently no restrictions on transferring funds between our Cayman Islands holding company and subsidiaries in Hong Kong and mainland China, other than certain restrictions and limitations imposed by the PRC government. Currently, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for transfer of funds involving money laundering and criminal activities. Additionally, under existing PRC foreign exchange regulations, payment of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the SAFE, by complying with certain procedural requirements. Therefore, our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulations, such as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents. Approval from, or registration with, appropriate government authorities is, however, required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. Current PRC regulations permit our PRC subsidiary to pay dividends to shareholders only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. See "—D. Risk Factors—Governmental control of currency conversion may affect the value of your investment and our payment of dividends" and "—D. Risk Factors — Risks Relating to Doing Business in the PRC — Our PRC subsidiary is subject to restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct our business." For the fiscal year ended December 31, 2025, VIE and the VIE's subsidiaries paid approximately $9.3 million to WFOE and WFOE's subsidiaries as operating cash payments, WFOE and WFOE's subsidiaries paid approximately $5.7 million to VIE and the VIE's subsidiaries as operating cash payments, Shengfeng Cayman transferred approximately $0.2 million to Shengfeng HK for working capital loans. For the fiscal year ended December 31, 2024, VIE and the VIE's subsidiaries paid approximately $6.6 million to WFOE and WFOE's subsidiaries as operating cash payments, WFOE and WFOE's subsidiaries paid approximately $3.0 million to VIE and the VIE's subsidiaries as operating cash payments. For the fiscal year ended December 31, 2023, Shengfeng Cayman transferred approximately $6.7 million to Shengfeng HK for working capital loans. Shengfeng HK paid approximately $6.7 million to WFOE as a capital contribution. Shengfeng Supply Chain Management Co., Ltd. paid approximately $7.0 million to Fujian Pingtan Tianyu Shengfeng Technology Co., Ltd.(disposed in March 2024) for capital contribution. As of the date of this annual report, none of our subsidiaries or the VIE have made any dividends or distributions to our Company and our Company has not made any dividends or distributions to our shareholders.

**Selected Condensed Consolidating Financial Schedule of Shengfeng Cayman and Its Subsidiaries and the VIEs**

On December 18, 2020, the Company completed a reorganization of entities under common control of its then existing shareholders, who collectively owned all of the equity of the Company prior to the reorganization. The Company and Shengfeng HK were each established as the holding companies of Shengfeng WFOE. Through Shengfeng WFOE, the Company entered into the VIE agreements with the VIE. Pursuant to the VIE agreements, the Company was established as the primary beneficiary of the VIE and its subsidiaries to transfer the economic benefits from the VIE to the Company and to direct the activities of the VIE.

We conduct substantially all of our business in China through the VIE, and the VIE's subsidiaries. Substantially all of the Company's revenues, costs and net income in China are directly or indirectly generated through the VIE and the VIE's subsidiaries.

The following tables present selected condensed consolidating financial data of Shengfeng Cayman and its subsidiaries, the VIE, and the VIE's subsidiaries for the fiscal years ended December 31, 2025, 2024 and 2023, and balance sheet data as of December 31, 2025, 2024 and 2023, which have been derived from our audited consolidated financial statements for those years.

**As of and for the fiscal year ended December 31, 2025**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Shengfeng Development Limited (Shengfeng Cayman)** | **Shengfeng HK <br> (100%<br> owned by<br> Shengfeng<br> Cayman)** | **Tianyu Shengfeng Logistics Group Co., Ltd.<br> (WFOE)<br> (100%<br> owned by<br> Shengfeng HK)** | **Shengfeng Logistics Group<br> Co., Ltd. and its <br> subsidiaries (VIE)** | **Eliminations** | **Consolidated Total** |
|  | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** |
| **Condensed Consolidating Schedule – Balance Sheet** | | | | | | |
| Assets: |  |  |  |  |  |  |
| Current assets | $765 | $160 | $8177 | $212819 | $(5328) | $216593 |
| Receivable from VIE | $- | $- | $124300 | $- | $(124300) | $- |
| Investments in subsidiaries | $131852 | $131692 | $- | $- | $(263544) | $- |
| Non-current assets | $131852 | $138342 | $126018 | $128656 | $(394494) | $130374 |
| Total assets | $132617 | $138502 | $134195 | $341475 | $(399822) | $346967 |
| Liabilities: |  |  |  |  |  |  |
| Current liabilities | $700 | $6810 | $2441 | $172840 | $(12178) | $170613 |
| Payable to WFOE | $- | $- | $- | $124300 | $(124300) | $- |
| Non-current liabilities | $- | $- | $62 | $37429 | $- | $37491 |
| Total liabilities | $700 | $6810 | $2503 | $334569 | $(136478) | $208104 |
| Total equity | $131917 | $131692 | $131692 | $6906 | $(263344) | $138863 |
| Total liabilities and equity | $132617 | $138502 | $134195 | $341475 | $(399822) | $346967 |
| **Condensed Consolidating Schedule – Statement of Operations** |  |  |  |  |  |  |
| Revenues | $- | $- | $15204 | $563780 | $(6506) | $572478 |
| Cost of revenues | $- | $- | $(13666) | $(512057) | $6333 | $(519390) |
| Gross profit | $- | $- | $1538 | $51723 | $(173) | $53088 |
| Operating expenses | $(160) | $- | $(1222) | $(34999) | $173 | $(36208) |
| Technical service income from VIE and its subsidiaries (1) | $- | $- | $11984 | $- | $(11984) | $- |
| Technical Service expense in WFOE (1) | $- | $- | $- | $(11984) | $11984 | $- |
| Income for equity method investments | $12370 | $12370 | $- | $- | $(24740) | $- |
| Net income | $12210 | $12370 | $12370 | $11984 | $(36725) | $12209 |
| **Condensed Consolidating Schedule – Statement of Cash Flows** |  |  |  |  |  |  |
| Net cash provided by (used in) operating activities | $(507) | $- | $1316 | $15290 | $- | $16099 |
| Net cash used in investing activities | $(150) | $- | $(298) | $(37130) | $150 | $(37428) |
| Net cash provided by financing activities | $700 | $150 | $- | $18117 | $(150) | $18817 |
| Effects of exchange rate changes on cash, cash equivalents and restricted cash | $- | $- | $37 | $830 | $- | $867 |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $43 | $150 | $1055 | $(2893) | $- | $(1645) |
| Cash, cash equivalents and restricted cash, beginning of year | $20 | $10 | $320 | $39863 | $- | $40213 |
| Cash, cash equivalents and restricted cash, end of year | $63 | $160 | $1375 | $36970 | $- | $38568 |
| **Inter-company cash transfers** |  |  |  |  |  |  |
| **Transfer from Shengfeng Cayman to Shengfeng HK** | $(150) | $150 | $- | $- | $- | $- |
| Transfer from VIE to WFOE | $- | $- | $9304 | $(9304) | $- | $- |
| Transfer from WFOE to VIE | $- | $- | $(5690) | $5690 | $- | $- |

---

**As of and for the fiscal year ended December 31, 2024**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Shengfeng <br> Development <br> Limited <br> (Shengfeng <br> Cayman)** | **Shengfeng HK <br> (100%<br> owned by<br> Shengfeng<br> Cayman)** | **Tianyu <br> Shengfeng <br> Logistics <br> Group Co., Ltd.<br> (WFOE)<br> (100%<br> owned by<br> Shengfeng HK)** | **Shengfeng <br> Logistics <br> Group<br> Co., Ltd. and its <br> subsidiaries (VIE)** | **Eliminations** | **Consolidated <br> Total** |
|  | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** |
| **Condensed Consolidating Schedule – Balance Sheet** | | | | | | |
| Assets: |  |  |  |  |  |  |
| Current assets | $376 | $10 | $5531 | $203213 | $(3892) | $205238 |
| Receivable from VIE | $- | $- | $109912 | $- | $(109912) | $- |
| Investments in subsidiaries | $116768 | $116758 | $- | $- | $(233526) | $- |
| Non-current assets | $116768 | $123408 | $112245 | $102559 | $(350088) | $104892 |
| Total assets | $117144 | $123418 | $117776 | $305772 | $(353980) | $310130 |
| Liabilities: |  |  |  |  |  |  |
| Current liabilities | $- | $6660 | $943 | $165668 | $(10587) | $162684 |
| Payable to WFOE | $- | $- | $- | $109912 | $(109912) | $- |
| Non-current liabilities | $- | $- | $75 | $23925 | $- | $24000 |
| Total liabilities | $- | $6660 | $1018 | $299505 | $(120499) | $186684 |
| Total equity | $117144 | $116758 | $116758 | $6267 | $(233481) | $123446 |
| Total liabilities and equity | $117144 | $123418 | $117776 | $305772 | $(353980) | $310130 |
| **Condensed Consolidating Schedule – Statement of Operations** |  |  |  |  |  |  |
| Revenues | $- | $- | $14979 | $498122 | $(8943) | $504158 |
| Cost of revenues | $- | $- | $(14063) | $(453365) | $9554 | $(457874) |
| Gross profit | $- | $- | $916 | $44757 | $611 | $46284 |
| Operating expenses | $(259) | $- | $(1053) | $(30306) | $- | $(31618) |
| Technical service income from VIE and its subsidiaries (1) | $- | $- | $10490 | $- | $(10490) | $- |
| Technical Service expense in WFOE (1) | $- | $- | $- | $(10490) | $10490 | $- |
| Income for equity method investments | $10477 | $10477 | $- | $- | $(20954) | $- |
| Net income | $10218 | $10477 | $10477 | $10490 | $(30835) | $10827 |
| **Condensed Consolidating Schedule – Statement of Cash Flows** |  |  |  |  |  |  |
| Net cash provided by (used in) operating activities | $(522) | $- | $1574 | $13958 | $- | $15010 |
| Net cash used in investing activities | $- | $- | $(5805) | $(26824) | $- | $(32629) |
| Net cash provided by financing activities | $- | $- | $- | $29072 | $- | $29072 |
| Effects of exchange rate changes on cash, cash equivalents and restricted cash | $- | $- | $23 | $(556) | $- | $(533) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $(522) | $- | $(4208) | $15650 | $- | $10920 |
| Cash, cash equivalents and restricted cash, beginning of year | $542 | $10 | $4528 | $24213 | $- | $29293 |
| Cash, cash equivalents and restricted cash, end of year | $20 | $10 | $320 | $39863 | $- | $40213 |
| **Inter-company cash transfers** |  |  |  |  |  |  |
| Transfer from VIE to WFOE | $- | $- | $6579 | $(6579) | $- | $- |
| Transfer from WFOE to VIE | $- | $- | $(3036) | $3036 | $- | $- |

---

**As of and for the fiscal year ended December 31, 2023**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Shengfeng <br> Development <br> Limited <br> (Shengfeng <br> Cayman)** | **Shengfeng HK <br> (100%<br> owned by<br> Shengfeng<br> Cayman)** | **Tianyu <br> Shengfeng <br> Logistics <br> Group Co., Ltd.<br> (WFOE)<br> (100%<br> owned by<br> Shengfeng HK)** | **Shengfeng <br> Logistics <br> Group<br> Co., Ltd. and its <br> subsidiaries (VIE)** | **Eliminations** | **Consolidated <br> Total** |
|  | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** | **$ in thousands** |
| **Condensed Consolidating Schedule – Balance Sheet** | | | | | | |
| Assets: |  |  |  |  |  |  |
| Current assets | $635 | $10 | $14434 | $146894 | $(12868) | $149105 |
| Receivable from VIE | $- | $- | $93425 | $- | $(93425) | $- |
| Investments in subsidiaries | $107312 | $107302 | $- | $- | $(214614) | $- |
| Non-current assets | $107312 | $113952 | $114021 | $103055 | $(321607) | $116733 |
| Total assets | $107947 | $113962 | $128455 | $249949 | $(334475) | $265838 |
| Liabilities: |  |  |  |  |  |  |
| Current liabilities | $- | $6660 | $21061 | $127603 | $(18948) | $136376 |
| Payable to WFOE | $- | $- | $- | $93425 | $(93425) | $- |
| Non-current liabilities | $- | $- | $92 | $17057 | $- | $17149 |
| Total liabilities | $- | $6660 | $21153 | $238085 | $(112373) | $153525 |
| Total equity | $107947 | $107302 | $107302 | $11864 | $(222102) | $112313 |
| Total liabilities and equity | $107947 | $113962 | $128455 | $249949 | $(334475) | $265838 |
| **Condensed Consolidating Schedule – Statement of Operations** |  |  |  |  |  |  |
| Revenues | $- | $- | $14098 | $401825 | $(11802) | $404121 |
| Cost of revenues | $- | $- | $(13137) | $(355662) | $11184 | $(357615) |
| Gross profit | $- | $- | $961 | $46163 | $(618) | $46506 |
| Operating expenses | $(421) | $- | $(472) | $(31743) | $36 | $(32600) |
| Technical service income from VIE and its subsidiaries (1) | $- | $- | $10828 | $- | $(10828) | $- |
| Technical Service expense in WFOE (1) | $- | $- | $- | $(10828) | $10828 | $- |
| Income for equity method investments | $11310 | $11310 | $- | $- | $(22620) | $- |
| Net income | $10889 | $11310 | $11310 | $10828 | $(34029) | $10308 |
| **Condensed Consolidating Schedule – Statement of Cash Flows** |  |  |  |  |  |  |
| Net cash provided by (used in) operating activities | $(514) | $- | $2982 | $9645 | $- | $12113 |
| Net cash used in investing activities | $(6660) | $(6650) | $(19080) | $(6694) | $20263 | $(18821) |
| Net cash provided by (used in) financing activities | $7669 | $6660 | $20842 | $(1717) | $(20263) | $13191 |
| Effects of exchange rate changes on cash, cash equivalents and restricted cash | $- | $- | $(216) | $(342) | $- | $(558) |
| Net increase in cash, cash equivalents and restricted cash | $495 | $10 | $4670 | $750 | $- | $5925 |
| Cash, cash equivalents and restricted cash, beginning of year | $47 | $- | $- | $23321 | $- | $23368 |
| Cash, cash equivalents and restricted cash, end of year | $542 | $10 | $4528 | $24213 | $- | $29293 |
| **Inter-company cash transfers** |  |  |  |  |  |  |
| Transfer from Shengfeng Cayman to Shengfeng HK | $(6660) | $6660 | $- | $- | $- | $- |
| Transfer from Shengfeng HK to WFOE | $- | $(6650) | $6650 | $- | $- | $- |
| Transfer from VIE to WFOE | $- | $- | $6954 | $(6954) | $- | $- |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents technical service fee, including the basic annual fee and the floating fee, which equals to 100% of the VIE's income net of tax, pursuant to the Exclusive Technical Consultation and Service Agreements.

**A.** [Reserved]

**B. *Capitalization and Indebtedness*.**

Not applicable.

**C. *Reasons for the Offer and Use of Proceeds*.**

Not applicable.

**D. *Risk Factors*.**

**Risks Relating to Our Corporate Structure**

*Our corporate structure, in particular our WFOE's contractual arrangements (the "VIE Agreements") with Shengfeng Logistics and the Shengfeng Logistics Shareholders, together holding 100% of the shares in Shengfeng Logistics, are subject to significant risks, as set forth in the following risk factors.*

 

***If the PRC government deems that the contractual arrangements in relation to the VIE do not comply with applicable PRC law or PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.***

We currently operate our business through Shengfeng Logistics, a VIE, pursuant to the VIE Agreements, and the VIE's subsidiaries. As a result of these contractual arrangements, under U.S. GAAP, the assets and liabilities of Shengfeng Logistics are treated as our assets and liabilities and the results of operations of Shengfeng Logistics are treated in all aspects as if they were the results of our operations. For a description of these contractual arrangements, see "Item 3. Key Information—Our VIE Agreements."

In the opinion of AllBright, our PRC counsel, based on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of Shengfeng Logistics in China and Tianyu, our wholly owned subsidiary in China currently are not in violation of applicable PRC laws and regulations currently in effect; and (ii) each of the contracts among Tianyu, Shengfeng Logistics, and the Shengfeng Logistics Shareholders is legal, valid, binding, and enforceable in accordance with its terms and applicable PRC laws. However, our PRC counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. In addition, our VIE Agreements have not been tested in a court of law in China as of the date of this annual report. Accordingly, the PRC regulatory authorities may ultimately take a view contrary to the opinion of our PRC counsel in the future. It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or, if adopted, what they would provide. Furthermore, it is uncertain whether any future actions by the government of China will significantly affect the enforceability of the VIE Agreements.

If (i) the applicable PRC authorities invalidate the VIE Agreements for violation of PRC laws, rules and regulations, (ii) the VIE or its shareholders terminate the contractual arrangements (iii) the VIE or its shareholders fail to perform their respective obligations under such VIE Agreements, or (iv) if these regulations change or are interpreted differently in the future, our business operations in China would be materially and adversely affected, and the value of our Class A Ordinary Shares would substantially decrease or even become worthless. Further, if we fail to renew such VIE Agreements upon their expiration, we would not be able to continue our business operations unless the then current PRC law allows us to directly operate businesses in China.

In addition, if the VIE or the VIE's subsidiaries or all or part of their respective assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. If any of the VIE or the VIE's subsidiaries undergoes a voluntary or involuntary liquidation proceeding, its respective shareholders or unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business and our ability to generate revenue.

All of the VIE Agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce such VIE Agreements.

If our corporate structure and the VIE Agreements are determined to be illegal or invalid by a PRC court, arbitral tribunal, or regulatory authorities, we may lose control of the VIE and have to modify such structure to comply with regulatory requirements. However, there can be no assurance that we can achieve a structural modification without material disruption to our business. Further, if our corporate structure and contractual arrangements are found to be in violation of any existing or future PRC laws or regulations, or we or Shengfeng Logistics fails to obtain or maintain any required permits or approvals, the relevant regulatory authorities would have broad discretion in dealing with such violations, including:

● revoking the business or operating licenses or both of Tianyu or Shengfeng Logistics;

● discontinuing or restricting the operations of Tianyu or Shengfeng Logistics;

● imposing conditions or requirements with which we, Tianyu, or Shengfeng Logistics may not be able to comply;

● requiring us, Tianyu, or Shengfeng Logistics to change our corporate structure and contractual arrangements;

● restricting or prohibiting our use of the proceeds from our initial public offering to finance our business and operations in China; and

● imposing fines.

The imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition, it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of Shengfeng Logistics in our consolidated financial statements, if the PRC government authorities were to find our legal structure and VIE Agreements to be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of Shengfeng Logistics or our right to receive substantially all the economic benefits and residual returns from Shengfeng Logistics and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of Shengfeng Logistics in our consolidated financial statements. Either of these results, or any other significant penalties that might be imposed on us in this event, would have a material adverse effect on our financial condition and results of operations.

Furthermore, if the PRC government determines that the contractual arrangements constituting part of our VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, our Class A Ordinary Shares may decline in value or become worthless if we are unable to assert our contractual control rights over the assets of the VIE and the VIE's subsidiaries that conduct substantially all of our operations in China.

***Our VIE Agreements with Shengfeng Logistics and the Shengfeng Logistics Shareholders may not be effective in providing control over Shengfeng Logistics.***

Shengfeng Development Limited is a holding company incorporated under the laws of the Cayman Islands and it is not a Chinese operating company. As a holding company with no material operations of its own, its operations have been conducted in China by its subsidiaries and through contractual arrangements, or VIE Agreements, with a VIE, Shengfeng Logistics, and the VIE's subsidiaries. For accounting purposes, we control and receive the economic benefits of the VIE and the VIE's subsidiaries' business operations through the VIE Agreements, which enable us to consolidate the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statement under U.S. GAAP. Neither we nor our subsidiaries own any equity interests in the VIE or the VIE's subsidiaries. As an investor of our Class A Ordinary Shares, you may be subject to unique risks due to our VIE structure. The VIE Agreements are designed to provide our wholly owned subsidiary, Tianyu, with the power, rights, and obligations to Shengfeng Logistics, including control rights and the rights to the assets, property, and revenue of the VIE, as set forth under the VIE Agreements. Our VIE Agreements have not been tested in a court of law in China as of the date of this annual report. We have evaluated the guidance in FASB ASC 810 and determined that we are regarded as the primary beneficiary of the VIE, for accounting purposes, as a result of our direct ownership in Tianyu and the provisions of the VIE Agreements. Accordingly, we treat the VIE and the VIE's subsidiaries as our consolidated entities under U.S. GAAP. We have consolidated the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.

Our Class A Ordinary Shares are shares of our offshore holding company in the Cayman Islands instead of shares of the VIE or the VIE's subsidiaries in China, therefore, you will not directly hold equity interests in the VIE or the VIE's subsidiaries, and you may never directly hold equity interests in the VIE or the VIE's subsidiaries through your investment in our Class A Ordinary Shares. For a description of the VIE Agreements, see "Item 3. Key Information—Our VIE Agreements."

We primarily have relied, and expect to continue to rely on the VIE Agreements to control and operate the business of Shengfeng Logistics. However, the VIE Agreements may not be as effective in providing us with the necessary control over Shengfeng Logistics and its operations. For example, Shengfeng Logistics and the Shengfeng Logistics Shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of Shengfeng Logistics, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Shengfeng Logistics, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current VIE Agreements, we rely on the performance by Shengfeng Logistics and the Shengfeng Logistics Shareholders of their respective obligations under the contracts to exercise control over Shengfeng Logistics. As of the date of this annual report, Shengfeng Logistics is owned by Fujian Yunlian Shengfeng Industry Co., Ltd. as to 54.58%, Yongxu Liu, our chief executive officer, chairman of the board and president, as to 30.99%, and the other Shengfeng Logistics Shareholders who collectively own 14.43% of the VIE. Fujian Yunlian Shengfeng Industry Co., Ltd. is 90% owned by Yongxu Liu. As a result, Mr. Liu directly and indirectly owns 80.12% of Shengfeng Logistics. The Shengfeng Logistics Shareholders may not act in the best interests of our Company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements with Shengfeng Logistics. Furthermore, failure of the VIE shareholders to perform certain obligations could compel the Company to rely on legal remedies available under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which may not be effective. If any disputes relating to these contracts remain unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and arbitration, litigation, and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system and the Company may incur substantial costs to enforce the terms of such contracts. Therefore, our VIE Agreements with Shengfeng Logistics and the Shengfeng Logistics Shareholders may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be. Additionally, our VIE Agreements have not been tested in a court of law in China, as of the date of this annual report, and may not be effective in providing control over the VIE. We are, therefore, subject to risks due to the uncertainty of the interpretation and application of the laws and regulations of the PRC, regarding the VIE and the VIE structure, including, but not limited to, regulatory review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the contractual arrangements with the VIE. The VIE Agreements may not be enforceable in China if the PRC government authorities or courts take a view that such VIE Agreements contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event that we are unable to enforce the VIE Agreements, we may not be able to exert effective control over Shengfeng Logistics, and our ability to conduct our business may be materially and adversely affected.

***Our VIE Agreements are governed by the laws of the PRC and we may have difficulty in enforcing any rights we may have under these contractual arrangements.***

As our VIE Agreements are governed by PRC laws and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. Disputes arising from the VIE Agreements will be resolved through arbitration in the PRC, although these disputes do not include claims arising under the United States federal securities law and thus do not prevent you from pursuing claims under the United States federal securities law. The legal environment in the PRC is not as developed as in the United States. As a result, uncertainties in the PRC legal system could further limit our ability to enforce these contractual arrangements, through arbitration, litigation, and other legal proceedings remain in the PRC, which could limit our ability to enforce these contractual arrangements and exert effective control over Shengfeng Logistics. Furthermore, these contracts may not be enforceable in the PRC if the PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over Shengfeng Logistics, and our ability to conduct our business may be materially and adversely affected. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.

***We may not be able to consolidate the financial results of Shengfeng Logistics or such consolidation could materially and adversely affect our operating results and financial condition.***

Our business is conducted through Shengfeng Logistics, which currently is considered for accounting purposes as a VIE, and we are considered the primary beneficiary for accounting purposes, enabling us to consolidate the financial results of Shengfeng Logistics in our consolidated financial statements. In the event that in the future Shengfeng Logistics would no longer meet the definition of a VIE, or we are deemed not to be the primary beneficiary for accounting purposes, we would not be able to consolidate line by line its financial results in our consolidated financial statements for PRC purposes. Furthermore, if in the future an affiliate company becomes a VIE and we become the primary beneficiary for accounting purposes, we would be required to consolidate that entity's financial results in our consolidated financial statements for PRC purposes. If such entity's financial results were negative, this could have a corresponding negative impact on our operating results for PRC purposes. However, any material variations in the accounting principles, practices, and methods used in preparing financial statements for PRC purposes from the principles, practices, and methods generally accepted in the United States and in the SEC accounting regulations must be discussed, quantified, and reconciled in financial statements for the United States and SEC purposes.

***The VIE Agreements may result in adverse tax consequences.***

PRC laws and regulations emphasize the requirement of an arm's length basis for transfer pricing arrangements between related parties. The laws and regulations also require enterprises with related party transactions to prepare transfer pricing documentation to demonstrate the basis for determining pricing, the computation methodology, and detailed explanations. Related party arrangements and transactions may be subject to challenge or tax inspection by the PRC tax authorizes.

Under a tax inspection, if our transfer pricing arrangements between Tianyu and Shengfeng Logistics are judged as tax avoidance, or related documentation does not meet the requirements, Tianyu and Shengfeng Logistics may be subject to material adverse tax consequences, such as transfer pricing adjustment. A transfer pricing adjustment could result in a reduction, for PRC tax purpose, of adjustments recorded by Tianyu, which could adversely affect us by (i) increasing Shengfeng Logistics' tax liabilities without reducing Tianyu's tax liabilities, which could further result in interest being levied to us for unpaid taxes; or (ii) imposing late payment fees and other penalties on Shengfeng Logistics for the adjusted but unpaid taxes according to the applicable regulations. In addition, if Tianyu requests the Shengfeng Logistics Shareholders to transfer their equity interests in Shengfeng Logistics at nominal or no value pursuant to the VIE Agreements, such transfer may be viewed as a gift and subject Tianyu to PRC income tax. As a result, our financial position could be materially and adversely affected if Shengfeng Logistics' tax liabilities increase or if it is required to pay late payment fees and other penalties.

***The Shengfeng Logistics Shareholders have potential conflicts of interest with our Company which may adversely affect our business and financial condition.***

The Shengfeng Logistics Shareholders may have potential conflicts of interest with us. These shareholders may not act in the best interest of our Company or may breach, or cause Shengfeng Logistics to breach the existing contractual arrangements we have with them and Shengfeng Logistics, which would have a material and adverse effect on our ability to effectively control Shengfeng Logistics and receive economic benefits from it. For example, the shareholders may be able to cause our agreements with Shengfeng Logistics to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor.

Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our Company, except that we could exercise our purchase option under the exclusive call option agreements with these shareholders to request them to transfer all of their equity interests in Shengfeng Logistics to a PRC entity or individual designated by us, to the extent permitted by PRC law. If we cannot resolve any conflicts of interest or disputes between us and those shareholders, we would have to rely on legal proceedings, which may materially disrupt our business. There is also substantial uncertainty as to the outcome of any such legal proceeding.

***We rely on the approvals, certificates, and business licenses held by Shengfeng Logistics and any deterioration of the relationship between Tianyu and Shengfeng Logistics could materially and adversely affect our overall business operations.***

Pursuant to the VIE Agreements, our business in the PRC will be undertaken on the basis of the approvals, certificates, business licenses, and other requisite licenses held by Shengfeng Logistics. There is no assurance that Shengfeng Logistics will be able to renew its licenses or certificates when their terms expire with substantially similar terms as the ones they currently hold.

Further, our relationship with Shengfeng Logistics is governed by the VIE Agreements, which are intended to provide us, through our indirect ownership of Tianyu, with effective control over the business operations of Shengfeng Logistics. However, the VIE Agreements may not be effective in providing control over the applications for and maintenance of the licenses required for our business operations. Shengfeng Logistics could violate the VIE Agreements, go bankrupt, suffer from difficulties in its business, or otherwise become unable to perform its obligations under the VIE Agreements and, as a result, our operations, reputation, business, and stock price could be severely harmed.

***The exercise of our option to purchase part or all of the shares in Shengfeng Logistics under the exclusive call option agreement might be subject to certain limitations and substantial costs.***

Our exclusive call option agreement with Shengfeng Logistics and the Shengfeng Logistics Shareholders gives Tianyu the option to purchase up to 100% of the shares in Shengfeng Logistics. Such transfer of shares may be subject to approvals from, filings with, or reporting to competent PRC authorities, such as the Ministry of Commerce of the PRC, or "MOFCOM," the State Administration for Market Regulation, and/or their local competent branches. In addition, the shares transfer price may be subject to review and tax adjustment by the relevant tax authorities. The shares transfer price to be received by Shengfeng Logistics under the VIE Agreements may also be subject to enterprise income tax, and these amounts could be substantial.

**Risks Relating to Doing Business in the PRC**

***There are uncertainties under the Foreign Investment Law relating to the status of businesses in China controlled by foreign invested projects primarily through contractual arrangements, such as our business.***

The NDRC and the MOFCOM promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Edition) (the "2024 National Negative List") on September 6, 2024, effective on November 1, 2024.

On March 15, 2019, the National People's Congress approved the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, repealing simultaneously the Law of the PRC on Sino-foreign Equity Joint Ventures, the Law of the PRC on Wholly Foreign-owned Enterprises, and the Law of the PRC on Sino-foreign Cooperative Joint Ventures, together with their implementation rules and ancillary regulations. Pursuant to the Foreign Investment Law, foreign investment refers to any investment activity directly or indirectly carried out by foreign natural persons, enterprises, or other organizations, including investment in new construction project, establishment of foreign funded enterprise or increase of investment, merger and acquisition, and investment in any other way stipulated under laws, administrative regulations, or provisions of the State Council of the PRC, or the "State Council." The Foreign Investment Law does not explicitly stipulate the contractual arrangements as a form of foreign investment. On December 26, 2019, the State Council promulgated the Implementation Regulations on the Foreign Investment Law, which came into effect on January 1, 2020. However, the Implementation Regulations on the Foreign Investment Law still remain silent on whether contractual arrangements should be deemed to be a form of foreign investment. Though these regulations do not explicitly classify contractual arrangements as a form of foreign investment, there is still uncertainty regarding whether the VIE would be identified as a foreign-invested enterprise in the future. As a result, there is no assurance that foreign investment via contractual arrangements would not be interpreted as a type of indirect foreign investment activities under the definition in the future.

If we are deemed to have a non-PRC entity as a controlling shareholder, the provisions regarding control through contractual arrangements could apply to our VIE Agreements, and as a result Shengfeng Logistics might become subject to restrictions on foreign investment, which may materially impact the viability of our current and future operations. Specifically, we may be required to modify our corporate structure, change our current scope of operations, obtain approvals, or face penalties or other additional requirements, compared to entities which do have PRC controlling shareholders. Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, and business operations.

It is uncertain whether we would be considered as ultimately controlled by Chinese parties. As of the date of this annual report, Mr. Yongxu Liu, our chief executive officer and Chairman and a PRC citizen beneficially and indirectly owns 41,880,000 Class B Ordinary Shares, representing approximately 91.16% of the voting rights in our Company. It is uncertain, however, if these factors would be sufficient to give them control over us under the Foreign Investment Law. If future revisions or implementation rules of the Foreign Investment Law mandate further actions, such as the MOFCOM market entry clearance or certain restructuring of our corporate structure and operations, there may be substantial uncertainties as to whether we can complete these actions in a timely manner, if at all, and our business and financial condition may be materially and adversely affected.

***We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers.***

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We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.

We expect to obtain information about various aspects of our operations as well as regarding our employees and third parties. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information. We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.

The PRC Criminal Law, as amended by its Amendment 7 which was effective on February 28, 2009 and Amendment 9 which was effective on November 1, 2015, prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen's personal information obtained during the course of performing duties or providing services or obtaining such information through theft or other illegal ways. On November 7, 2016, the Standing Committee of the PRC National People's Congress issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017.

Pursuant to the Cybersecurity Law, which was adopted by the National People's Congress on November 7, 2016, amended on October 28, 2025, and came into force on January 1, 2026, network operators must not, without users' consent, collect their personal information, and may only collect users' personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations.

The Civil Code of the PRC, effective on January 1, 2021, provides main legal basis for privacy and personal information infringement claims under the Chinese civil laws. PRC regulators, including the Cyberspace Administration of China, MIIT, and the Ministry of Public Security have been increasingly focused on regulation in the areas of data security and data protection.

The PRC regulatory requirements regarding cybersecurity are constantly evolving. For instance, various regulatory bodies in China, including the Cyberspace Administration of China, the Ministry of Public Security and the SAMR, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. In April 2020, the Chinese government promulgated the Cybersecurity Review Measures, which came into effect on June 1, 2020. According to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.

In November 2016, the Standing Committee of China's National People's Congress passed China's first Cybersecurity Law ("CSL"), which became effective in June 2017. The CSL is the first PRC law that systematically lays out the regulatory requirements on cybersecurity and data protection, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny. The legal consequences of violation of the CSL include penalties of warning, confiscation of illegal income, suspension of related business, winding up for rectification, shutting down the websites, and revocation of business license or relevant permits. In April 2020, the Cyberspace Administration of China and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures, which became effective in June 2020. Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On July 10, 2021, the Cyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments ("Review Measures"), which required that, in addition to "operator of critical information infrastructure," any "data processor" carrying out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The Cyberspace Administration of China has said that under the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be "affected, controlled, and maliciously exploited by foreign governments," The cybersecurity review will also investigate the potential national security risks from overseas IPOs. We do not know what regulations will be adopted or how such regulations will affect us and our listing on Nasdaq. In the event that the Cyberspace Administration of China determines that we are subject to these regulations, we may be required to delist from Nasdaq and we may be subject to fines and penalties. On June 10, 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which took effect on September 1, 2021. The Data Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should not exceed the necessary limits The costs of compliance with, and other burdens imposed by, CSL and any other cybersecurity and related laws may limit the use and adoption of our products and services and could have an adverse impact on our business. Further, if the enacted version of the Measures for Cybersecurity Review mandates clearance of cybersecurity review and other specific actions to be completed by companies like us, we face uncertainties as to whether such clearance can be timely obtained, or at all.

On December 28, 2021, the Cyberspace Administration of China jointly with the relevant authorities published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replace the Review Measures, which required that, operators of critical information infrastructure purchasing network products and services, and data processors (together with the operators of critical information infrastructure, the "Operators") carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, any operator who controls more than one million users' personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.

Under the Data Security Law enacted on September 1, 2021 and the Measures for Cybersecurity Review (2021) implemented on February 15, 2022, since we are not an Operator, nor do we control more than one million users' personal information, we would not be required to apply for a cybersecurity review by the CAC. However, if the CSRC, CAC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for any follow-on offerings, we may be unable to obtain such approvals and we may face sanctions by the CSRC, CAC or other PRC regulatory agencies for failure to seek their approval which could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors and the securities currently being offered may substantially decline in value and be worthless.

On August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure, or the Regulations, which took effect on September 1, 2021. The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others, that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

On August 20, 2021, the Standing Committee of the NPC approved the Personal Information Protection Law ("PIPL"), which became effective on November 1, 2021. The PIPL regulates collection of personal identifiable information and seeks to address the issue of algorithmic discrimination. Companies in violation of the PIPL may be subject to warnings and admonishments, forced corrections, confiscation of corresponding income, suspension of related services, and fines. We had not collected identifiable or sensitive personal information of individual end-users, such as ID card numbers and real names, which means our potential access or exposure to customers' personal information is limited. However, in the event we inadvertently access or become exposed to customers' personal identifiable information, then we may face heightened exposure to the PIPL.

We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all. Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and adversely affect our business, financial condition, and results of operations.

***China's economic, political and social conditions, laws and regulations, as well as possible interventions and influences of any government policies and actions are uncertain and their changes may be quick. Therefore, such uncertainties and changes could have a material adverse effect on our business, operations and the value of our Class A Ordinary Shares.***

Our assets and operations are currently located in China. Accordingly, our business, financial condition, results of operations, and prospects may be influenced to a significant degree by political, economic, and social conditions in China generally. The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange, and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, including the reduction of state ownership of productive assets and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over China's economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies. In addition, although the PRC includes also Hong Kong Special Administrative Region and Macau Special Administrative Region, they are subject to different legal systems from mainland China. For example, according to Basic Law of Hong Kong Special Administrative Region of the PRC (the "Basic Law"), the Hong Kong Special Administrative Region is an inalienable part of the People's Republic of China. The National People's Congress (the "NPC") of the PRC authorizes the Hong Kong Special Administrative Region to exercise a high degree of autonomy and to enjoy executive, legislative and independent judicial power, including that of final adjudication, in accordance with the provisions of the Basic Law. The laws previously in force in Hong Kong, that is, the common law, rules of equity, ordinances, subordinate legislation and customary law shall be maintained, except for any that contravene the Basic Law and subject to any amendment by the legislature of the Hong Kong Special Administrative Region. PRC national laws shall not be applied in the Hong Kong Special Administrative Region except for those listed in the Basic Law. The Standing Committee of the National People's Congress may add to or delete from the list of laws in Annex III of Basic Law after consulting its Committee for the Basic Law of the Hong Kong Special Administrative Region and the government of the Hong Kong Special Administrative Region. Laws listed in Annex III to this Law shall be confined to those relating to national defense and foreign affairs as well as other matters outside the limits of the autonomy of the Hong Kong Special Administrative Region as specified by the Basic Law. In the event that the Standing Committee of the National People's Congress decides to declare a state of war or, by reason of turmoil within the Hong Kong Special Administrative Region which endangers national unity or security and is beyond the control of the government of the Region, decides that the Hong Kong Special Administrative Region is in a state of emergency, the Central People's Government may issue an order applying the relevant national laws in the Hong Kong Special Administrative Region. As of the date of this annual report, the PRC national laws applicable to the Hong Kong Special Administrative Region include the following: Resolution on the Capital, Calendar, National Anthem and National Flag of the People's Republic of China, Resolution on the National Day of the People's Republic of China, Declaration of the Government of the People's Republic of China on the Territorial Sea, Nationality Law of the People's Republic of China, Regulations of the People's Republic of China Concerning Diplomatic Privileges and Immunities, Law of the People's Republic of China on the National Flag, Regulations of the People's Republic of China concerning Consular Privileges and Immunities, Law of the People's Republic of China on the National Emblem, Law of the People's Republic of China on the Territorial Sea and the Contiguous Zone, Law of the People's Republic of China on the Garrisoning of the Hong Kong Special Administrative Region, Law of the People's Republic of China on the Exclusive Economic Zone and the Continental Shelf, Law of the People's Republic of China on the National Anthem, and Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region. However, due to the uncertainty of the PRC legal system and changes in laws, regulations or policies, including how those laws, regulations or policies would be interpreted or implemented, and the national laws applicable in Hong Kong, the Basic Law might be revised in the future, and as a consequence, we may face certain legal and operational risks associated with operating in the PRC, which may also apply to our operations in Hong Kong, including those of Shengfeng HK. However, as of the date of this annual report, we, believe that since the list of laws in Annex III of Basic Law is currently limited to national defense and foreign affairs, PRC national laws listed in the Basic Law does not apply to our operations in Hong Kong. Moreover, our HK subsidiary, Shengfeng HK, does not have any business operations in Hong Kong. Nevertheless, Shengfeng HK, as an entity incorporated under law of Hong Kong, shall be subject to Hong Kong law in general.

While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government, or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and operating results, reduce demand for our products, and weaken our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustments, to control the pace of economic growth. These measures may cause decreased economic activities in China, which may adversely affect our business and operating results.

China's economic, political and social conditions, laws and regulations, as well as possible interventions and influences of any government policies and actions are uncertain and could have a material adverse effect on our business, operations and the value of our Class A Ordinary Shares. Furthermore, the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence our operations at any time, which are beyond our control. Any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares to investors and reduce the value of such securities.

Furthermore, our Company, the VIE and the VIE's subsidiaries, and our investors may face uncertainty about future actions by the government of China that could significantly affect the VIE and the VIE's subsidiaries' financial performance and operations, including the enforceability of the contractual arrangements. As of the date of this annual report, neither our Company nor the VIE has received or was denied permission from Chinese authorities to list on U.S. exchanges. However, there is no guarantee that our Company or VIE will receive or not be denied permission from Chinese authorities to list on U.S. exchanges in the future.

***Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protection available to you and us. Any changes in such laws and regulations may impair our ability to operate profitably.***

The PRC legal system is based on written statutes. Unlike common law systems, it is a system in which legal cases have limited value as precedents. In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The legislation over the past three decades has significantly increased the protection afforded to various forms of foreign or private-sector investment in China. Our PRC Affiliated Entities are subject to various PRC laws and regulations generally applicable to companies in China. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, however, the interpretations of many laws, regulations, and rules are not always uniform and enforcement of these laws, regulations, and rules involve uncertainties.

From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, however, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy in the PRC legal system than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainties over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.

For example, recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure to the CSRC; (2) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer's audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for initial public offering and listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted. The New Overseas Listing Rules further require Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; and c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

According to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies from the CSRC, or the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as the Existing Issuers. Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic company obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been obtained) for their indirect overseas offering and listing prior to March 31, 2023 but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30, 2023. Those that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings. Within such six-month transition period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing procedures with the CSRC. Based on the foregoing, according to our PRC counsel, since our registration statement on Form F-1 was declared effective on March 30, 2023, and we completed our IPO and listing before September 30, 2023, we were not required to complete the filing procedures pursuant to the Trial Measures for our IPO. However, we are still required to submit filings with the CSRC for all subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing overseas within three business days after such application is submitted or such transaction is completed.

On February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions, which were issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised Provisions were issued under the title the "Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies", and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, including, but not limited to, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. As of the date of this annual report, the revised Provisions came into effect and we are not aware of any PRC laws or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, nor have we received any inquiry, notice, warning, sanction or any regulatory objection from the CSRC, the CAC, or any other Chinese authorities that have jurisdiction over our operations. However, any failure or perceived failure by the Company, its PRC Subsidiary or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. The Opinions, the Trial Measures, the revised Provisions and any related implementing rules that may be issued in the future may amend our compliance obligations. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of the Opinions, the Trial Measures or any future implementation rules on a timely basis, or at all.

Uncertainties regarding the enforcement of laws and the fact that rules and regulations in China can change quickly with little advance notice, along with the risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could result in a material change in our operations, financial performance and/or the value of our Class A Ordinary Shares or impair our ability to raise money.

***Substantial uncertainties exist with respect to the enactment timetable and final content of the draft of China Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.***

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The Chinese Ministry of Commerce ("MOFCOM") published a discussion draft of the proposed Foreign Investment Law in January 2015 (the "Draft FIL"). The Draft FIL embodies an expected Chinese regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.

Among other things, the Draft FIL expands the definition of foreign investment and introduces the principle of "actual control" in determining whether a company is considered a foreign-invested enterprise ("FIE"). The Draft FIL specifically provides that entities established in China but "controlled" by foreign investors will be treated as FIEs, whereas an entity set up in a foreign jurisdiction would nonetheless be, upon market entry clearance, treated as a Chinese domestic investor provided that the entity is "controlled" by Chinese entities and/or citizens. Once an entity is determined to be an FIE, it will be subject to the foreign investment restrictions or prohibitions set forth in a Negative List to be separately issued by the State Council later. Unless the underlying business of the FIE falls within the Negative List, which calls for market entry clearance, prior approval from the government authorities as mandated by the existing foreign investment legal regime would no longer be required for establishment of the FIE.

Pursuant to the 2024 National Negative List, if a PRC company, which engages in any business where foreign investment is prohibited under the Negative List, or prohibited businesses, seeks an overseas offering or listing, it must obtain the approval from competent governmental authorities. Based on a set of Q&A published on the NDRC's official website, a NDRC official indicated that after a PRC company submits its application for overseas listing to the CSRC and where matters relating to prohibited businesses under the Negative List are implicated, the CSRC will consult the regulatory authorities having jurisdiction over the relevant industries and fields.

The logistics services are not currently subject to the 2024 National Negative List, issued by the National Development and Reform Commission and the Ministry of Commerce on September 6, 2024 and became effective on November 1, 2024. The Draft FIL, if enacted as proposed, will not materially impact the viability of our current corporate structure, corporate governance and business operations in many aspects. However, should the logistics services become subject to foreign investment restrictions set forth in the Catalogue of Industries for Guiding Foreign Investment then the viability of our current corporate structure, corporate governance and business operations may be materially impacted in many aspects.

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***You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management named in the annual report based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.***

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands, and we conduct our operations in China and our assets are located in China. In addition, all our senior executive officers reside within China for a significant portion of the time and are PRC nationals. As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state.

We have been advised by our Cayman Islands legal counsel, Ogier (Cayman) LLP, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us, judgments of courts of the United States obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is currently no statutory enforcement or treaty between the United States and the Cayman Islands providing for enforcement of judgments obtained in the United States. The courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive, given by a court of competent jurisdiction (the courts of the Cayman Islands will apply the rules of Cayman Islands private international law to determine whether the foreign court is a court of competent jurisdiction), and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands. Furthermore, it is uncertain that Cayman Islands courts would enforce: (1) judgments of U.S. courts obtained in actions against us or other persons that are predicated upon the civil liability provisions of the U.S. federal securities laws; or (2) original actions brought against us or other persons predicated upon the Securities Act. Ogier (Cayman) LLP has informed us that there is uncertainty with regard to Cayman Islands law relating to whether a judgment obtained from the U.S. courts under civil liability provisions of the securities laws will be determined by the courts of the Cayman Islands as penal and punitive in nature. A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

The recognition and enforcement of foreign judgments are provided for under the *PRC Civil Procedures Law*. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the *PRC Civil Procedures Law* based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the *PRC Civil Procedures Law*, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security, or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the U.S.

It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the United States may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or "Article 177," which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory authority of the State Council and the competent departments of the State Council. While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

***Recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the "PCAOB," rule changes by Nasdaq, and an act passed by the U.S. Senate all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offerings and affect our ability to list our securities on the Nasdaq Capital Market.***

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily operating in a "Restrictive Market," (ii) adopt a new requirement relating to the qualification of management or the board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company's auditor. On October 4, 2021, the SEC approved Nasdaq's revised proposal for the rule changes.

On May 20, 2020, the U.S. Senate passed the HFCA Act, requiring a foreign company to certify it is not owned or manipulated by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company's auditor for three consecutive years, the issuer's securities are prohibited to trade on a national exchange or in the over-the-counter trading market in the United States. On December 2, 2020, the U.S. House of Representatives approved the HFCA Act. On December 18, 2020, the HFCA Act was signed into law.

On June 4, 2020, the U.S. President issued a memorandum ordering the President's working group on financial markets, or the "PWG," to submit a report to the President within 60 days of the date of the memorandum that should include recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB to enforce U.S. regulatory requirements on Chinese companies listed on U.S. stock exchanges and their audit firms.

On August 6, 2020, the PWG released a report recommending that the SEC take steps to implement the five recommendations outlined in the report. In particular, to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate, or "NCJs", the PWG recommends enhanced listing standards on U.S. stock exchanges. This would require, as a condition to initial and continued exchange listing, PCAOB access to work papers of the principal audit firm for the audit of the listed company. Companies unable to satisfy this standard as a result of governmental restrictions on access to audit work papers and practices in NCJs may satisfy this standard by providing a co-audit from an audit firm with comparable resources and experience where the PCAOB determines it has sufficient access to audit work papers and practices to conduct an appropriate inspection of the co-audit firm. The report permits the new listing standards to provide for a transition period until January 1, 2022 for listed companies, but would apply immediately to new listings once the necessary rulemakings and/or standard-setting are effective.

On August 10, 2020, the SEC announced that SEC Chairman had directed the SEC staff to prepare proposals in response to the PWG Report, and that the SEC was soliciting public comments and information with respect to these proposals. If we are listed on Nasdaq and fail to meet the new listing standards before the deadline specified thereunder due to factors beyond our control, we could face possible de-listing from the Nasdaq Capital Market, deregistration from the SEC, and/or other risks, which may materially and adversely affect, or effectively terminate, the trading of our Ordinary Shares in the United States.

The HFCA Act requires certain issuers of securities to establish that they are not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the PCAOB. Furthermore, if the PCAOB is unable to inspect the issuer's public accounting firm for three consecutive years, the issuer's securities are banned from trade on a national exchange or in the over-the-counter trading market in the United States or through other methods.

On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the HFCA Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the registrant's annual report regarding the audit arrangements of, and governmental influence on, such a registrant.

On June 22, 2021, the U.S. Senate passed the Accelerating HFCA Act, which, if passed by the U.S. House of Representatives and signed into law, would decrease the number of non-inspection years for foreign companies to comply with PCAOB audits from three to two, thus reducing the time period before their securities may be prohibited from trading or delisted.

On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On November 5, 2021, the SEC approved the PCAOB's Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act. Rule 6100 provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act, which became effective on January 10, 2022. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by mainland China and Hong Kong authorities in those jurisdictions. The PCAOB has made such designations as mandated under the HFCA Act. Pursuant to each annual determination by the PCAOB, the SEC will, on an annual basis, identify issuers that have used non-inspected audit firms and thus are at risk of such suspensions in the future. As of the date of this annual report, our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021. On August 26, 2022, the PCAOB signed the Statement of Protocol (SOP) Agreements with the China Securities Regulatory Commission (CSRC) and China's Ministry of Finance. The SOP, together with two protocol agreements governing inspections and investigations (together, the "SOP Agreements"), establish a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination.

On December 23, 2022, the Accelerating HFCA Act was signed into law, which amended the HFCA Act by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. On December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to Accelerating HFCA Act, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.

The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection in the future.

Our auditor, Marcum Asia CPAs LLP ("Marcum Asia"), the independent registered public accounting firm that issue the audit report included elsewhere in this annual report, as auditors of companies that are traded publicly in the United States and firms registered with the PCAOB, has been subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Marcum Asia, has been inspected by the PCAOB on a regular basis. Marcum Asia is not subject to the determinations announced by the PCAOB on December 16, 2021. The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond. Each year, the PCAOB will determine whether it can inspect and investigate completely accounting firms headquartered in mainland China and Hong Kong. Furthermore, the Accelerating HFCA Act, which requires that the PCAOB be permitted to inspect the issuer's public accounting firm within two years, may result in the delisting of our Company in the future if the PCAOB is unable to inspect our accounting firm at such future time. Our securities may be prohibited from trading if our auditor cannot be fully inspected. While the Company's auditor is based in the U.S. and is registered with PCAOB and subject to PCAOB inspection, in the event it is later determined that the PCAOB is unable to inspect or investigate completely the Company's auditor because of a position taken by an authority in a foreign jurisdiction, then such inability could cause trading in the Company's securities to be prohibited under the Accelerating HFCA Act, and ultimately result in a determination by a securities exchange to delist the Company's securities. If trading in our Class A Ordinary Shares is prohibited under the Accelerating HFCA Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our Class A Ordinary Shares. A termination in the trading of our securities or any restriction on the trading in our securities would be expected to have a negative impact on the Company as well as on the value of our securities.

It remains unclear what the SEC's implementation process related to the above rules will entail or what further actions the SEC, the PCAOB or Nasdaq will take to address these issues and what impact those actions will have on the companies that have significant operations in the PRC and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market). In addition, the above amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our Class A Ordinary Shares could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management time.

Furthermore, new laws and regulations or changes in laws and regulations in both the United States and China could affect our ability to list our securities on the Nasdaq Capital Market, which could materially impair the market for and the market price of our securities.

***The custodians or authorized users of our controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.***

Under the PRC law, legal documents for corporate transactions, including agreements and contracts are usually executed using the chop or seal of the signing entity or with the signature of a legal representative whose designation is registered and filed with relevant PRC market regulation administrative authorities.

In order to secure the use of our chops and seals, we have established internal control procedures and rules for using these chops and seals. In any event that the chops and seals are intended to be used, the responsible personnel will submit the application through our office automation system and the application will be verified and approved by authorized employees in accordance with our internal control procedures and rules. In addition, in order to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to authorized employees. Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our employees could abuse their authority, for example, by entering into a contract not approved by us or seeking to gain control of one of our subsidiaries or the VIE. If any employee obtains, misuses or misappropriates our chops and seals or other controlling non-tangible assets for whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from our operations.

 ****

***Increases in labor costs in the PRC may adversely affect our business and our profitability.***

China's economy has experienced increases in labor costs in recent years. China's overall economy and the average wage in China are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our clients by increasing prices for our services, our profitability and results of operations may be materially and adversely affected.

In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the "Labor Contract Law," that became effective in January 2008 and its amendments that became effective in July 2013 and its implementing rules that became effective in September 2008, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees' probation, and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.

We are currently not in full compliance with all PRC labor-related laws and regulations in certain respects. As of the date of this annual report, we have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations. We believe that the estimated unpaid contribution amounts the Company was required to reserve in respect of the social insurance and housing fund contribution is not material. The Company has taken measures to comply with related laws and regulations. Such measures include, but are not limited to, outsourcing our labor-related matters and making payments for unpaid social insurance and housing fund contributions, which may increase the costs of our business and operations. We are endeavoring to have sufficient funds to address our social insurance and housing fund contribution requirements by the end of next year. However, our estimate of unpaid contributions may not be accurate or sufficient and may not be accumulated by such time.

Additionally, the Labor Contract Law provides that enterprises accepting labor dispatch services shall strictly control the number of dispatched workers and the proportion of dispatched workers shall not exceed the percentage prescribed by competent labor administrative departments. The Interim Provisions on Labor Dispatching, issued by the Ministry of Human Resources and Social Security of the People's Republic of China on January 24, 2014, which came into effect on March 1, 2014, require the number of dispatched workers not to exceed 10% of the total number of 1) the employees that are employed directly by an enterprise and 2) the dispatched workers. For more details, please see "Item 4. Information on the Company—B. Business Overview—Regulations—The Labor Law and the Labor Contract Law" and "Item 4. Information on the Company—B. Business Overview—Regulations—The Interim Provisions on Labor Dispatching." The term "labor dispatch" refers to an atypical employment relationship pursuant to which the dispatch work agencies enter into employment agreements with the workers, and then send such dispatched workers to the enterprises which have entered into labor dispatch service agreements with the dispatch work agencies to provide services. In such circumstances, dispatched workers are under the supervision and management of the enterprises they work in. According to the Labor Contract Law, any labor dispatching unit or employer who violates the provisions of such law in respect of labor dispatching will be ordered by the labor administrative authorities to take corrective action within a stipulated period. If such correction is not made within the stipulated period, a fine ranging from RMB5,000 (approximate USD720) to RMB10,000 (approximate USD1,400) per person will be imposed on such labor dispatching unit or employer, and the labor dispatching business permit of such labor dispatching unit will be revoked. Our number of dispatched workers exceeded the 10% limitation required by the *Interim Provisions on Labor Dispatching* in the fiscal year ended December 31, 2022. The Company had taken measures to try to comply with related laws and regulations in the fiscal year ended December 31, 2025. Such measures include, but are not limited to, decreasing the number of dispatched workers and increasing the number of employees and outsourced workers, which is expected to increase the costs of our business and operations. As of the date of this annual report, the number of our dispatched workers is lower than 10% of the total number of the employees directly employed by the Company and the dispatched workers. While we are endeavoring to stay compliant with the *Interim Provisions on Labor Dispatching* and relevant regulations, we can not assure you that we will be able to continue to keep the rate of dispatched workers among our total employees and dispatched workers lower than 10%, as required by the *Interim Provisions on Labor Dispatching*. If we fail to keep the rate of dispatched workers among our total employees and dispatched workers lower than 10%, we may be required by the competent authorities to decrease our number of dispatched workers within a stipulated period. If we fail to correct such shortfall within the prescribed time limit, the relevant administrative authorities may impose a fine ranging from RMB5,000 (approximate USD720) to RMB10,000 (approximate USD1,400) per person upon us. Accordingly, if the relevant PRC authorities determine that we are subject to fines in relation to our failure to decrease the number of our dispatched workers within the prescribed time limit, our business, financial condition, and results of operations may be adversely affected. We believe that the estimated amount of costs in respect of taking the measures to keep the rate of dispatched workers among our total employees and dispatched workers lower than 10% is not material. However, our estimate of costs may not be accurate or sufficient and may not be accumulated by such time.

Other than the social insurance and housing fund contributions and the estimate of costs to maintain or reduce the number of dispatched workers, we are currently not able to quantify the contribution amounts that we will need to make for us to be in full compliance with all PRC labor-related laws and regulations. To the best of our knowledge, as of the date of this annual report, based on all the information available to us, we do not believe that the estimated amount of contributions that we will need to make in order to be in full compliance with all PRC labor-related laws and regulations is material for our business operations. We will continue investigating and monitoring our compliance status in connection with PRC labor-related laws and regulations in order to promptly address any shortfall going forward.

The interpretation and implementation of labor-related laws and regulations are still constantly evolving which may be further amended from time to time. Due to the constant evolution of the labor-related laws, we cannot assure you that our current employment practices will not violate any future labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees, and our business, financial condition and results of operations could be materially and adversely affected.

***Our PRC Affiliated Entities have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations, which may subject us to penalties.***

According to the *PRC Social Insurance Law* and the *Administrative Regulations on the Housing Funds*, companies operating in China are required to participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance, maternity insurance (collectively known as "social insurance"), and housing funds plans, and the employers must pay all or a portion of the social insurance premiums and housing funds for their employees. For more details, please see "Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Related to Employment and Social Welfare—Social Insurance and Housing Fund." The requirement of social insurance and housing fund has not been implemented consistently by the local governments in China given the different levels of economic development in different locations.

Our PRC Affiliated Entities have not made adequate social insurance and housing fund contributions for all employees. We may be required to make up the social insurance contributions as well as to pay late fees at the rate of 0.05% per day of the outstanding amount from the due date. If we fail to make up for the shortfalls within the prescribed time limit, the relevant administrative authorities will impose a fine of one (1) to three (3) times the outstanding amount upon us. With respect to housing fund plans, we may be required to pay and deposit housing funds in full and on time within the prescribed time limit. If we fail to do so, relevant authorities could file applications to competent courts for compulsory enforcement of payment and deposit. Accordingly, if the relevant PRC authorities determine that we shall make supplemental social insurance and housing fund contributions or that we are subject to fines and legal sanctions in relation to our failure to make social insurance and housing fund contributions in full for our employees, our business, financial condition, and results of operations may be adversely affected. However, as of the date of this annual report, the relevant local authorities confirmed in writing that no records of violation were found on our PRC Entities for social insurance and/or housing fund contribution obligations. Further, these PRC Entities have never received any demand or order from the competent authorities.

***PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law***

On July 4, 2014, SAFE issued the *Circular on Issues Concerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles*, or "SAFE Circular 37." According to SAFE Circular 37, prior registration with the local SAFE branch is required for PRC residents, (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed to be PRC residents for foreign exchange administration purpose), in connection with their direct or indirect contribution of domestic assets or interests to offshore special purpose vehicles, or "SPVs." SAFE Circular 37 further requires amendments to the SAFE registrations in the event of any changes with respect to the basic information of the offshore SPV, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore SPV, such as an increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. In February 2015, SAFE promulgated a *Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment*, or "SAFE Notice 13," effective in June 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

In addition to SAFE Circular 37 and SAFE Notice 13, our ability to conduct foreign exchange activities in China may be subject to the interpretation and enforcement of the *Implementation Rules of the Administrative Measures for Individual Foreign Exchange* promulgated by SAFE in January 2007 (as amended and supplemented, the "Individual Foreign Exchange Rules"). Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions, the failure of which may subject such PRC individual to warnings, fines, or other liabilities.

As of the date of this annual report, Mr. Yongxu Liu has completed the initial registrations of SAFE Circular 37 with the qualified banks, as required by the regulations. We may not be informed of the identities of all the PRC residents holding direct or indirect interest in our Company, however, and we have no control over any of our future beneficial owners. Thus, we cannot provide any assurance that our current or future PRC resident beneficial owners will comply with our request to make or obtain any applicable registrations or continuously comply with all registration procedures set forth in these SAFE regulations. Such failure or inability of our PRC residents beneficial owners to comply with these SAFE regulations may subject us or our PRC resident beneficial owners to fines and legal sanctions, restrict our cross-border investment activities, or limit our PRC subsidiary's ability to distribute dividends to or obtain foreign-exchange-dominated loans from us, or prevent us from being able to make distributions or pay dividends, as a result of which our business operations and our ability to distribute profits to you could be materially and adversely affected.

***PRC regulation of parent/subsidiary loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of future financial activities to make loans or additional capital contributions to our PRC subsidiary and to make loans to Shengfeng Logistics, which could materially and adversely affect our liquidity and our ability to fund and expand our business.***

We are an offshore holding company conducting our operations in China through our PRC subsidiary Tianyu, Shengfeng Logistics, and the subsidiaries of Shengfeng Logistics. We may make loans to these entities, or we may make additional capital contributions to Tianyu, or we may establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries.

Most of these ways are subject to PRC regulations and approvals or registration. For example, any loans to Tianyu, which is treated as a foreign-invested enterprise under PRC law, are subject to PRC regulations and foreign exchange loan registrations. For example, loans by us to Tianyu to finance its activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE, or filed with SAFE in its information system. Pursuant to relevant PRC regulations, we may provide loans to Tianyu up to the larger amount of (i) the balance between the registered total investment amount and registered capital of Tianyu, or (ii) twice the amount of the net assets of Tianyu calculated in accordance with the *Circular on Full-Coverage Macro-Prudent Management of Cross-Border Financing*, or the "PBOC Circular 9." Moreover, any medium or long-term loan to be provided by us to Tianyu or other domestic PRC entities must also be filed and registered with the NDRC. We may also decide to finance Tianyu by means of capital contributions. These capital contributions are subject to registration with the State Administration for Market Regulation or its local branch, reporting of foreign investment information with MOFCOM, or registration with other governmental authorities in China. Due to the restrictions imposed on loans in foreign currencies extended to PRC domestic companies, we are not likely to make such loans to Shengfeng Logistics, which is a PRC domestic company. Further, we are not likely to finance the activities of Shengfeng Logistics and the VIE's subsidiaries by means of capital contributions due to regulatory restrictions relating to foreign investment in PRC domestic enterprises, which may be engaged in certain business, such as the Foreign Investment Law, which provides that foreign investors shall not invest in any field with investment prohibited by the negative list for foreign investment access.

On March 30, 2015, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange Capital of Foreign-invested Enterprises, or "SAFE Circular 19," which took effect and replaced previous regulations effective on June 1, 2015. Pursuant to SAFE Circular 19, up to 100% of foreign currency capital of a foreign-invested enterprise may be converted into RMB capital according to the actual operation, and within the business scope, of the enterprise at its will. Although SAFE Circular 19 allows for the use of RMB converted from the foreign currency-denominated capital for equity investments in the PRC, the restrictions continue to apply as to foreign-invested enterprises' use of the converted RMB for purposes beyond their business scope, for entrusted loans or for inter-company RMB loans. On June 9, 2016, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or "SAFE Circular 16," effective on June 9, 2016, which reiterates some rules set forth in Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-affiliated enterprises. Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, to our PRC Subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, including SAFE Circular 19, SAFE Circular 16, and other relevant rules and regulations, we cannot assure you that we will be able to complete the necessary registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to Tianyu, Shengfeng Logistics, and subsidiaries of Shengfeng Logistics, or future capital contributions by us to Tianyu. As a result, uncertainties exist as to our ability to provide prompt financial support to Tianyu, Shengfeng Logistics, or subsidiaries of Shengfeng Logistics when needed. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we received or expect to receive from our offshore offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our business, including our liquidity and our ability to fund and expand our business.

***Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.***

The value of RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China's foreign exchange policies. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of RMB to the U.S. dollar, and RMB appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between RMB and the U.S. dollar remained within a narrow band. Since June 2010, RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between RMB and the U.S. dollar in the future.

Our business is conducted in the PRC, and our books and records are maintained in RMB, which is the currency of the PRC. The financial statements that we file with the SEC and provide to our shareholders are presented in U.S. dollars. Changes in the exchange rates between RMB and U.S. dollar affect the value of our assets and the results of our operations, when presented in U.S. dollars. The value of RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of RMB may materially and adversely affect our cash flows, revenue, and financial condition. Further, since our Class A Ordinary Shares are offered in U.S. dollars, we will need to convert the net proceeds we receive into RMB in order to use the funds for our business. Changes in the conversion rate among the U.S. dollar and RMB will affect the amount of proceeds we will have available for our business.

Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. As of the date of this annual report, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into more hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

***Under the PRC Enterprise Income Tax Law, we may be classified as a PRC "resident enterprise" for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment.***

Under *the PRC Enterprise Income Tax Law*, or the "EIT Law," that became effective in January 2008, an enterprise established outside the PRC with "de facto management bodies" within the PRC is considered a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation rules to the EIT Law, a "de facto management body" is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances, and properties of an enterprise. In addition, a circular, known as "SAT Circular 82," issued in April 2009 by the State Administration of Taxation, or the "SAT," specifies that certain offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if the following are located or resident in the PRC: senior management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision making bodies; key properties, accounting books, company seal, and minutes of board meetings and shareholders' meetings; and half or more of the senior management or directors having voting rights. Further to SAT Circular 82, the SAT issued a bulletin, known as SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT Circular 82 and clarify the reporting and filing obligations of such "Chinese-controlled offshore incorporated resident enterprises." SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and administration on post-determination matters. Although both SAT Circular 82 and SAT Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreign individuals, the determining criteria set forth in SAT Circular 82 and SAT Bulletin 45 may reflect the SAT's general position on how the "de facto management body" test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, PRC enterprise groups, or by PRC or foreign individuals.

If the PRC tax authorities determine that the actual management organ of Shengfeng Cayman is within the territory of China, Shengfeng Cayman may be deemed to be a PRC resident enterprise for PRC enterprise income tax purposes and a number of unfavorable PRC tax consequences could follow. First, we will be subject to the uniform 25% enterprise income tax on our world-wide income, which could materially reduce our net income. In addition, we will also be subject to PRC enterprise income tax reporting obligations. Finally, dividends payable by us to our investors and gains on the sale of our shares may become subject to PRC withholding tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders of our Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in our shares. Although up to the date of this annual report, Shengfeng Cayman has not been notified or informed by the PRC tax authorities that it has been deemed to be a resident enterprise for the purpose of the EIT Law, we cannot assure you that it will not be deemed to be a resident enterprise in the future.

***We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.***

In February 2015, SAT issued a *Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises*, or "SAT Circular 7." SAT Circular 7 provides comprehensive guidelines relating to indirect transfers of PRC taxable assets (including equity interests and real properties of a PRC resident enterprise) by a non-resident enterprise. In addition, in October 2017, SAT issued an *Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises*, or "SAT Circular 37," effective in December 2017, which, among others, amended certain provisions in SAT Circular 7 and further clarify the tax payable declaration obligation by non-resident enterprise. Indirect transfer of equity interest and/or real properties in a PRC resident enterprise by their non-PRC holding companies are subject to SAT Circular 7 and SAT Circular 37.

SAT Circular 7 provides clear criteria for an assessment of reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. As stipulated in SAT Circular 7, indirect transfers of PRC taxable assets are considered as reasonable commercial purposes if the shareholding structure of both transaction parties falls within the following situations: i) the transferor directly or indirectly owns 80% or above equity interest of the transferee, or vice versa; ii) the transferor and the transferee are both 80% or above directly or indirectly owned by the same party; iii) the percentages in bullet points i) and ii) shall be 100% if over 50% the share value of a foreign enterprise is directly or indirectly derived from PRC real properties. Furthermore, SAT Circular 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. Where a non-resident enterprise transfers PRC taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an indirect transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such indirect transfer to the relevant tax authority and the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding, or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

According to SAT Circular 37, where the non-resident enterprise fails to declare the tax payable pursuant to Article 39 of the EIT Law, the tax authority may order it to pay the tax due within required time limits, and the non-resident enterprise shall declare and pay the tax payable within such time limits specified by the tax authority. If the non-resident enterprise, however, voluntarily declares and pays the tax payable before the tax authority orders it to do so within required time limits, it shall be deemed that such enterprise has paid the tax in time.

We face uncertainties as to the reporting and assessment of reasonable commercial purposes and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries, and investments. In the event of being assessed as having no reasonable commercial purposes in an indirect transfer transaction, we may be subject to filing obligations or taxed if we are a transferor in such transactions, and may be subject to withholding obligations (to be specific, a 10% withholding tax for the transfer of equity interests) if we are a transferee in such transactions, under SAT Circular 7 and SAT Circular 37. For transfer of shares by investors who are non-PRC resident enterprises, our PRC subsidiary may be requested to assist in the filing under the SAT circulars. As a result, we may be required to expend valuable resources to comply with the SAT circulars or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that we should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

***Our PRC subsidiary is subject to restrictions on paying dividends or making other payments to us, which may have a material adverse effect on our ability to conduct our business.***

We are a holding company incorporated in the Cayman Islands. We may need dividends and other distributions on equity from our PRC subsidiary to satisfy our liquidity requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If our PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. In addition, the PRC tax authorities may require our PRC subsidiary to adjust its taxable income under the contractual agreements Tianyu currently has in place with Shengfeng Logistics in a manner that would materially and adversely affect its ability to pay dividends and other distribution to us. See *"*Item 3. Key Information—D. Risk Factors*—*Risks Relating to Our Corporate Structure—The VIE Agreements may result in adverse tax consequences."

Current PRC regulations permit our PRC subsidiary to pay dividends to us only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiary is required to set aside at least 10% of its respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our PRC subsidiary may also allocate a portion of its respective after-tax profits based on PRC accounting standards to employee welfare and bonus funds at its discretion. These reserves are not distributable as cash dividends. These limitations on the ability of our PRC subsidiary to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments, or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

***Governmental control of currency conversion may affect the value of your investment and our payment of dividends.***

The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenue in RMB. Under our current corporate structure, Shengfeng Cayman may rely on dividend payments from our PRC subsidiary, Tianyu, to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents. Approval from or registration with appropriate government authorities is, however, required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demand, we may not be able to pay dividends in foreign currencies to our shareholders.

***There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.***

Under the EIT Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to the *Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income*, or the "Double Tax Avoidance Arrangement," a withholding tax rate of 10% may be lowered to 5% if the PRC enterprise is at least 25% held by a Hong Kong enterprise for at least 12 consecutive months prior to distribution of the dividends and is determined by the relevant PRC tax authority to have satisfied other conditions and requirements under the Double Tax Avoidance Arrangement and other applicable PRC laws.

However, based on the *Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties*, or the "SAT Circular 81," which became effective on February 20, 2009, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. According to *Circular on Several Issues regarding the "Beneficial Owner" in Tax Treaties*, which became effective as of April 1, 2018, when determining an applicant's status as the "beneficial owner" regarding tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors will be taken into account. Such factors include whether the business operated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax, grant tax exemption on relevant incomes, or levy tax at an extremely low rate. This circular further requires any applicant who intends to be proved of being the "beneficial owner" to file relevant documents with the relevant tax authorities. Our PRC subsidiary is wholly owned by our Hong Kong subsidiary. However, we cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant PRC tax authority or we will be able to complete the necessary filings with the relevant PRC tax authority and enjoy the preferential withholding tax rate of 5% under the Double Tax Avoidance Arrangement with respect to dividends to be paid by our PRC subsidiary to our Hong Kong subsidiary, in which case, we would be subject to the higher withdrawing tax rate of 10% on dividends received.

***If we become directly subject to the scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price, and reputation.***

U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism, and negative publicity by investors, financial commentators, and regulatory agencies, such as the SEC. Much of the scrutiny, criticism, and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism, and negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism, and negative publicity will have on us, our business, and the price of our Class A Ordinary Shares. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation will be costly and time consuming and distract our management from developing our business. If such allegations are not proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the value of our Class A Ordinary Shares.

***We may be required to obtain permission from Chinese authorities (i) to issue our Class A Ordinary Shares to foreign investors and/or (ii) for the VIE's operations, and if either or both are required and we are not able to obtain such permission in a timely manner, the securities currently being offered may be substantially affected.***

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the "Opinions." The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Furthermore, they proposed to take measures, including promoting the construction of relevant regulatory systems to control the risks and handle the incidents from China-based overseas-listed companies. On February 17, 2023, the CSRC promulgated the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure to the CSRC; (2) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer's audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for initial public offering and listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted. The New Overseas Listing Rules further require Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; and c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

On February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions, which were issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised Provisions were issued under the title the "Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies", and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, including, but not limited, to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. As of the date of this annual report, the revised Provisions have come into effect and we are not aware of any PRC laws or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, nor have we received any inquiry, notice, warning, sanction or any regulatory objection from the CSRC, the CAC, or any other Chinese authorities that have jurisdiction over our operations. However, any failure or perceived failure by the Company, its PRC Subsidiary or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime The Opinions, the Trial Measures, the revised Provisions and any related implementing rules to be enacted may subject us to compliance requirement in the future. We are currently not required to obtain any permission or approval from Chinese authorities to list on U.S. exchanges nor to execute the VIE Agreements. However, if we inadvertently conclude that such permission or approval is not required, or applicable laws, regulations, or interpretations change and the VIE or the holding company are required to obtain such permission or approval in the future and are denied such permission or approval from the Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchanges or continue to offer securities to investors, which could cause significant depreciation of the price of our Class A Ordinary Shares and materially affect the interest of the investors.

According to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies from the CSRC, or the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as the Existing Issuers. Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic company obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been obtained) for their indirect overseas offering and listing prior to March 31, 2023 but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30, 2023. Those that complete their indirect overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings. Within such six-month transition period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing procedures with the CSRC.

On February 24, 2023, the CSRC, together with other PRC government authorities, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the "Confidentiality and Archives Administration Provisions"), which came into effect on March 31, 2023. The Confidentiality and Archives Administration Provisions require, among others, that PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish the confidentiality and archives system, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of PRC government agencies to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting files or copies of important preservation value to the state and society shall be subject to corresponding procedures in accordance with relevant laws and regulations. Any new rules or regulations promulgated in the future in that regard may impose additional requirements or restrictions on us. If we fail to comply with these regulatory requirements, relevant regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds into China, or even take other actions that could materially and adversely affect our business, financial condition, results of operations, prospects and the trading price of our shares.

The Chinese government has exercised and continued to exercise substantial control over virtually every sector of the Chinese economy through regulations and state ownership. Our ability to operate in the PRC may be significantly harmed by changes in its laws and regulations, including those relating to taxation, environment, land use rights, property, cybersecurity and other matters. The central or local governments of these jurisdictions may impose new and stricter regulations or interpretations of existing regulations with little or no advance notice that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including regional or local variations in the implementation of economic policies, could have a significant effect on the economic conditions in China or particular regions thereof, and could result in our divesting ourselves of any interest we then hold in our operations in China.

Furthermore, it is uncertain when and whether we will be required to obtain permission or approval from the PRC government to list on U.S. exchanges or to execute the VIE Agreements in the future, when such permission will be obtained, if at all, or whether it will be denied or rescinded. Although we are currently not required to obtain permission or approval from any of the PRC central or local governments for the VIE's operations and/or the Company's issuance of securities to foreign investors, nor have we received any denial to list on the U.S. exchange or to execute the VIE Agreements, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry. As indicated by the recent statements from the PRC government, the PRC government may take actions to exert more oversight and control over the offerings that are conducted overseas and/or foreign investment in PRC-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or become worthless.

***The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.***

The M&A Rules and recently adopted PRC regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. Mergers or acquisitions that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to MOFCOM when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the "Prior Notification Rules," issued by the State Council in August 2008 is triggered.

In addition, the security review rules issued by MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. Furthermore, according to the security review, foreign investments that would result in acquiring the actual control of assets in certain key sectors, such as critical agricultural products, energy and resources, equipment manufacturing, infrastructure, transport, cultural products and services, information technology, Internet products and services, financial services and technology sectors, are required to obtain approval from designated governmental authorities in advance.

In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from MOFCOM or its local counterparts may delay or inhibit our ability to complete such transactions. It is clear that our business would not be deemed to be in an industry that raises "national defense and security" or "national security" concerns. MOFCOM or other government agencies, however, may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected.

***The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. Any actions by the Chinese government, including any decision to intervene or influence our operations or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to our operation, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.***

The Chinese government has exercised and may continue to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

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As such, the Company's business segments may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

Furthermore, it is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges or enter into VIE Agreements in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange and or enter into VIE Agreements, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry.

**Risks Relating to Our Business and Our Industry**

***Any service disruption experienced by our regional sorting centers, cloud-based order fulfillment centers ("Cloud OFCs"), or service outlets may adversely affect our business operations.***

Our daily operations heavily rely on the orderly performance of our regional sorting centers, Cloud OFCs, service outlets, freight sorting facilities, and storages. Any service disruption due to: automated facilities failures, under-capacity during peak freight volume periods, force majeure events, third-party sabotage and disputes, employee delinquencies, worker strikes, governmental inspections, orders, or mandates, or shutdowns (temporary or permanent) will adversely impact our business operations by causing delays, suspensions, interruptions, or halts. In the event of a service disruption, freights will be redirected to other nearby regional sorting centers, Cloud OFCs, or service outlets, but the rerouting process will likely increase the risks in delay and delivery errors. At the same time, rerouting freights will increase pressures such as capacity and operation in freight sorting, storage, or pickup and delivery to local sorting centers, Cloud OFCs, or service outlets and spread further across the rest of our network. Any of the foregoing events may result in significant operational interruptions and slowdowns, client complaints, and reputational damage.

***We face risks associated with the freight handled through our network.***

We, through the VIE and the VIE's subsidiaries, handle a large volume of freights across our network daily, and we face challenges with respect to the protection and examination of freights. Freights within our network may be stolen, damaged, or lost for various reasons, and we or third-party transportation providers or both may be perceived or found liable for such incidents. In addition, we may fail to screen freight and detect unsafe, prohibited, or restricted items. Unsafe items, such as flammables, explosives, toxic, radioactive, or corrosive items and materials, may damage other freights within our network, injure recipients, and harm the personnel and assets of us and/or third-party transportation providers. Furthermore, if we fail to prevent prohibited or restricted items from entering into our network and if we participate in the transportation and delivery of such items, we may be subject to administrative or even criminal penalties, and if any personal injury or property damage is concurrently caused, we may be further liable for civil compensation.

The transportation of freight also involves inherent risks. We constantly have a large number of vehicles and personnel in transportation, and are therefore subject to risks associated with transportation safety, and the insurance maintained by us may not fully cover the damages caused by transportation related injuries or loss. From time to time, our vehicles and personnel may be involved in transportation accidents, and the freight carried by them may be lost or damaged. In addition, frictions or disputes may occasionally arise from the direct interactions between our pickup and delivery personnel with freight senders and recipients. Personal injuries or property damages may arise if such incidents escalate.

Any of the foregoing could disrupt our services, cause us to incur substantial expenses, and divert the time and attention of our management. We and third-party transportation providers may face claims and incur significant liabilities if found liable or partially liable for any of injuries, damages, or losses. Claims against us may exceed the amount of our insurance coverage, or may not be covered by insurance at all. Governmental authorities may also impose significant fines on us or require us to adopt costly preventive measures. Furthermore, if our services are perceived to be insecure or unsafe by our clients, our business volume may be significantly reduced, and our business, financial condition, and results of operations may be materially and adversely affected.

***Our technology systems are critical to our business operations and growth prospects.***

The satisfactory performance, reliability, and availability of our technology system is critical to our ability to provide high-quality client services. We rely on our proprietary Shengfeng Transportation Management System, or "Shengfeng TMS," to efficiently operate our network, and our warehouse management system, or "WMS," to optimize our warehouse storage and management services. These integrated systems support the smooth performance of certain key functions of our business, such as shipment transportation and tracking management, payment calculation, client services, storage management and order management. In addition, the maintenance and processing of various operating and financial data is essential to the daily operations of our business and formulation of our development strategies. Therefore, our business operations and growth prospects depend, in part, on our ability to maintain and make timely and cost-effective enhancements and upgrades to our technology systems and to introduce innovative additions which can meet changing operational needs. Failure to invest enough in information technology and equipment could cause economic losses and put us at a disadvantage to our competitors. We can provide no assurance that we will be able to keep up with technological improvements or that the technology developed by others will not render our services less competitive or attractive.

Any interruptions caused by telecommunications failures, computer viruses, hacking, or other attempts to harm our systems that result in the unavailability or slowdown of our systems could quickly impact the workflow in a large portion of, if not the entire, network. We can provide no assurance that our current security mechanisms will be sufficient to protect our technology systems from any third-party intrusions, viruses or hacker attacks, information or data theft, or other similar activities. Any such occurrences could disrupt our services, damage our reputation, and harm our results of operations.

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***Failure to renew our current leases or locate desirable alternatives for our facilities could materially and adversely affect our business.***

We, through the VIE and the VIE's subsidiaries, lease properties for a majority of our offices, regional sorting centers, Cloud OFCs and service outlets. We may not be able to successfully extend or renew such leases upon expiration of the current term on commercially reasonable terms or at all, and may therefore be forced to relocate the affected operations. This could disrupt our operations and result in significant relocation expenses, which could adversely affect our business, financial condition, and results of operations. In addition, we compete with other businesses for premises at certain locations or of desirable sizes. As a result, even though we, through the VIE and the VIE's subsidiaries, could extend or renew our leases, rental payments may significantly increase as a result of the high demand for the leased properties. In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations.

Moreover, certain lessors have not provided us with valid ownership certificates. Under the relevant PRC laws and regulations, if the lessors are unable to obtain certificates of title because such properties were built illegally or failed to pass the inspection or other reasons, such lease agreements may be recognized as void and as a result, we may be required to vacate the relevant properties. In addition, if our lessors are not the owners of the properties and they have not obtained consents from the owners or their lessors or permits from the relevant government authorities, our leases could be invalidated. As a result, we may be subject to challenges, lawsuits or other actions taken against us with respect to the properties leased to us that are without valid title certificates from the relevant lessors.

Under PRC laws, all lease agreements are required to be registered with the local housing authorities. Some of our lease agreements have not been registered with the relevant government authorities. Failure to complete these required registrations may expose our landlords, lessors and the Company to potential monetary fines.

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***Our business and results of operations may be materially and adversely affected if we or third-party transportation providers are unable to provide high-quality services to our clients.***

The success of our business largely depends on our ability to maintain and further enhance our service quality. About 17% of our freight transportation services are provided, through the VIE and the VIE's subsidiaries, by our self-owned fleet and the balance is provided by third-party transportation providers. Together with third-party transportation providers, we, through the VIE and the VIE's subsidiaries, provide B2B freight transportation services, cloud storage, and value-added services to our clients. If we or third-party transportation providers are unable to provide services in a timely, reliable, safe, and secure manner, our reputation and client loyalty could be negatively affected. If our client service personnel fail to satisfy client needs and respond effectively to client complaints, we may lose potential or existing clients and experience a decrease in client orders, which could have a material adverse effect on our business, financial condition and results of operations.

***We face intense competition which could adversely affect our results of operations and market share.***

We operate in a highly competitive and fragmented industry. We compete with many local, regional, and national logistics providers including Sinotrans Logistics Ltd., Beijing Changjiu Logistics Co., Ltd., and Kerry Logistics (EAS) Limited. We compete with them based on a number of factors, including service pricing, transportation speed, service offerings, and service quality. In particular, we may face downward pricing pressure from our competitors. If we cannot effectively control our costs to remain competitive, our market share and revenue may decline.

Furthermore, as we diversify service offerings and further expand our client base, we may face competition from existing or new players in those new sectors. In particular, we may face competition from existing or new express delivery service providers which may expand their service offerings to freight transportation and logistics services or adopt a business model disruptive to our business and compete with us for hiring delivery personnel. Similarly, existing players in an adjacent or sub-market may choose to leverage their existing infrastructure and expand their services to serve our clients. If these players succeed in doing so, our business could be encroached by their entrance and adversely affected.

Certain of our current and potential competitors, as well as international logistics operators with presence in China, may have significantly greater resources, longer operating histories, larger client bases, and greater brand recognition than us. They may be acquired by, receive investment from, or enter into strategic relationships with, established and well-financed companies or investors which would help enhance their competitiveness. In view of this, some of our competitors may adopt more aggressive pricing policies or devote greater resources to marketing and promotional campaigns than us. We may not be able to compete successfully against current or future competitors, and competitive pressures may have a material and adverse effect on our business, financial condition, and results of operations.

***We may be subject to catastrophic events.***

A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber-attack, heightened security measures, actual or threatened terrorist attack, strike, civil unrest, pandemic including COVID-19, or other catastrophic event could cause delays in providing services or performing other critical functions. A catastrophic event that results in the destruction or disruption of any of our critical business or information systems could harm our ability to conduct normal business operations and adversely impact our operating results.

***Changes in industry regulations and industrial policies may affect our future performance***.

Providing logistics services requires business licensing and is subject to various laws, administrative rules and industry standards. In order to support the development of the logistics industry, governments at various levels have successively introduced a number of industrial support and encouragement policies.

Pursuant to the Administrative Provisions Concerning the Running of Cargo Vehicles with Out-of-Gauge Goods promulgated by the PRC Ministry of Transport, which was amended and became effective on August 11, 2021, cargo vehicles running on public roads shall not carry cargo weighing more than, and their dimensions shall not exceed, the limits set forth by such provisions. The operation of our vehicle fleet is subject to these provisions. If our trucks are not in compliance with such provisions, we may be required to reduce the length of our trucks or purchase new ones to replace them. Otherwise, we may be subject to penalties if we continue to operate those trucks that exceed the limits set forth in the provisions.

New laws and regulations may be promulgated from time to time and substantial uncertainties exist regarding the interpretation and implementation of current and future PRC laws and regulations applicable to our businesses. If the PRC government promulgates new laws and regulations that require additional approvals or licenses or imposes additional restrictions on our daily operations, it has the authority, among other things, to levy fines, confiscate income, revoke business licenses, and require us to discontinue our relevant business or impose restrictions on the affected portion of our business. Any of these actions by the PRC government may have a material and adverse effect on our results of operations.

***Relevant state policies on environmental protection may affect our future performance.***

Logistics service companies and provides rely on various types and models of transportation vehicles to perform its daily operations, but due to heavy regulations in environmental protection, energy conservation, and emission reductions, an increase in expenses is expected to incurred; which may directly or indirectly affect our future performances.

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***If our clients are able to reduce their logistics and supply chain costs or increase utilization of their internal solutions, our business and operating results may be materially and adversely affected.***

One of the main reasons that clients use contract logistics companies is because traditional logistics is comprised of high cost, high degree of difficulties in association with developing in-house logistics and supply chain expertise, and operational deficiencies. If, however, our clients are able to develop their own logistics and supply chain solutions, increase utilization of their in-house supply chain, reduce their logistics spending, or otherwise choose to terminate our services, our business and operating results may be materially and adversely affected.

***We may not be able to maintain and enhance our ecosystem, which could negatively affect our business and prospects.***

Our ability to maintain our ecosystem that creates strong network effects among our participants is critical to our success. See "Item 4. Information on the Company—B. Business Overview—Our Ecosystem." While our ecosystem provides synergies and economies of scale across services and among our ecosystem participants, the extent to which we are able to maintain and strengthen the attractiveness of our ecosystem depends on our ability to offer a mutually beneficial platform for all participants, maintain the quality of our services and solutions, develop attractive services and solutions that meet the evolving needs of our ecosystem participants, reinforce the scope and scale of our ecosystem, and retain our participants. We must also provide sufficient geographic coverage to cement the effectiveness of our transportation network, continue to utilize data to improve service quality and operational efficiency of all ecosystem participants, and maintain and improve our technology infrastructure as part of our single interoperable system to ensure seamless operations.

In addition, our ecosystem participants may compete with one another, which may complicate the management of our ecosystem. Further, changes made to enhance our ecosystem or balance the interests of participants may be viewed positively by one participant but may have negative effects upon another. If we fail to balance the interests of all participants in our ecosystem, we may fail to further attract and retain additional ecosystem participants, which could adversely impact our business and financial condition.

***We face risks from fuel price fluctuation, especially given recent conflicts among the United States, Israel and Iran.***

Transportation cost is one of the major costs of companies in the contract logistics industry, and fuel cost is a component of transportation cost. Fluctuation of fuel prices will have a certain impact on the profitability of contract logistics service providers. Fuel costs accounted for approximately 1.54% of our total cost of revenue for the fiscal year ended December 31, 2025. Considering the number of vehicles we own, it is estimated that if the fuel price fluctuates by +/- 5%, the cost of revenue may increase or decrease 0.40 million for the current year, which will either decrease or increase our net profit by a maximum of $0.30 million. Fuel costs accounted for approximately 1.62% of our total cost of revenue for the fiscal year ended December 31, 2024. Considering the number of vehicles we own, it is estimated that if the fuel price fluctuates by +/- 5%, the cost of revenue may increase or decrease by $0.37 million for the current year, which will either decrease or increase our net profit by a maximum of $0.28 million. Fuel costs accounted for approximately 2.45% of our total cost of revenue for the fiscal year ended December 31, 2023. Considering the number of vehicles we own, it is estimated that if the fuel price fluctuates by +/- 5%, the cost of revenue may increase or decrease by $0.44 million for the current year, which will either decrease or increase our net profit by a maximum of $0.33 million. If fuel prices rise significantly due to geopolitical conflicts or other reasons in the future, we will experience the pressure of increased costs.

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***Our past growth rates may not be indicative of our future growth, and if we are not able to manage our growth effectively, our business and prospects may be materially and adversely affected.***

Our business has grown substantially in recent years, but our past growth rates may not be indicative of our future growth. Our expansion has placed, and will continue to place, substantial demands on our managerial, operational, technological, and other resources. To manage and support our continued growth, we must continue to improve our operational, administrative, financial, and technological systems, procedures, and controls, and expand, train, and manage our growing employee and agent base. Even if we are able to expand our network as planned, we may not be able to continue to integrate and optimize a larger network. We cannot assure you that our current and planned personnel, systems, procedures, and controls will be adequate to support our future operations. Any failure to effectively and efficiently manage our expansion could materially and adversely affect our ability to capitalize on new business opportunities, which in turn could have a material adverse effect on our results of operations.

***Client demand is difficult to forecast accurately, and as a result we may be unable to make planning and spending decisions to match such demand.***

We make planning and spending decisions, including capacity expansion, procurement commitments, personnel needs, and other resource requirements based on our estimates of client demand. The freight volume we generate from clients can vary significantly and unexpectedly, reducing our ability to accurately estimate future client demand. In particular, we may potentially experience capacity and resource shortages in fulfilling client orders during peak season of e-commerce consumption or following special promotional campaigns on any e-commerce platforms. Failure to meet client demand in a timely fashion or at all adversely affect our financial condition and results of operations.

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***Our future success depends on the continuing efforts of our senior management team and other key personnel, and our business may be harmed if we lose their services.***

Our future success depends heavily upon the continuing services of the members of our senior management team and other key personnel, in particular Mr. Yongxu Liu, our chairman of the board, or "Chairman," and chief executive officer. In addition, because of the importance of training to our business, our team of dedicated training professionals plays a key role in our operations. If one or more of our senior executives or other key personnel, including key training personnel, are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, and our business may be disrupted and our financial condition and results of operations may be materially and adversely affected. Competition for senior management and key personnel is intense, the pool of qualified candidates is very limited, and we may not be able to retain the services of our senior executives or key personnel, or attract and retain high-quality senior executives or key personnel in the future. As is customary in the PRC, we do not have insurance coverage for the loss of our senior management team or other key personnel.

In addition, if any member of our senior management team or any of our other key personnel joins a competitor or forms a competing company, we may lose clients, sensitive trade information, and key professionals and staff members. Each of our executive officers and key employees has entered into an employment agreement with us which contains confidentiality and non-competition provisions. These agreements generally have an initial term of three years, and are automatically extended for successive one-year terms unless terminated earlier pursuant to the terms of the agreement. If any disputes arise between any of our senior executives or key personnel and us, we cannot assure you of the extent to which any of these agreements may be enforced.

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***We use third-party services in connection with our business, and any disruption to these services could result in a disruption to our business, negative publicity, and a slowdown in the growth of our customer base, materially and adversely affecting our business, financial condition, and results of operations.***

Our business depends on the services provided by, and relationships with, various third parties, including third-party transportation providers, among others. For the fiscal years ended December 31, 2025, 2024 and 2023, about 84%, 83% and 77% of our freight transportation services were provided by third-party transportation providers, respectively, which included owner-operators of a single truck, private fleets, and large trucking companies. Several third-party transportation providers contributed a significant part of the total cost of revenue of the Company. In particular, for the fiscal year ended December 31, 2025, Hubei LuGe Logistics Co., Ltd. contributed approximately 18.4% of total cost of revenues of the Company and Zhongbao Zhiyun (Huadian) Logistics Technology Co., Ltd. contributed approximately 18.1% of total cost of revenues of the Company. For the year ended December 31, 2024, Hubei LuGe Logistics Co., Ltd. contributed approximately 22.0% of total cost of revenues of the Company and Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 12.3% of total cost of revenues of the Company. For the fiscal year ended December 31, 2023, Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 32.7% of the total cost of revenue of the Company. The failure of these and other third parties to perform in compliance with our agreements may negatively impact our business.

***Damages to brand image and corporate reputation could materially and adversely impact our business.***

We believe our brand image and corporate reputation play an increasingly important role in enhancing our competitiveness and maintaining our business growth. Many factors, some of which are beyond our control, may negatively impact our brand image and corporate reputation if not properly managed. These factors include our ability to provide superior services to our clients, successfully conduct marketing and promotional activities, manage complaints and events of negative publicity, and maintain positive perception of our Company, our peers, and the contract logistics industry in general. Any actual or perceived deterioration of our service quality, which is based on an array of factors including client satisfaction, rate of complaint, and rate of accident, could subject us to damages such as loss of important clients. Any negative publicity against us or our peers could cause damages to our corporate reputation and changes to the government policies and regulatory environment. If we are unable to promote our brand image and protect our corporate reputation, we may not be able to maintain and grow our client base, and our business and growth prospects may be adversely affected.

***We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.***

We regard our trademarks, domain names, trade secrets, proprietary technologies, and other intellectual property as critical to our business. We rely on a combination of intellectual property laws and contractual arrangements to protect our proprietary rights. It is often difficult to register, maintain, and enforce intellectual property rights in China. Statutory laws and regulations are subject to judicial interpretation and enforcement and may not be applied consistently due to the lack of clear guidance on statutory interpretation. Confidentiality agreements and license agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in China. Policing any unauthorized use of our intellectual property is difficult and costly and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition, and results of operations.

***Our business generates and processes a large quantity of data, and improper handling of or unauthorized access to such data may adversely affect our business. In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our continued listing on Nasdaq, our financial condition, results of operations, and the subsequent offering.***

Our business involves collecting and retaining certain internal and end customer personal data. For example, our PRC Subsidiaries collect end customer's personal information in the ordinary course of business. We and our PRC Subsidiaries also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customers, employees and company data is critical to our business. Our customers and employees expect that we and our PRC Subsidiaries will adequately protect their personal information. We and our PRC Subsidiaries are required by applicable laws to keep strictly confidential the personal information that we and our and our PRC Subsidiaries collect, and to take adequate security measures to safeguard such information. However, we face risks related to complying with applicable laws, rules, and regulations relating to the collection, use, disclosure, and security of personal information, as well as any requests from regulatory and government authorities relating to such data. We could be subject to cybersecurity review in the future.

The PRC regulatory and enforcement regime with regard to data security and data protection has continued to evolve. There are uncertainties on how certain laws and regulations will be implemented in practice. PRC regulators have been increasingly focused on regulating data security and data protection. We expect that these areas will receive greater attention from regulators, as well as attract public scrutiny and attention going forward. This greater attention, scrutiny, and enforcement, including more frequent inspections, could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection. If we are unable to manage these risks, our reputation and results of operations could be materially and adversely affected. See "Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Relating to Internet Security."

The Cybersecurity Law, which was adopted by the National People's Congress on November 7, 2016, amended on October 28, 2025, and came into force on January 1, 2026, provides that network operators must not, without users' consent, collect their personal information, and may only collect users' personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations. The Cybersecurity Law also provides that personal information and important data collected and generated by a critical information infrastructure operator ("CIIO") in the course of its operations in China must be stored in China. Due to the lack of further interpretations, the exact scope of what constitute a "CIIO" remains unclear.

On June 10, 2021, the Standing Committee of the National People's Congress promulgated the Data Security Law which took effect in September 2021. The Data Security Law requires that data shall not be collected by theft or other illegal means, and it also provides that a data classification and hierarchical protection system. The data classification and hierarchical protection system protects data according to its importance in economic and social development, and the damages it may cause to national security, public interests, or the legitimate rights and interests of individuals and organizations if the data is falsified, damaged, disclosed, illegally obtained or illegally used, which protection system is expected to be built by the state for data security in the near future. In addition, on August 30, 2024, The State Council promulgated the Administration Measures for Cyber Data Security, or the "Cyber Data Security Measure", which took effect on January 1, 2025. The Cyber Data Security Measure provides that network data processors processing personal information of more than 10 million users shall also comply with the provisions governing important data processor, including but not limited to: important data processor shall specify the person in charge of network data security and the management body for network data security. The management body for network data security shall perform the following responsibilities of network data security protection: (a) formulating and implementing network data security management systems and operation procedures as well as emergency response plans for network data security incidents; (b) organizing activities such as network data security risk monitoring, risk assessment, emergency drills, publicity, education and training on a regular basis, and promptly disposing of network data security risks and incidents; and (c) accepting and handling complaints and reports about network data security. On December 28, 2021, the CAC, the NDRC, the Ministry of Industry and Information Technology, or "MIIT," the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, the Ministry of Commerce, People's Bank of China, or "PBOC," the State Administration for Market Regulation, or "SAMR," the State Administration of Radio and Television, CSRC, the State Secrecy Administration and the State Cryptography Administration jointly promulgated the Cybersecurity Review Measures, or the "Cybersecurity Review Measures," which became effective on February 15, 2022. Pursuant to the Cybersecurity Review Measures, if critical information infrastructure operators purchase network products and services, or network platform operators conduct data processing activities that affect or may affect national security, they will be subject to cybersecurity review. A network platform operator holding more than one million users/users' individual information also shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously used by foreign governments and risk of network data security after going public overseas. The Cybersecurity Review Measures also provide the following key points: (i) companies who are engaged in data processing are also subject to the regulatory scope; (ii) the CSRC is included as one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review working mechanism; and (iii) the risks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or transmitted to overseas parties and the risks of critical information infrastructure, core data, material data or large amounts of personal information being influenced, controlled or used maliciously shall be collectively taken into consideration during the cybersecurity review process.

On July 7, 2022, the CAC published the Outbound Data Transfer Security Assessment Measures (the "Outbound Data Transfer Security Assessment Measures"), which became effective on September 1, 2022, specifies the circumstances in which data processors providing data outbound shall apply for outbound data transfer security assessment coordinated by the CAC, and applies to: (i) any data processor that transfers important data overseas; (ii) any critical information infrastructure operator or data processor that processes personal information of over 1 million people and provides such personal information overseas; (iii) any data processor that provides personal information overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people overseas since January 1st of the previous year and; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC. However, the Outbound Data Transfer Security Assessment Measures do not clarify the other circumstances under which the CAC would require the outbound data transfer security assessment, which leaves additional uncertainty in its application and enforcement. If we are deemed to be a data handler providing important data outbound, we could be subject to the outbound data security assessment with the national Cyberspace Administration as mentioned above. As of the date of this annual report, we believe we do not meet the circumstances mentioned above that would require an application for a security assessment for outbound data transfer to the CAC.

As of the date of this annual report, we have not received any notice from any authorities identifying us as a CIIO or requiring us to undertake a cybersecurity review by the CAC. We also believe we are not subject to the cybersecurity review by the CAC, given that: (i) we presently possesses personal information of less than one (1) million individual users in our business operations as of the date of this annual report; and (ii) each of our PRC Subsidiaries is not a CIIO, as neither of them has been notified by the competent PRC government authorities for such purposes; and (iii) data processed in our business is less likely to have a bearing on national security, thus it may not be classified as core or important data by the authorities. However, there remains uncertainty as to how the Cybersecurity Review Measures will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we expect to take all reasonable measures and actions to comply. We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws should they be deemed applicable to our operations. We may be required to suspend new user registration in China or experience other disruptions to our operations should we be required to have a cybersecurity review by the CAC. Any cybersecurity review could also result in negative publicity with respect to our Company, diversion of our managerial and financial resources, and decrease in value of our Class A Ordinary Shares. There is no certainty as to how such review or prescribed actions would impact our operations and we cannot guarantee that any clearance can be obtained or any actions that may be required can be taken in a timely manner, or at all. For instance, if we or any of our PRC Subsidiaries are deemed to be a critical information infrastructure operator or if the number of individual end customers in our business operations increases to or even exceeds one (1) million, we and/or our PRC Subsidiaries may be still required to undertake a cybersecurity review by the CAC, and if so, we or our PRC Subsidiaries may not be able to pass such review in a timely manner or at all. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension of business, website closure, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions against us, which could materially and adversely affect our business and impede our ability to continue our operations.

We, through the VIE and the VIE's subsidiaries, currently offer our mobile and desktop applications in China, and use authorization systems which granted different users with different access authority based on their positions and roles, to protect personal information in our system for data security protection. Although we have taken measures to protect personal information and privacy in our systems and platforms, we can provide no assurance that the measures we have taken are effective and that our systems and platforms are not subject to data breach. The regulatory requirements with respect to cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, and significant changes, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, may subject us to government enforcement actions and investigations, fines, penalties, suspension or disruption of our operations, among other things.

We also grant limited access to specified data on our technology platform to certain other ecosystem participants. These third parties face the same challenges and risks inherent in handling and protecting large volumes of data. Any system failure or security breach or lapse on our part or on the part of any of such third parties that results in the release of user data could harm our reputation and brand and, consequently, our business, in addition to exposing us to potential legal liability.

See "Item 4. Information on the Company—B. Business Overview—Regulations—Regulations relating to Internet Information Security and Privacy Protection*."*

***We have limited insurance coverage which could expose us to significant costs and business disruption.***

We maintain various insurance policies to safeguard against risks and unexpected events. We, through the VIE and the VIE's subsidiaries, have purchased compulsory motor vehicle liability insurance and commercial insurance such as automobile third-party liability insurance, property insurance, and cargo insurance. We, through the VIE and the VIE's subsidiaries, have purchased employer liability insurance. We also provide work-related injury insurance to our employees. We are not legally required to maintain insurance for freight transportation of non-hazardous items. We do not maintain business interruption insurance, nor do we maintain key-man life insurance. We cannot assure you that our insurance coverage is sufficient to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policies on a timely basis, or at all. If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition, and results of operations could be materially and adversely affected.

***If we fail to comply with regulations on commercial franchising may result in penalties to us.***

Pursuant to the Regulations on Commercial Franchising promulgated by the State Council in February 2007 and Provisions on Administration of the Record Filing of Commercial Franchises issued by Ministry of Commerce in December 2011 and amended on December 2023, collectively the Regulations and Provisions on Commercial Franchising, commercial franchising refers to the business activities where an enterprise that possesses the registered trademarks, enterprise logos, patents, proprietary technology, or any other business resources allows such business resources to be used by another business operator through contract and the franchisee follows the uniform business model to conduct business operation and pay franchising fees according to the contract. We and certain of our network partners may therefore be subject to regulations on commercial franchising. Under the relevant regulations, we may be required to file our cooperation arrangements with the network partners with the Ministry of Commerce or its local counterparts, but we have not made such filings. As of the date of this annual report, we have not received any order from any governmental authorities to make such filing. If relevant authorities determine that we have failed to report franchising activities in accordance with the regulations, we may be subject to fines ranging from RMB10,000 (approximately USD1,400) to RMB50,000 (approximately USD7,200) and if we fail to comply within the rectification period determined by the competent governmental authority, we may be subject to an additional fine ranging from RMB50,000 (approximately USD7,200) to RMB100,000 (approximately USD14,000) and the relevant authority may issue a public reprimand.

***We face challenges associated with diversifying our service offerings.***

We, through the VIE and the VIE's subsidiaries, have in the past launched new service lines such as cloud storage services and other initiatives, and intend to continue to diversify our service offerings in the future. New services or new types of clients may involve risks and challenges we do not currently face. Such new initiatives may require us to devote significant financial and managerial resources and may not perform as expected.

In addition, we may not be able to successfully anticipate and address client demand and preferences in connection with new service offerings and our existing network and facilities may not be adaptable to the new services or clients. For example, different service offerings may impose different requirements and service standards. We may also be inexperienced with the operating models and cost structures associated with a new type of client or service offerings. If we take ineffective measures and cannot promptly adopt new and more effective measures, we may suffer losses. Further, we may not be able to ensure adequate service quality, and therefore may receive complaints or incur costly liability claims, which would harm our overall reputation and financial performance. We may not be able to achieve profitability or recoup our investments with respect to any new services or new types of clients in time or at all.

**Risks Relating to Our Class A Ordinary Shares and the Trading Market**

***If we fail to establish and maintain an effective system of internal control over financial reporting, our ability to accurately and timely report our financial results or prevent fraud may be adversely affected, and investor confidence and the market price of our Class A Ordinary Shares may be adversely impacted.***

We are subject to reporting obligations under U.S. securities laws. The SEC adopted rules pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 requiring every public company to include a management report on such company's internal control over financial reporting in its annual report, which contains management's assessment of the effectiveness of its internal control over financial reporting.

Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in preparing our consolidated financial statements as of and for the year ended December 31, 2025, we have identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the PCAOB, and other control deficiencies. The material weaknesses identified are (i) lack of sufficient in-house personnel in our accounting department with sufficient knowledge of the U.S. GAAP and SEC reporting rules and (ii) lack of proper controls designed and implemented in IT environment and IT general control activities, which mainly associated with areas of change management, access / logical security. See "Item 15. Controls and Procedures—Disclosure Controls and Procedures".

Our management is currently in the process of evaluating the steps necessary to remediate the ineffectiveness, such as (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting functions and to set up a financial and system control framework; (ii) implementing more frequent U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; and (iii) strengthening IT team and implementing a set of IT control with formal documentation of polices and controls in place. Measures that we expect to implement may not fully address the material weakness in our internal control over financial reporting and we may not be able to conclude that the material weakness has been fully remedied.

Failure to correct the material weakness and other control deficiencies or failure to discover and address any other control deficiencies could result in inaccuracies in our consolidated financial statements and could also impair our ability to comply with applicable financial reporting requirements and make related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations, and prospects, as well as the trading price of our Class A Ordinary Shares, may be materially and adversely affected. Due to the material weakness in our internal control over financial reporting as described above, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025. This could adversely affect the market price of our Class A Ordinary Shares due to a loss of investor confidence in the reliability of our reporting processes.

***The dual class structure of our ordinary shares has the effect of concentrating voting control with our Chairman, and his interest may not be aligned with the interests of our other shareholders.***

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We have a dual-class voting structure consisting of Class A Ordinary Shares and Class B Ordinary Shares. Under this structure, holders of Class A Ordinary Shares are entitled, on a vote conducted by way of poll, to one vote per one Class A Ordinary Share, and holders of Class B Ordinary Shares are entitled to 10 votes per one Class B Ordinary Share, which may cause the holders of Class B Ordinary Shares to have an unbalanced, higher concentration of voting power. As of the date of this annual report, Mr. Yongxu Liu, our chief executive officer and Chairman, beneficially owns 41,880,000, or 100%, of our issued Class B Ordinary Shares, representing approximately 91.16% of the voting rights in our Company. As a result, until such time as Mr. Yongxu Liu's voting power is below 50%, Mr. Yongxu Liu as the controlling shareholder has substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. He may take actions that are not in the best interests of us or our other shareholders. These corporate actions may be taken even if they are opposed by our other shareholders. Further, such concentration of voting power may discourage, prevent, or delay the consummation of change of control transactions that shareholders may consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. Future issuances of Class B Ordinary Shares may also be dilutive to the holders of Class A Ordinary Shares. As a result, the market price of our Class A Ordinary Shares could be adversely affected.

***The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A Ordinary Shares.***

Several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our ordinary shares may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A Ordinary Shares.

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***Since we are a "controlled company" within the meaning of the Nasdaq listing rules, we may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.***

Our largest shareholder, Mr. Yongxu Liu, owns more than a majority of the voting power of our outstanding ordinary shares. Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a "controlled company" and is permitted to phase in its compliance with the independent committee requirements. Although we do not intend to rely on the "controlled company" exemptions under the Nasdaq listing rules even if we are a "controlled company," we could elect to rely on these exemptions in the future. If we were to elect to rely on the "controlled company" exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

***Substantial future sales of our Class A Ordinary Shares or the anticipation of future sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary Shares to decline.***

Sales of substantial amounts of our Class A Ordinary Shares in the public market, or the perception that these sales could occur, could cause the market price of our Class A Ordinary Shares to decline. An aggregate of 40,617,513 Class A Ordinary Shares are outstanding as of the date of this annual report. Sales of these shares into the market could cause the market price of our Class A Ordinary Shares to decline.

***We do not intend to pay dividends for the foreseeable future.***

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary Shares increases.

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***If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.***

Any trading market for our Class A Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Class A Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline.

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***The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.***

The trading price of our Class A Ordinary Shares may be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in their trading prices. The trading performances of other Chinese companies' securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of our Class A Ordinary Shares, regardless of our actual operating performance.

The market price of our Class A Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

● actual or anticipated fluctuations in our revenue and other operating results;

● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

● actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

● announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

● lawsuits threatened or filed against us; and

● other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

***The price of our Class A Ordinary Shares could be subject to rapid and substantial volatility. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares.***

There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent initial public offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with a relatively small public float, we may experience greater share price volatility, extreme price run-ups, lower trading volume, and less liquidity than large-capitalization companies. In particular, our Class A Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades, and large spreads in bid and ask prices. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares.

In addition, if the trading volumes of our Class A Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence the price of our Class A Ordinary Shares. This low volume of trades could also cause the price of our Class A Ordinary Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our Class A Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Class A Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Class A Ordinary Shares. A decline in the market price of our Class A Ordinary Shares also could adversely affect our ability to issue additional Class A Ordinary Shares or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our Class A Ordinary Shares will develop or be sustained. If an active market does not develop, holders of our Class A Ordinary Shares may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

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***If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting, and other expenses that we would not incur as a foreign private issuer.***

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors, and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we are not required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently are deemed to be a foreign private issuer, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations.

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***Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.***

As a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq corporate governance listing standards. Nasdaq Listing Rules, however, permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We follow home country practice in lieu of certain requirements of Nasdaq Listing Rules 5620, 5635(a)-(d), 5640, 5250(b)(3) and 5250(d) with respect to certain corporate governance standards (the "**Listing Rules**", each "**Listing Rule**") which may afford less protection to investors. The summaries of the **Listing Rules** and brief statements of our practice are as follows:

**Listing Rule 5620** requires a company listing common stock or voting preferred stock, and their equivalents to hold an annual meeting of shareholders no later than one year after the end of the company's fiscal year-end. However, we follow home country practice where an annual meeting of shareholders is not a requirement. Thus, we do not hold annual meetings of shareholders.

**Listing Rule 5635(a)** requires companies listed on NASDAQ to obtain shareholder approval prior to the issuance of securities in connection with the acquisition of the stock or assets of another company if: **(1)** where, due to the present or potential issuance of common stock, including shares issued pursuant to an earn-out provision or similar type of provision, or securities convertible into or exercisable for common stock, other than a public offering for cash: **(A)** the common stock has or will have upon issuance voting power equal to or in excess of 20% of the voting power outstanding before the issuance of stock or securities convertible into or exercisable for common stock; or **(B)** the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities; or **(2)** any director, officer or Substantial Shareholder (as defined by Listing Rule 5635(e)(3)) of the Company has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the Company or assets to be acquired or in the consideration to be paid in the transaction or series of related transactions and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common shares or voting power of 5% or more. **Listing Rule 5635(b)** requires Companies listed on NASDAQ to obtain shareholder approval prior to the issuance of securities when the issuance or potential issuance will result in a change of control of the Company. **Listing Rule 5635(c)** requires companies listed on NASDAQ to obtain shareholder approval prior to the issuance of securities when a stock option or purchase plan or other equity compensation arrangement is established or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants (with some exceptions). **Listing Rule 5635(d)** requires companies listed on NASDAQ to obtain shareholder approval for a transaction involving the sale, issuance or potential issuance of common stock or securities convertible into or exercisable for common stock, which alone or together with sales by officers, directors, or substantial shareholders, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance at a price less than the lower of (i) the Nasdaq official closing price immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq official closing price of the common stock for the five trading days immediately preceding the signing of the binding agreement. Notwithstanding this general requirement of shareholder approval under **Listing Rules 5635(a)-(d)**, the Cayman Islands do not require shareholder approval prior to any of the foregoing types of issuances. We, therefore, are not required to obtain such shareholder approval prior to entering into a transaction with the potential to issue securities as described above.

**Listing Rule 5640**, pursuant to which the voting rights of existing shareholders of publicly traded common stock registered under Section 12 of the Securities Exchange Act of 1934 may not be disparately reduced or restricted through any corporate action or issuance, which includes without limitation, the adoption of time-phased voting plans, the adoption of capped voting rights plans, the issuance of super-voting stock, or the issuance of stock with voting rights less than the per share voting rights of the existing common stock through an exchange offer. The Company is not subject to equivalent restrictions as a matter of Cayman Islands law. Therefore, our investors may be provided less protection since we follow home country practices.

**Listing Rule 5250(b)(3)** requires companies listed on NASDAQ to disclose third party director and nominee compensation set forth in Rule 5250(b)(3) and **Listing Rule 5250(d)** requires companies listed on NASDAQ to distribute annual and interim reports set forth in Rule 5250(d). Notwithstanding **Listing Rules** 5250(b)(3) and (d), we do not disclose third party director and nominee compensation or distribute annual and interim reports as set forth in these two **Listing Rules** because the Cayman Islands does not have such disclosure and distribution requirements.

Finally, while Nasdaq Listing Rule 5605(b)(1) requires listed companies to have, among other things, a majority of its board members to be independent, as a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of these requirements. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Currently, a majority of our board members are independent. However, if we decide to follow home country practice and change our board composition such that independent directors do not constitute a majority of our board of directors, our shareholders may be afforded less protection than they would otherwise enjoy under Nasdaq's corporate governance requirements applicable to U.S. domestic issuers.

***If we cannot satisfy, or continue to satisfy, the continued listing requirements and other rules of the Nasdaq Capital Market, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them.***

Our Class A Ordinary Shares are listed on the Nasdaq Capital Market. In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders' equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we currently meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.

If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including:

● a limited availability for market quotations for our securities;

● reduced liquidity with respect to our securities;

● a determination that our Class A Ordinary Share is a "penny stock," which will require brokers trading in our Class A Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Share;

● limited amount of news and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

***Because we are an "emerging growth company," we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Class A Ordinary Shares.***

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For as long as we remain an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, we will elect to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of shareholder approval of any golden parachute payments not previously approved. Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of more mature companies. If some investors find our Class A Ordinary Shares less attractive as a result, there may be a less active trading market for our Class A Ordinary Shares and our share price may be more volatile.

***The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.***

We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed by our amended and restated memorandum and articles of association, by the Companies Act (Revised) of the Cayman Islands and by the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands and from English common law. Appeals from the Cayman Islands Courts to the Privy Council (which is the final Court of Appeal for British overseas territories such as the Cayman Islands) are binding on the courts in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court and the Court of Appeal are generally of persuasive authority but are not binding in the courts of the Cayman Islands. Decisions of courts in other Commonwealth jurisdictions are similarly of persuasive but not binding authority. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the U.S. In particular, the Cayman Islands has a different body of securities laws relative to the U.S. Therefore, our public shareholders may have more difficulty protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the U.S.

Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. These rights, however, may be provided in a company's amended and restated articles of association. Our amended and restated articles of association allow our shareholders holding shares representing in aggregate not less than 10% of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting.

Advance notice of at least 21 Clear Days' is required for the convening of our annual general shareholders' meeting and at least 14 Clear Days' notice must be given for any other general meeting of our shareholders. A quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third of the total outstanding ordinary shares carrying the right to vote at such general meeting of the Company.

Shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies (other than copies of our memorandum and articles of association, register of mortgages and charges, and any special resolutions passed by our shareholders). Under Cayman Islands law, the names of our current directors can be obtained from a search conducted at the Registrar of Companies. Pursuant to our articles of association, shareholders will not have any right to inspect any account or book or document of the Company except as conferred by Companies Act or as authorized by our directors or by ordinary resolution of our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors, or controlling shareholders than they would as public shareholders of a company incorporated in the U.S.

***You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.***

Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. These rights, however, may be provided in a company's articles of association. Our articles of association allow our shareholders holding shares representing in aggregate not less than 10% of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting. If the directors do not convene such meeting for a date not later than 21 clear days' after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be reimbursed by us.

Advance notice of at least 21 clear days is required for the convening of our annual general shareholders' meeting and at least 14 clear days' notice any other general meeting of our shareholders. A quorum required for a meeting of shareholders consists of at least one or more shareholders present or by proxy, representing not less than one-third of the total issued shares carrying the right to vote at a general meeting of the Company. For these purposes, "clear days" means that period excluding (a) the day when the notice is given or deemed to be given and (b) the day for which it is given or on which it is to take effect.

***If we are classified as a PFIC, United States taxpayers who own our Class A Ordinary Shares may have adverse United States federal income tax consequences.***

A non-U.S. corporation such as ourselves will be classified as a PFIC, for any taxable year if, for such year, either:

● At least 75% of our gross income for the year is passive income; or

● The average percentage of our assets (determined at the end of each quarter) during the taxable year which produce passive income or which are held for the production of passive income is at least 50%.

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our Class A Ordinary Shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

Depending on the amount of cash we have and any other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse U.S. federal income tax consequences for U.S. taxpayers who are shareholders. We will make this determination following the end of any particular tax year.

Although the law in this regard is unclear, we treat the PRC operating entities as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operations of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see "Item 10. Additional Information—E. Taxation—United States Federal Income Taxation—PFIC."

***Anti-takeover provisions in our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control.***

Some provisions of our amended and restated memorandum and articles of association may discourage, delay, or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following:

● provisions that authorize our board of directors to issue shares without any further vote or action by our shareholders; and

● provisions that restrict the ability of our shareholders to call meetings and to propose special matters for consideration at shareholder meetings.

**Item 4. Information on the Company**

**A. *History and Development of the Company*.**

For the history and development of the Company, please refer to "Item 3. Key Information—Our Corporate History."

On March 31, 2023, our Class A Ordinary Shares commenced trading on the Nasdaq Capital Market under the symbol "SFWL." On April 4, 2023, we closed our initial public offering. We raised $9.60 million in gross proceeds from our initial public offering, before deducting underwriting discounts and other related expenses.

**Corporate Information**

Our principal executive office is located at Shengfeng Building, No. 478 Fuxin East Road, Jin'an District, Fuzhou City, Fujian Province, China, and our phone number is +86-591-83619860. Our registered office in the Cayman Islands is located at Suite 102, Cannon Place, P.O. Box 712, North Sound Rd., George Town Grand Cayman, KY1-9006 Cayman Islands, and the phone number of our registered office is +1-(345) 947-7275. We maintain corporate websites at sfwl.com.cn. The information contained in, or accessible from, our websites or any other website does not constitute a part of this annual report. Our agent for service of process in the U.S. is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.

The SEC maintains a website at www.sec.gov that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.

For information regarding our principal capital expenditures, see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures."

**B. *Business Overview***.

**Our Mission**

The VIE is one of the leading contract logistics service providers in China. Since the establishment of the VIE in 2001, our mission has been to provide logistics solutions to companies in need of storage and delivery assistance in China. Through our experienced management team, we apply our well-established management system and operation procedures to assist companies in China to increase efficiency and improve their own management systems with respect to transportation, warehousing and time management. We aim to provide our clients with superior and customized services. Our business slogan is "When you entrust us with your goods, we cherish them as our own."

**Overview**

Contract logistics is a comprehensive process that merges traditional logistics with supply chain management. Contract logistics companies outsource resource management tasks to third-party companies and handle activities such as planning and designing supply chains, designing facilities, processing orders, collecting payments, managing inventories, and providing client services.

We are a contract logistics company with consolidated revenue of approximately $572.5 million, $504.2 million, and $404.1 million for the fiscal years ended December 31, 2025, 2024 and 2023, respectively.

Our integrated logistics solutions are comprised of three business streams: (1) B2B freight transportation services; (2) cloud storage services; and (3) value-added services. Since the VIE's inception, we, through the VIE and the VIE's subsidiaries, have developed extensive and reliable transportation networks in China, covering 382 cities across 32 provinces, as of December 31, 2025. Furthermore, we, through the VIE and the VIE's subsidiaries, serve more than 4,000 manufacturers and trading companies (medium-scale to large-scale) throughout China, including brand names such as CATL Battery, Bright Dairy, SF Express, Schneider Electric, Tesla and Xiaomi.

We, through the VIE and the VIE's subsidiaries, operate on a scalable integrated network model, which we believe is best suited to support our business and maintain the quality of our comprehensive logistics services. As a contract logistics company, we, through the VIE and the VIE's subsidiaries, directly own and operate all of our regional sorting centers, Cloud OFCs and service outlets. We, through the VIE and the VIE's subsidiaries, also directly own and operate our fleets. In order to establish a broader network and provide more efficient services, we, through the VIE and the VIE's subsidiaries, cooperate with third-party transportation providers in providing freight transportation services and with some network partners to promote our business. The integrated network model aims to satisfy the need for reliability, visuality, and timeliness; while we concentrate on the establishment of our network, continuous improvement in our comprehensive logistics services, and construction of our logistics ecosystem. We believe this network model allows us to achieve strong operating results while maintaining and minimizing fixed costs and capital requirements, which results in higher return on earnings and equities.

Operational efficiency, cost management, and competitive pricing are critical to the success of a contract logistics company. As of December 31, 2025, we, through the VIE and the VIE's subsidiaries, have achieved strong operational efficiency through centralized control and management of 26 regional sorting centers, 57 Cloud OFCs, 14 service outlets, approximately 420 self-owned trucks and vehicles, and over 122,000 transportation providers, route planning and optimization, and transportation and management system.

Our goal is to provide high-quality professional services to our clients. We, through the VIE and the VIE's subsidiaries, have established proven systems and procedures that are critical in achieving standardization and control over the quality of services rendered by us and third-party transportation providers. We constantly monitor and attempt to improve on our series of key metrics in service-quality control and management such as late delivery rate, complaint rate, and damaged or lost freight rate, as we strive to become the best in the industry by improving each of the stated key metrics. We intend to improve the stated key metrics in the following ways: (i) formulating relevant service standards and training our operators and partners; (ii) monitoring the operation of key indicators through the system and making timely improvements when problems occur; and (iii) reviewing the actual and target values of key indicators every month to find an optimal solution.

Our total transportation volume increased from approximately 16,510,000 tons for the fiscal year ended December 31, 2024 to approximately 21,349,000 tons for the fiscal year ended December 31, 2025, representing an increase of approximately 29.3%. For the fiscal years ended December 31, 2025 and 2024, net revenues generated from providing our services were approximately $572.5 million and $504.2 million, respectively. Our total net revenue increased by approximately 13.6% during 2025 compared to 2024. We generated operating profit of approximately $16.9 million and $14.7 million for the fiscal years ended December 31, 2025 and 2024, respectively. Our operating profit margin was approximately 2.9% and 2.9% for the fiscal years ended December 31, 2025 and 2024, respectively. We recorded net profit of approximately $12.2 million and $10.8 million for the fiscal years ended December 31, 2025 and 2024, respectively.

Shengfeng Development Limited is a holding company incorporated under the laws of the Cayman Islands and it is not a Chinese operating company. As a holding company with no material operations of its own, its operations have been conducted in China by its subsidiaries and through contractual arrangements, or the VIE Agreements, with a VIE, Shengfeng Logistics, and the VIE's subsidiaries. For accounting purposes, we control and receive the economic benefits of the VIE and the VIE's subsidiaries' business operations through the VIE Agreements, which enables us to consolidate the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statement under U.S. GAAP. Neither we nor our subsidiaries own any equity interests in the VIE or the VIE's subsidiaries. As an investor, you may be subject to unique risks due to our VIE structure. The VIE Agreements are designed to provide our wholly owned subsidiary, Tianyu, with the power, rights, and obligations to Shengfeng Logistics, including control rights and the rights to the assets, property, and revenue of the VIE, as set forth under the VIE Agreements. Our VIE Agreements have not been tested in a court of law in China, as of the date of this annual report, and may not be effective in providing control over the VIE. We are, therefore, subject to risks due to the uncertainty of the interpretation and application of the laws and regulations of the PRC, regarding the VIE and the VIE structure, including, but not limited to, regulatory review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the contractual arrangements with the VIE. We have evaluated the guidance in FASB ASC 810 and determined that we are regarded as the primary beneficiary of the VIE, for accounting purposes, as a result of our direct ownership in Tianyu and the provisions of the VIE Agreements. Accordingly, we treat the VIE and the VIE's subsidiaries as our consolidated entities under U.S. GAAP. We have consolidated the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.

Our Class A Ordinary Shares are shares of our offshore holding company in the Cayman Islands instead of shares of the VIE or the VIE's subsidiaries in China, therefore, you will not directly hold equity interests in the VIE or the VIE's subsidiaries, and you may never directly hold equity interests in the VIE or the VIE's subsidiaries through your investment in our Class A Ordinary Shares. For a description of the VIE Agreements, see "Item 3. Key Information*—*Our VIE Agreements*.*"

**Our Competitive Strengths**

We believe we have the following competitive strengths:

***Contract Logistics Service Provider with Established Operating History in China***

Since 2001, and as of the date of this annual report, we, through the VIE and the VIE's subsidiaries, have operated as a contract logistics service provider for 24 years. Our main business operates as a less than truckload, or "LTL," freight carriers in China, and we, through the VIE and the VIE's subsidiaries, also provide full truckload, "FTL," freight transportation services.

Through years of operation, we, through the VIE and the VIE's subsidiaries, have developed extensive and reliable transportation networks in China, covering 382 cities across 32 provinces, as of December 31, 2025. We, through the VIE and the VIE's subsidiaries, have also established a broad clientele base across more than 4,000 manufacturers and trading companies (medium-scale to large-scale) throughout China, including brand names such as CATL Battery, Bright Dairy, SF Express, Schneider Electric, and Xiaomi.

We have achieved significant growth while maintaining profitability. We had an annual net profit growth of approximately 31.7% in 2023, approximately 5.0% in 2024, and approximately 12.8% in 2025. Our net profit amounted to approximately $12.2 million, $10.8 million and $10.3 million for the fiscal years ended December 31, 2025, 2024 and 2023, respectively; our net profit margins for the fiscal years ended December 31, 2025, 2024 and 2023were approximately 2.1%, 2.1% and 2.6%, respectively.

***Operational Efficiency Driven by Detailed Operational Guidelines***

We, through the VIE, have designed and implemented a series of systematic guidelines as part of our daily business operations to ensure efficiency.

*Systematic Clients Management* – Every client's order is tracked on a real-time basis. Furthermore, we generate a summary report, periodically, for each client with respect to its orders. Our client management systematically allows us to analyze current conditions, which in turn will help us to improve our efficiency and increase our margin. For orders with a gross margin below 5%, we will conduct cost analyzations and adjust unit prices, freight units, freight types, and/or transportation routes accordingly in order to conserve resources and mitigate cost.

Through Shengfeng TMS and our Customer Relationship Management System (the "CRM"), we maintain a profile for each client, which includes the client's information and corresponding contract details, in order to closely and efficiently monitor our performance for each order. We will also follow up with clients on a regular basis to collect feedbacks in order to improve our efficiency. See "—Our Technology Infrastructure."

*Streamline Purchase Orders Management* – Our real-time tracking is available throughout the entire process. Moreover, revenue will be recognized and costs will be incurred at every stage of our operations, i.e. receipt, trunk, and distribution, and split between each cooperative branch. By tracking the whole process, we are able to further meticulously analyze revenue and cost for each order.

*Prioritize Capacity Arrangement* – On a daily basis, every station and routing center will, based on our system's support and their industry experience, adjust, arrange, and prioritize each and every order based on clients, weights, and routes in order to fulfill every order and maximize cost efficiency.

*Finance and Accounting Management* –Part of our management in finance and accounting management process is to utilize our Shengfeng TMS, which allows us to monitor cash inflows and outflows and costs incurred on a real time basis. This process also allows us to analyze and evaluate the profitability of our line-haul and short-haul routes and execute decisions strategically so that we can improve efficiency.

*Interdepartmental Management Meeting* – In order to connect all departments, from headquarters to our 35 operating branches, we hold monthly business meetings during which we summarize our monthly operations, provide feedbacks to market changes, track business progress, boost employee morals, and ensure meeting objectives.

***Scalable Integrated Network Model***

We believe our scalable integrated network model is best suited to support our growth. We believe that we have the capability to utilize our integrated network model to influence, support, and serve these ongoing, high market demands. Our model is well-suited to serve fragmented market clientele base and cope with seasonal demand. Furthermore, our national network's fast growth allows us to provide clients with greater geographic reach at a lower cost.

We, through the VIE and the VIE's subsidiaries, directly own and operate our own regional sorting centers, Cloud OFCs and service outlets. We, through the VIE and the VIE's subsidiaries, also directly own and operate our fleets. In order to establish broader network and provide more efficient services, we, through the VIE and the VIE's subsidiaries, cooperate with third-party transportation providers in providing freight transportation services and with some network partners to promote our business. As of December 31, 2025, the VIE and the VIE's subsidiaries' transportation and sorting network is comprised of 26 regional sorting centers, 57 Cloud OFCs and 14 service outlets. Our network in China covered 382 cities in over 32 provinces as of December 31, 2025.

***Extensive and Growing Ecosystem***

Our ecosystem is comprised of the Company, clients, and transportation providers. We, through the VIE and the VIE's subsidiaries, have established business relationships with over 4,000 medium to large-scale corporate clients, and over 122,000 transportation providers, as of December 31, 2025. Moreover, our reach extends to individual consumers, small and medium corporate clients, and large-cap companies through our network. We, through the VIE and the VIE's subsidiaries, serve various industries and have developed a strong presence in the manufacturing, fast-moving consumer goods and publishing industry.

***Superior Service Quality***

We endeavor to consistently provide superior services to our clients. We believe we have successfully designed, established and streamlined policies and processes to achieve standardization and control over service quality delivered across our networks. We constantly monitor a variety of key service quality metrics, such as delivery date rate, complaint rate, and damaged or lost freight rate, and we continuously strive to improve each of these rates. In addition, we, through the VIE and the VIE's subsidiaries, operate a call center system to provide real-time assistance to our clients 10 hours a day, 7 days a week. We believe that our clients choose our services due to our superior service quality.

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***Experienced Management Team with a Proven Track Record***

Our management has extensive experience, knowledge, and proven track records within the logistics industry, which brings us to a deeper understanding of business operations as well as deep industry connections. The majority of our senior management team has been with the Company for many years, and some of them have been with us since our inception in 2001. Mr. Yongxu Liu, our Chairman, chief executive officer and President, has over 20 years of experience in the logistics industry. Mr. Yongxu Liu founded our Company with a vision to provide accessible, reliable, and high-quality logistics solutions to Chinese businesses and to become a leading player in the industry. Under his leadership, our Company started off in 2001 from being a small-sized logistics service provider with only 60 employees, to becoming one of the largest logistics service providers in China with total transportation volume of approximately 21,349,000 tons for the fiscal year ended December 31, 2025 and we have 1,416 employees as of December 31, 2025. For further details on our directors and senior management, see "Management."

**Our Growth Strategies**

We aspire to be a leading company in the contract logistics market in China, and we intend to pursue the following strategies in furtherance of our growth:

***Expand Market Share***

We currently intend to build our business upon our current position and presence with the goal to become more influential in the contract logistics market in China. We will continue working on enhancing our brand recognition and image, improving value propositions, and achieving greater economies of scale. This will also help us to attract new clients and increase our share of existing clients' logistics budgets through more frequent use of our services.

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***Broaden Our Service Offerings***

We intend to broaden our service offerings. Through our existing transportation network, we aim to provide express delivery services and supplement our current cloud storage services with supply chain management solutions. In addition, we plan to continue enhancing the quality of our services in order to meet the individual needs of our clients and enhance client retention.

***Further Strengthen Our Nationwide Transportation Networks***

We plan to further strengthen our nationwide transportation networks to cover more geographic areas in China and boost future growth. Specifically, we intend to enhance our network density by penetrating into the greater Beijing area, Yangtze River Delta, western China, and northeastern China by setting up additional regional sorting centers, Cloud OFCs, and service outlets as well as expanding our existing ones.

***Enhance Our Technology Platform and Infrastructure***

We intend to continue investing in information technology and equipment in order to enhance our operational efficiency, reliability, and scalability, improve client experience, and reduce costs. Our initiatives include route planning optimization, sorting automation, and supply chain automation. To this end, we plan to hire, train, and retain the best talents in the industry and invest in research and development, including automated, smart, and high-tech warehouse equipment and systems. Our ultimate goal is to be able to fulfill various demands and requests from our clients by providing them with an integrated and one-stop warehousing and distribution services and experience.

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***Transition to Focus on B2B Freight Transportation Services and Outsourcing of Transportation Service.***

We have implemented a policy to focus on developing B2B freight transportation services in anticipation of using our current resources in a more concentrated and efficient manner, as we pursue lower operating costs and higher profits. We aim to focus mainly on contract logistics, primarily catering to and targeting major corporate clients. Therefore, under the new policy, we plan to gradually reduce the number of our service outlets, as their main function is to provide receipt, collection, and small-scale freight shipment orders for individual clients.

In addition, as our integration of internal, self-owned, and external, third-party transportation providers' vehicle resources have become increasingly mature, we have decided to rely more heavily on third-party transportation providers to perform the transportation service and have reduced our fleet of self-owned trucks and vehicles to lower the operating costs. In addition, we intend to gradually phase out a certain proportion of our gasoline-powered trucks and vehicles while simultaneously endeavoring to seek replacement by new energy vehicles to promote the development of green logistics. Consequently, we have disposed of more than 420 self-owned gasoline-powered trucks and vehicles and purchased 16 electric heavy-duty trucks as of the date of this annual report. We have also reduced the number of relevant employees by removing some positions, including drivers, held by the relevant employees after they resigned voluntarily and we have been recruiting fewer workers to fill in the residual vacancies.

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***Pursue Strategic Alliances and Acquisition Opportunities***

From time to time, we may selectively form strategic alliances with other logistics companies or other business partners that bring synergies with our business. We may also selectively pursue acquisitions that will complement our business and operations. As of the date of this annual report, we have not identified any specific strategic alliances or acquisition opportunities.

**Our Service Offerings**

Through our integrated network model, we, through the VIE and the VIE's subsidiaries, provide B2B freight transportation services and cloud storage services to our clients. As an integral part of our freight transportation services and cloud storage services, we, through the VIE and the VIE's subsidiaries, also provide a wide range of value-added logistics services, such as collection on delivery services, customs declaration services, packaging services, and shipment protection services. We, through the VIE and the VIE's subsidiaries, execute these service commitments by investing in and retaining talented employees, developing innovative proprietary systems and processes, and utilizing a network of transportation provided by us and third-party transportation providers. While industry definitions vary, given our extensive contracting to create a flexible network of solutions, we are generally referred to in the industry as a contract logistics company.

The following chart sets out the services provided by us through the VIE and the VIE's subsidiaries.

![](ea028257901_img2.jpg)

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***Freight Transportation Services (Transportation Services)***

Freight transportation service is currently the largest category in our business and source of income. The revenue from freight transportation service increased from approximately $484.8 million, or 96.1% of the total revenue for the fiscal year ended December 31, 2024 to approximately $554.8 million, or 96.9% of the total revenue for the fiscal year ended December 31, 2025.

We, through the VIE and the VIE's subsidiaries, mainly offer FTL freight transportation and LTL freight transportation to enterprises for goods weighing over 500 kilograms as follows:

● *FTL*: We provide professional transportation solutions with accurate FTL and special-truck delivery services. FTL freight transportation services are specially designed for heavy shipments which typically weigh over 3,000 kilograms. We have access to dry vans, flatbeds, hazardous parcel vans, and bulk capacity. We may connect our clients with our transportation network and third-party transportation providers that specialize in their transportation lanes and product types, and optimize the usage of our equipment.

● *LTL*: LTL freight transportation involves the shipment of single or multiple pallets of freight. LTL shipments typically weigh between 15 kilograms and 3,000 kilograms. We mainly provide transportation services for B2B LTL shipments weighing between 500 kilograms and 3,000 kilograms.

We, through the VIE and the VIE's subsidiaries, offer FTL freight transportation services when (i) the freight is large enough to require its own truck, (ii) the freight is fragile and it requires special handling, or (iii) the shipment has time critical or time-definite restrictions on the transit time of the freight; otherwise, we, through the VIE and the VIE's subsidiaries, offer LTL freight transportation services, and our vehicles carry as many different orders of freight as they can manage and deliver them in whichever order best suits the journey. About 16% of our freight transportation services are provided by our self-owned fleet and the rest are provided by third-party transportation providers. For further details on these transportation providers, see *"—*Our Transportation Providers."

To meet our clients' different needs, we typically provide individualized transportation services on a contractual basis. We, through the VIE and the VIE's subsidiaries, usually enter into freight transportation agreements directly with our clients for a series of freight transportation orders over a year. The service pricing, freight routes, settlement terms and other terms will be set forth in the agreements. Other than the clients who enter into service agreements with us for LTL or FTL freight transportation services, we also provide LTL freight transportation services to some retail clients based on the shipment orders generated from time to time.

For the fiscal years ended December 31, 2025, 2024 and 2023, we, through the VIE and the VIE's subsidiaries, provided freight transportation services for 1,871, 1,923 and 2,160 clients, respectively, in the industries of, among others, manufacturing, energy, new energy (vehicle), telecommunications, internet, fashion, fast moving consumer goods, publishing, agriculture and e-commerce.

*Shipment Flow*

The following diagram illustrates the process for the completion of a typical freight transportation order.

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<u>Step 1: Freight Pickup</u>

Our regional sorting center arranges for vans to collect the freight from the senders once it receives shipment orders. These vans are provided either by us or by third-party transportation providers. Through each waybill, we assign a unique tracking number and corresponding barcode to each parcel. The waybills, coupled with our automated systems, enable us to track the status of each individual parcel throughout the entire pickup, sorting, transportation, and delivery process. Our service outlets also receive small shipment orders and collect and send freight to our regional sorting centers from time to time.

<u>Step 2: Freight Sorting and Line-Haul Transportation</u>

 

Upon receiving freight, the regional sorting center will sort, pack, and dispatch the freights to the destination regional sorting center (line-haul transportation services between our regional sorting centers are provided). Barcodes attached to the freight are scanned as they pass each sorting and transportation gateway so that we and our clients can keep track of real-time delivery progress.

<u>Step 3: Freight Delivery</u>

Our destination regional sorting center unloads and sorts the freight, which is then delivered directly to the recipients' sites using vans operated by us or third-party transportation providers. Recipients may also elect to pick up their freight at our delivery outlets. Once the recipient confirms receipt through signature, our whole service cycle is completed and the settlement of delivery service fee promptly appears on our payment settlement system.

For FTL shipments, we generally pick up the freight directly from the clients' sites and transport them to the recipients' destination using our line-haul transportation, without combining orders from different clients for an FTL shipment. For LTL shipments, we combine orders from different clients into an FTL shipment at our sorting centers and transport them to the designated location. Through our line-haul and short-haul transportation lines, regional sorting centers, and information system, we have consolidated freight and freight information to best provide valuable and concise information to our clients.

*Freight Transportation Services Pricing*

 

Our pricing, for each order of freight transportation, depends on the weight, route, type, and value-added services.

We determine our pricing based on various factors, including, but not limited to, operating costs, general market conditions, competitions, and service quality. Our service pricing may also be influenced by market conditions and competitions. From time to time, we may evaluate and adjust our service pricing based on, among other factors, market conditions and operating costs.

***Cloud Storage Services (Warehouse Storage and Management Services)***

We, through the VIE and the VIE's subsidiaries, offer warehouse management, order fulfillment, delivery process management, in-warehouse processing, and inventory optimization management services to our clients to optimize their inventory and delivery process management. We, through the VIE and the VIE's subsidiaries, also provide and arrange transportation services and coordinate shipments from merchants to our Cloud OFCs and from there to other locations designated by our clients as part of our order fulfillment services.

*Inventory Management*

Cloud OFCs differ from traditional warehouses in that they can support direct order fulfillment and dispatch operations in addition to storage functions. They are "cloud-based" because we take full responsibility for the optimal allocation of our clients' inventory into different Cloud OFCs and save our clients from the hassle of day-to-day operations, therefore, from our clients' point of view, these Cloud OFCs are "in the cloud."

As of December 31, 2025, we, through the VIE and the VIE's subsidiaries, directly operated 57 Cloud OFCs across China with a total area of approximately 5,606,976 square feet, among which 21 Cloud OFCs were multistory facilities. All the Cloud OFCs use our technology infrastructure and are connected to various information systems across our platform. Therefore, we can allocate inventory of our clients effectively within our Cloud OFCs and coordinate our services, including subsequent transportation and delivery, accordingly. We constantly monitor the service quality of our Cloud OFCs to ensure we uphold the standard of our services. The following map illustrates our Cloud OFCs network as of December 31, 2025.

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By utilizing our Cloud OFCs, we provide the following services to our clients through the VIE and the VIE's subsidiaries:

● *Storage.* We offer reliable and convenient storage solutions for a variety of commercial needs through the warehouses owned or leased by us. Our warehouse facilities are temperature-controlled, secured, and fire-preventive to protect the integrity of our client's products.

● *Pick and Pack.* After receiving pick tickets from our clients, our team of trained professionals retrieve clients' orders according to the instructions on the corresponding pick tickets and pack the items in preparation for shipping.

● *Kitting and Assembly.* Based on the instructions of our clients, we arrange individual items and assemble the separate pieces into a single ready-to-ship set according to specified combinations.

● *Fulfillment.* We receive orders from clients via our WMS or e-mail. We then generate pick-up tickets, and send these tickets to the warehouse for packing, before the goods are picked up by the clients' designated transportation carriers. Ownership and responsibility of the goods are then transferred to such carriers.

● *Delivery Process Management.* We conduct the handover of the shipments of our clients to their transportation and distribution carriers pursuant to the standard operating procedures set forth in our agreements with the clients.

● *Other Value-added Services.* We also offer some value-added services such as inbound qualify testing, repackaging, labeling, and inventory shelf-life management.

● *Inventory Optimization Management.* We regularly provide our clients with different reports reflecting the status of their storage and inventory so that they can make business decisions accordingly to optimize their inventory structure.

With our WMS, we are able to effectively monitor the capacity of our warehouses on a real-time basis and track each and every movement of a good from its entry into our warehouse to its delivery at its destination, including receiving, storing, packing, and shipping. For details of our WMS, see "—Our technology infrastructure."

We normally enter into 1-year to 5-year service contracts with our cloud storage service clients. Our contracts specify the details of our services based on the client's expected sale volumes and the floor areas to be used. Our contracts typically state the unit price of each service we provide. The amount of revenue we generate depends on the unit price and volume. These services are combined and accounted for as a single performance obligation representing a combined output that the customer has contracted to receive.

*Logistics*

We, through the VIE and the VIE's subsidiaries, have integrated our transportation network and Shengfeng TMS with our client's respective logistics network and systems. By leveraging our technologies and professional expertise, we are capable of creating and designing solutions for optimizing, transforming, and upgrading our clients' supply chains as well as reducing their costs. Our national footprint allows us to provide these services to our clients and their manufacturing partners across many regions of China.

The following diagram illustrates the product flow in a typical supply chain. Each client, based on its individual needs and recommendations from our solution design, may elect to use any combination of the various services we provide at each step of the product flow.

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● *Inbound Logistics.* We craft and optimize inbound logistics networks for our clients to ensure that the flow of goods and materials into their business meets their operational objectives. We use different delivery methods specific to the various goods we handle. For instance, a milk run is a delivery method used to transport mixed loads of raw materials from various suppliers to one client. Instead of having each of our client's suppliers transport raw materials individually, we will visit the client's suppliers on a prearranged date, pick up raw materials, and deliver them to the client.

● *Line-haul and Short-haul Distribution.* We assist clients in the transportation of intermediate goods and products between their factories and warehouses and between warehouses in different regions. Our line-haul and short-haul transportation network makes the process efficient and keeps the costs low for our clients.

● *Outbound Logistics.* We assist clients in the transportation of products to ender users or distribution centers through line-haul and short-haul transportation, regional distribution, or last mile delivery, depending on the destinations and the amount of freight.

● *Reverse Logistics.* In reverse logistics, the goods move from the end user back to the seller or manufacturer, our clients. We help clients manage activities after the initial sales, including returns, refurbishing, packaging, and unsold goods. Through the process, we aim to reduce storage and distribution costs, improve clients' reputation among its end users, satisfy client's needs, and create a more sustainable supply chain for our clients.

***Value-added Services***

In addition to our B2B freight transportation and cloud storage services, we, through the VIE and the VIE's subsidiaries, provide a wide range of value-added services to our clients to meet their diversified needs.

*Collection on delivery services.* Under circumstances where a seller ships goods to a buyer, we provide the seller with the option to authorize us to collect payments from the recipient on its behalf. We charge collection fees equal to 4% of the collected payment for a transaction, and we wire the collected payment back to the seller on the same day of collection.

 

 

*Customs declaration services.* Some of our clients require international shipping services, in response, we provide customs declaration on an as-needed basis to assist them in meeting the legal requirements such as import and export, and trade. We engage third-party service providers that maintain the licenses required under applicable PRC laws and regulations for providing customs declaration services.

*Delivery upstairs services.* We offer door-to-door delivery services. In China, it is customary for logistics companies to charge additional fees based on the floor level. The higher the floor, the higher the fees. Fees are calculated based on a number of factors, including, but not limited to, weight of the goods, destination floor, and elevator availability.

*Packaging services*. We provide shipment packaging services to our clients. In addition to regular packaging materials, we provide a few other options. For instance, we have introduced temperature control materials for packing fruits and vegetables or otherwise perishable goods, shock absorbing materials for packing fragile goods in order to reduce damages that may occur during transportation, and wooden materials for carrying heavier goods.

Other than the regular and necessary packaging protection on shipments we provide at no additional costs to the clients, we also provide additional packaging protection services in two options: active protection and protection upon request. Active protection will be provided free of charge based on our own judgment and experience without requests from our clients. It mostly involves shipments of special products or under certain extreme natural conditions, such as high precision instruments which need special fixing protection, or liquids being sent to cold areas in the winter which need cold resistant protection. Additional packaging protection upon request from our clients will incur additional fees based on the shipment and the requests.

 

*Pay-at-arrival services*. We typically require senders to pay for shipment fees as we collect freight from them. Alternatively, senders may select the pay-at-arrival option, which authorizes us to collect shipment fees from recipients upon freight arrival. In this case, the Company will deliver the shipment upon the receipt of shipment fees from the recipients.

 

*Return proof of delivery*. For this service, we issue receipts with either the recipients' signatures or other credible documentations back to the senders, which allows senders to obtain proof of receipt from recipients. We also offer senders the option to receive and view such receipts electronically on their desktop or phones.

 

*Shipment protection*. We provide shipment protection services to our clients. For the clients who enter into service agreements with us, terms and conditions of shipment insurance are generally set forth under the service agreements, and they are usually responsible for the insurance premium in the amounts as set forth under the agreements on a case-by-case basis. For the retail clients, they can decide on whether to purchase shipment protection insurance policy or not at their sole discretion. If they choose to purchase such insurance policy, they will usually be charged an insurance premium of approximately 0.3% of the declared value of the shipments. If a client has purchased shipment protection services, in case of lost, stolen, or damaged shipment during transit, he/she should first provide us with a claim letter and proof of value. Once we verify those materials, we will reimburse the client's loss accordingly based on the terms and conditions set forth under the service agreements. Afterwards, we will claim for reimbursement from the insurance company based on the insurance policies. The insurance company will then claim for reimbursement from the parties at fault, if the Company is not at fault. If a client has not purchased shipment protection services, then in case of lost, stolen, or damaged shipment during transit, we will reimburse for the client's loss in the amount equal to 1 to 3 times of the shipping fees.

**Our Network and Infrastructure**

Our network consists of regional sorting centers, Cloud OFCs, service outlets, the line-haul and short-haul transportation network operated by us, and our network partners across China.

***Regional Sorting Centers***

Our regional sorting centers are connected by a line-haul transportation network that we operate. They collect freight directly from clients or from service outlets within their coverage area, sort it according to destinations, and dispatch the freight to the designated regional sorting centers. As of December 31, 2025, we, through the VIE and the VIE's subsidiaries, operated 26 regional sorting hubs in Fujian, Guangdong, Shanghai, Beijing, Zhejiang, Hubei, and 16other provinces in China.

The following map shows our nationwide sorting center network as of December 31, 2025.

![](ea028257901_img8.jpg)

Our centralized planning team coordinates the development and expansion of new and existing regional sorting centers, including site selection, facility layout design, and equipment purchase. As we strive to provide seamless and efficient logistic solutions to our clients, we regularly contemplate our opportunities to improve our services. We will consider adding new regional sorting centers if they help optimize our route or increase our capacity in the surrounding areas. We select the locations based on certain factors, including, but not limited to: (i) client density, (ii) ease of access, (iii) rent pricing, (iv) payment method, (v) regulatory compliance, (vi) safety, and (vii) surrounding infrastructure and environment.

We design our regional sorting centers in a uniform manner to deliver a consistent brand image and build in extra capacity for volume growth in the foreseeable future. We hire 20 to 400 employees in each of our regional sorting center, depending on the local freight volume, and we provide each center with sorting and loading equipment.

When planning routes, we prioritize the efficiency of the entire network. We dispatch freight to the regional sorting center closest to its destination even if the regional sorting center and the destination are located in different administrative regions. This reduces transportation time and lowers our and our clients' transportation costs. Our route planning and management benefit from our years of experiences and information technology infrastructures, and they enable us to track freight movement on a real-time basis.

Among our regional sorting centers, 3 are located on lands that we own and the remaining 23 are located on leased lands.

***Cloud OFCs***

See "—Service Offerings by Us—Cloud Storage Services" above.

***Line-haul and Short-haul Transportation Network***

We, through the VIE and the VIE's subsidiaries, operate over 650 line-haul and short-haul routes. We utilize our self-owned fleet in addition to the vehicles owned and operated by third-party transportation providers to form both our line-haul transportation network for long-distance, high-capacity transportation, and our short-haul transportation network for short-distance, low-capacity pickup and delivery. Because we control route planning and vehicle dispatch of our entire line-haul and short-haul transportation system, we plan our routes with the goal to lower transportation costs and transit times.

As of December 31, 2025, our own line-haul fleet is comprised of 284 truck headstocks and over 660 cabinets for ordinary shipments and 4 truck headstocks and 34 cabinets for hazardous shipments. We, through the VIE and the VIE's subsidiaries, invest in our fleet with our own funds so we are able to adjust the ratio of different vehicle models swiftly to react to changes based on operational needs. We mostly use 16-meter-long trucks, which have nearly twice the loading capacity of 9.6-meter-long trucks (commonly used in the industry), to minimize marginal costs and lower unit line-haul transportation costs. The uniform design of our regional sorting centers with extra parking space also allows us to lower transportation cost of freight. To increase our transportation efficiency, we utilize the drop and pull transportation method.

As of December 31, 2025, we, through the VIE and the VIE's subsidiaries, also owned 118 vehicles for our short-haul transportation.

For the fiscal years ended December 31, 2025 and 2024, approximately 16% and 17% of our freight transportation services were provided by our self-owned fleet and the balance was outsourced and provided by independent third-party transportation providers. For the fiscal years ended December 31, 2025 and 2024, we had 138,678 and 135,197 outsourced vehicles for over 18.03 million and 13.69 million shipments, respectively. The price we pay to third-party transportation providers is based on our market insights on cost factors, including (i) toll cost based on route, (ii) fuel cost based on route, type of truck used, and fuel price, and (iii) other costs such as drivers' compensation, depreciation, and maintenance cost. For details on third-party transportation providers, see "—Our Transportation Providers."

***Service Outlets***

As of December 31, 2025, we, through the VIE and the VIE's subsidiaries, operated 14 service outlets across China. Our service outlets, in their assigned geographical areas, will (1) create shipment orders and accept goods for shipment from our LTL clients; (2) deliver goods for shipment to our regional sorting centers for freight transportation; and (3) accept shipments from regional sorting centers for the clients to pick up. Each service outlet typically has 3 to 5 employees.

We will consider adding new service outlets if they help optimize our route or increase our capacity in the surrounding areas. We select the locations based on certain factors, including, but not limited to: (i) client density, (ii) ease of access, (iii) rent pricing, (iv) internal layout, (v) regulatory compliance, and (vi) surrounding infrastructure and environment.

 ****

***Network Partners***

To increase our client base and network coverage, we, through the VIE and the VIE's subsidiaries, have also entered into some network partner agreements. Our network partners will create shipment orders and accept goods for shipment from their clients. Afterwards, they will deliver the goods to our regional sorting centers for our freight transportation. The network partners are solely responsible for the rights and obligations under the service agreements entered into by and between them and their clients. For the fiscal year ended December 31, 2023, our network partners contributed approximately 0.14% of our income from operations. For the fiscal year ended December 31, 2025 and 2024, our network partners contributed 0% of our income from operations because we terminated the Network Partners cooperation model at the end of 2023.

**Our Ecosystem**

We have built a growing ecosystem with various types of participants, including the Company, clients, and transportation providers. As our Company continues to expand, we expect that more participants will join our ecosystem, which in turn, we believe, will bring us more business. The current ecosystem has enhanced our user experience and brand value. We expect this will drive our growth.

The following graphic illustrates the participants and the network effect of our ecosystem.

![](ea028257901_img9.jpg)

***Our Clients***

We, through the VIE and the VIE's subsidiaries, mainly serve clients in connection with the delivery of their products to consumers and other businesses. We have clients in various industries, including manufacturing, energy, new energy (vehicle), telecommunications, internet, fashion, fast moving consumer goods, publishing, agriculture and e-commerce. Our largest clients include CATL Battery, Bright Dairy, SF Express, Schneider Electric, Tesla and Xiaomi. We served 2,145 and 2,209 clients during the fiscal years ended December 31, 2025 and 2024, respectively, and no client accounted for more than 5% of our total revenue during those years. The following table sets forth the top three industries our clients are in by percentage as of December 31, 2025:

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| | |
|:---|:---|
| **Industry** | **Percentage** |
| New energy (vehicle) | 21.71% |
| Fast moving customer goods | 13.82% |
| Manufacturing | 6.92% |
| Total | 42.45% |

---

*Client Service*

We believe that our client service enhances our client loyalty and brand image. Therefore, we provide ongoing trainings to our employees and transportation providers, and we conduct regular performance reviews to ensure the quality of our services.

We, through the VIE and the VIE's subsidiaries, operate a call center system to provide real-time assistance to our clients by our approximately 226 client service representatives 10 hours a day, 7 days a week. Our automated system continues to respond to inquiries outside of the normal business hours and forwards complicated inquiries to our client service representatives for further handling. Our call centers are localized with branch offices in over 22 provinces in China with mostly local hires to leverage their local knowledge. All branches can be reached via a unified number and use the same call system and database. Our call system automatically forwards incoming calls to the local branch near the caller's location. Our client service representatives adhere to the same client service standards nationwide and their local knowledge contributes to enhanced client service effectiveness. At the end of each call, we ask the caller to grade the quality of our client service and a designated call-back team will follow up on all incidences of dissatisfaction. In addition, we hold regular training sessions for our client service representatives and conduct regular performance reviews to ensure that they provide high quality client service.

***Our Transportation Providers***

During the fiscal years ended December 31, 2025, 2024 and 2023, we, through the VIE and the VIE's subsidiaries, cooperated with approximately 122,368, 119,467 and 64,090 transportation providers, respectively. These transportation providers are of all sizes, including owner-operators of a single truck, private fleets, and large trucking companies. All these transportation providers provide vehicles to carry out transportation tasks within our line-haul and short-haul transportation network. The table below sets out the number of each category of transportation providers.

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| | | | |
|:---|:---|:---|:---|
|  | **Fiscal Years Ended<br> December 31,** | **Fiscal Years Ended<br> December 31,** | **Fiscal Years Ended<br> December 31,** |
|  | **2025** | **2024** | **2023** |
| **Owner-operators of a single truck (#)** | 120409 | 117649 | 62263 |
| **Large trucking companies (#)** | 1959 | 1818 | 1827 |
| **Total transportation providers** | 122368 | 119467 | 64090 |

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To strengthen and maintain our relationships with transportation providers, our employees regularly communicate with them and try to assist them by increasing their equipment utilization, reducing their empty miles, and repositioning their equipment.

To ensure that we only cooperate and work with qualified transportation providers, our management formed an evaluation standard to control the quality of their services:

● *Selection*. We carefully examine transportation providers' operating permits, vehicle condition, vehicle model, and whether the vehicles are connected with the BeiDou Navigation Satellite System, a Chinese satellite navigation system, and select qualified and reliable providers. Regarding the cooperation with owner-operators of a single truck and private fleets, we also participate in the process to select drivers. We will verify and examine the drivers' licenses and take into consideration the history of cooperation between the Company and the drivers.

● *Inspection*. After a transportation provider begins cooperating with us, we regularly inspect its performance during different stages of the cooperation according to detailed specifications and timeline for services in our agreement.

● *Review*. We review the performance of each provider and rate them according to quality of services, timeliness, prices, and client services. Depending on the performance, we can increase, decrease, or terminate the cooperation with a provider.

We, through the VIE and the VIE's subsidiaries, typically enter into transportation contracts with providers (i) for a specific period of time, typically one year, or (ii) for a specific order. Our contracts will specify the rights and obligations of the Company and the service providers, including, but not limited to, quantities, specification, unit price, delivery timeline, payment date, liabilities and remedies. Service providers shall be responsible for accidents, including economic loss caused to the Company, if they are at fault.

On September 1, 2020, we, through Shengfeng Logistics, entered into a Road Freight Transportation Platform Cooperation Agreement with Hefei Weitian Yuntong Information Technology Co., Ltd. ("Hefei Weitian"). This agreement provides that Hefei Weitian, including Hubei Luge and Anhui Luge as its designated subsidiaries, as an Internet logistics platform, shall provide road freight transportation services in China to Shengfeng Logistics and its designated subsidiaries, through its platform, on the goods agreed upon and confirmed by both parties from time to time. The term of this agreement was from September 1, 2020 to August 31, 2021. On September 1, 2021, we, through Shengfeng Logistics, renewed this agreement in which the term was from September 1, 2021 to December 31, 2023. On January 1, 2024, we, through Shengfeng Logistics, renewed the agreement in which the new term is from January 1, 2024 to December 31, 2025. Shengfeng Logistics shall pay Hefei Weitian a shipping fee per shipment equal to the amount of shipping fee paid by Hefei Weitian to the actual operator divided by 95.1%. Anhui Luge and Hubei Luge are affiliates under the control of Hefei Weitian. On January 1, 2026, we, through Shengfeng Logistics, renewed the agreement again in which the new term is from January 1, 2026 to December 31, 2026. Pursuant to the renewed agreement, Shengfeng Logistics shall pay Hefei Weitian a shipping fee per shipment equal to the amount of shipping fee paid by Hefei Weitian to the actual operator divided by 93.8%.

**Security and Safety**

We have designed and integrated safety policies and procedures across the full scope of our business. Our key safety measures include:

***Operational Security and Safety***

We, through the VIE and the VIE's subsidiaries, have established security screening protocols to inspect freights before acceptance. We have listed prohibited items for ground transportation such as flammables, explosives, gunpowder, and gasoline. We also implement X-ray screenings to find hazardous or prohibited items. Our safety screening system will continue to evolve in order to meet ever changing technologies.

Workplace safety and transportation safety are important to our business. We have implemented protocols for safety of ground transportation for the operations of our regional sorting centers, Cloud OFCs, and service outlets to minimize risks of accidents. We provide periodic trainings to our employees and transportation providers to recognize hazards, mitigate risks and avoid injuries of themselves and others at work.

***Data Privacy and Safety***

We, through the VIE and the VIE's subsidiaries, have designed and implemented comprehensive procedures and guidelines to regulate our employees and transportation providers' actions in relation to confidential data and information to ensure data security. We employ a variety of technical solutions to prevent and detect risks and vulnerabilities in our data privacy and safety, such as encryption and a firewall. We store and transmit all confidential data and information in encrypted format on separate servers and back up our data and information on a regular basis. We do not share our data or allow third parties to access our data stored on our servers without prior authorization, and we periodically test our systems and procedures to detect and eliminate information security risks and privacy risks.

**Our Technology Infrastructure**

In order to build our core technology systems and software to meet our needs, we, through the VIE and the VIE's subsidiaries, maintain an in-house team for our technology research and development. For details of our research and development, see "—Research and Development." We, through the VIE and the VIE's subsidiaries, have also contracted with some third-party software design companies for licenses to use some of the systems they designed and developed, such as some financial reporting and accounting systems. Our goal is to utilize these technologies to increase efficiency in operations, enhance client experience, and contribute to our success.

Shengfeng TMS is the main system for our transportation services, which is a comprehensive management system that allows us to effectively monitor and manage the various stages of transportation, payment, and client service. Shengfeng TMS has the following key functions:

*Shipment transportation and tracking management.* Our shipments are sorted and dispatched based on the automatic routing calculation function provided by Shengfeng TMS. Our GPS trackers, attached to every vehicle, is synchronized with Shengfeng TMS, which will allow us to track the status and location of each shipment on a real time basis. We also integrate our GPS tracking with BeiDou Navigation Satellite System, WeChat mini programs, and manual recording, also available on our website and official WeChat account. This integration will allow our clients to track shipments and search our service outlet locations and sorting center locations.

*Payment calculation*. Shengfeng TMS tracks each client's order and allows us to view and issue bills to our clients and track client payments.

*Client portal and service support.* We maintain an online client portal, where our clients may register their own accounts. Through our online client portal, our clients may view all of their order histories, track shipment status in real time, and make direct service requests. Our client service representatives have access to Shengfeng TMS's database through which they can provide a better and more effective service to our clients on a real time basis. In particular, our employees will load and unload the shipments according to the preferences of the clients, stored in the TMS system and sent through the portal, and our drivers will provide delivery services based on the instructions and requirements sent from the portal to cater for the needs of the clients.

*Portals for third-party transportation providers.* Our management relies on Shengfeng TMS to effectively manage transport providers. We create an individual profile for each of our service providers and store all corporate records or other material information into the system. Service providers are required to register for accounts on the system prior to their cooperation with us, which allows them to monitor the real-time status and location of each shipment they have been assigned. This also allows us to keep track of those shipments in the hands of third-party transportation providers, as service providers are required to report location and shipments status of transport to Shengfeng TMS on a regular basis. In addition, Shengfeng TMS is also capable of handling payment settlements.

We, through the VIE and the VIE's subsidiaries, own and operate a data center to support our core operational systems such as Shengfeng TMS and WMS. Our data center provides the network infrastructure for our managerial, network safety, authority authentication, data backup, and other non-core functions.

 

In order to optimize our warehouse storage and management services, we utilize our WMS. It has six core functions: a) storage location management; b) order management; c) "First-In, First-Out" management; d) order and operation review; e) bar code management and tracking; and f) storage management. With WMS, we are able to increase the accuracy of goods dispatching, to enhance the efficiency of the operation, to improve the quality management and to control and realize the warehouse management process visualization.

Our WMS operates according to certain rules of warehouse management including rules of pick-up, quality inspection, warehouse and storage separation and arrangement. Rules of the WMS can be set based on the characteristics of different projects on site. Depending on the features of the goods, we perform certain procedures accordingly after their receipt, such as counting, quality inspection, box combination, storage location designation, and storage on the shelves. After the goods are stored in our warehouse, we keep track of their storage locations and we may move them from time to time in preparation of upcoming shipments or for better utilization of storage space. Once we receive any order for shipment, we make plans, create good pick-up orders, pick up the goods and verify the process again to control our accuracy and our service quality. Goods will also be tracked until delivery and such result will be reflected in our system. With our WMS, we are able to effectively monitor the capacity of our warehouses on a real-time basis and track each and every movement of a good from its entry into our warehouse to its delivery at its destination, including receiving, storing, packing, and shipping.

**Intellectual Property**

We rely on a combination of trademark, patents, copyrights, trade secret, and contractual agreements to protect our proprietary rights.

***Trademark***

As of the date of this annual report, we had registered, through the VIE and the VIE's subsidiaries, 37 trademarks, including 34 trademarks with the Trademark Office of the State Administration for Industry and Commerce in China, such as our Company's Chinese name, "Shengfeng (盛丰)," 1 trademark with the Economic Affairs Bureau of Macao Special Administrative Region, 1 trademark with Trade Marks Registry Intellectual Property Department of the Government of the Hong Kong Special Administrative Region and 1 trademark with the Intellectual Property Office of Taiwan.

***Copyright***

 ****

As of the date of this annual report, we had registered, through the VIE and the VIE's subsidiaries, 122 computer software copyrights, including those that relate to Shengfeng TMS, with the PRC National Copyright Administration.

***Patent***

As of the date of this annual report, we had registered, through Guangdong Shengfeng Logistics Co., Ltd., one of the VIE's subsidiaries, 3 invention patents and 5 utility model patents with the National Intellectual Property Administration.

***Domain Name***

As of the date of this annual report, we had registered, through the VIE, 12 domain names, including our main website. The following table summarizes our domain name registration:

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| | |
|:---|:---|
| **Domain Name** | **Territory** |
| sfwl.com.cn | China |
| sfwl.ink | International |
| sfwl.net | International |
| sfwl.online | International |
| sfwl.vip | International |
| tysfwl.com.cn | China |
| tysfwl.com | International |
| tysfwl.cn | China |
| tysfwl.net | International |
| 4008556688.cn | China |
| 4008556688.com.cn | China |
| 4008556688.net | International |

---

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to infringe upon our intellectual property rights. In addition, third parties may initiate litigation against us alleging infringement of their proprietary rights. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position*.*"

As of the date of this annual report, we have not been subject to any material dispute or claims for infringement upon third-party trademarks, licenses, and other intellectual property rights in China.

**Competition**

The contract logistics industry in China is highly fragmented, and we compete with many local, regional, and national logistics companies with more resources including Sinotrans Logistics Ltd., Beijing Changjiu Logistics Co., Ltd., and Kerry Logistics (EAS) Limited. The competitions among contract logistics companies are primarily based off of service pricing, transportation speeds, service offerings, and other factors. We believe our relatively long operating history, superior operational capabilities, well-established national transportation networks, and high-quality services give us the competitive advantages over others.

Entry into the contract logistics industry requires significant initial investment in network construction, equipment and vehicle purchases, and formulation and attraction of new business partners. However, other express delivery service providers or e-commerce companies which may be more established, may utilize or further improve their existing proprietary delivery and transportation infrastructure to compete with us. Furthermore, as we look to expand our service offerings and client base, we may face competition from players in those new sectors.

**Branding and Marketing**

We strive to enhance our brand awareness through high service quality and various marketing initiatives. Shengfeng Logistics was recognized as one of China's outstanding logistics companies by the China Communications and Transportation Association (the "CCTA").

We, through the VIE and the VIE's subsidiaries, launched various programs and marketing activities to promote our brand and services. We rely on various social network mobile applications such as WeChat, a multifunctional platform widely used in China for messaging, social networking, and mobile payments, to distribute business updates and corporate news. Additionally, we offer convenient features such as shipment tracking, service outlet locator, shipment booking through our WeChat official account.

We participate in conferences and exhibitions in different industries to expand our pool of potential clients. We also design and develop different service packages to cater for the demands of clients in different industries so that we could extend our reach of potential clients in similar industries and upstream and downstream suppliers. We pay close attention to the development of innovative industries such as new energy vehicles, shared bikes and Internet TV, and have formed cooperation relationships with companies in such industries.

We bring in new clients through promotion activities by our sales employees, market bidding activities, research on upstream and downstream entities of our current clients, participation in conferences and exhibitions, meetings, calls, referrals, and other activities. In addition, we require our own fleet to apply our logos onto transportation vehicles and personnel uniforms in a consistent and unified manner in order to further enhance our brand recognition during interactions with the clients.

We plan to develop and improve our marketing strategies by focusing on the following: a) maintaining existing client relationships; b) establishing new client relationships; c) enhancing our service quality and efficiency; and d) managing our marketing system and expertise. We will make specific marketing plans and take different approaches based on the various industries, sizes, contract amounts and needs of our clients.

**Employees**

As of December 31, 2025, 2024 and 2023, we, through the VIE and the VIE's subsidiaries, had a total of 1,416, 1,263 and 1,341 full-time employees located in China, respectively. The following table sets forth the breakdown of our employees by function as of December 31, 2025:

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| | | |
|:---|:---|:---|
| **Function** | **Number** | **% of <br> Total** |
| Stevedore | 62 | 4.38% |
| Transportation | 129 | 9.11% |
| Management Administration | 286 | 20.20% |
| Client Service | 226 | 15.96% |
| Operation Support | 649 | 45.83% |
| Sales and Marketing | 45 | 3.18% |
| Technology and Engineering | 19 | 1.34% |
| **Total** | 1416 | 100% |

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In addition to our own full-time employees, our workforce also includes 811 contractors, as of December 31, 2025. In addition, third-party transportation providers retain their own employees according to their individual operational needs.

We believe our employees' compensation packages are competitive and we have created a merit-based work environment that encourages initiative. As a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.

We are required by applicable PRC laws and regulations to participate in various statutory employee benefit plans, including social insurance, medical insurance, maternity insurance, workplace injury insurance, unemployment insurance, and pension benefits through a PRC government-mandated multi-employer defined contribution plan. Pursuant to PRC regulations, we are required to contribute specific percentage of salaries, bonuses, and allowances (up to a maximum amount, specified by local governmental regulations) to the employee benefit plan. As of the date of this annual report, we have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations, but we have taken measures to comply with related laws and regulations. Such measures include, but are not limited to, outsourcing our labor-related matters and making payments for unpaid social insurance and housing fund contributions, which may increase the costs of our business and operation.&nbsp;&nbsp;&nbsp;&nbsp;

We enter into standard labor agreements with our full-time employees with standard confidentiality and non-compete provisions.

We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes.

**Research and Development** 

As information technology plays an essential role in our business and services, we endeavor to develop and adopt advanced information technology to increase efficiency and accuracy in operations, enhance client experience and satisfaction, and ultimately contribute to our growth and success.

We, through the VIE and the VIE's subsidiaries, maintain an in-house R&D team which consists of four departments in Shengfeng Logistics as of the date of this report: Product Department (3 employees and 1 manager), Operation and Maintenance Department (2 employees and 1 manager), TMS Research and Development Department (7 employees and 1 managers) and WMS Research and Development Department (4 employees and 1 manager). All of the said departments are under the supervision of the Director of the Information Section of Shengfeng Logistics. Product Department is mainly responsible for the gathering of product development requests and opinions, coordinating the communication among different parties on product development and providing necessary trainings to support new products. Operation and Maintenance Department is mainly responsible for maintaining the computer network, operating systems, software and hardware, and other equipment to ensure they function properly and are secured. TMS Research and Development Department and WMS Research and Development Department are mainly responsible for the research and development of TMS and WMS. At least once or twice per year, the Director of the Information Section will call for a meeting with certain managers and qualified employees from the R&D departments to discuss the necessity and possibility of new information technology developments and technology upgrades. Any proposal discussed and approved during the meeting will be presented to the management for further discussion and decision.

From time to time, we contract with some third-party software design companies for licenses to use some of the systems they designed and developed, such as some financial reporting and accounting systems. They will also maintain the systems and provide necessary supports to us.

Our passion and dedication for improvement and innovation have been translated into our ability to develop and introduce new and diversified services with a fast pace, converting our advantage in research and development into our commercial competitive advantage in the logistic industry. Through years of effort, as of December 31, 2025, we have registered 122 computer software copyrights with the PRC National Copyright Administration and 3 invention patent with the National Intellectual Property Administration. Since 2012, Shengfeng TMS has been our main system, which is a comprehensive management system that allows us to effectively monitor and manage the various stages of transportation, payment, and client service. It is the Company's plan to continue its dedication to the research and development on information technology to enhance efficiency and client experience.

For more details on our technology infrastructure and intellectual property, please refer to "—Our Technology Infrastructure" and "—Intellectual Property."

**Properties and Facilities**

Our principal executive office is located at Shengfeng Building, No. 478 Fuxin East Road, Jin'an District, Fuzhou City, Fujian Province, People's Republic of China, 350001, where we, through Shengfeng Logistics, lease such property from a related party, Fuzhou Tianyu Shengfeng Industrial Co., Ltd., a company controlled by Yongxu Liu, our CEO and Chairman, with an area of approximately 24,886 square feet, with a lease term originally from November 1, 2020 to October 31, 2022 and was renewed to October 31, 2027 with a monthly rent of RMB115,648 (approximately US$16,412). We also need to pay a monthly property management fee of RMB15,564 (approximately US$2,209). We have priority to renew the lease as long as we use the property for the same purpose, but we are required to notify the landlord at least two months in advance if we would like to renew the lease. For the years ended December 31, 2025, 2024 and 2023, the Company recorded related rent of $273,726, $226,870 and $227,552 in general and administrative expenses, respectively. For the years ended December 31, 2025, 2024 and 2023, the Company recorded related property management fees of $16,589, $46,744 and $17,029 in general and administrative expenses, respectively.

As of December 31, 2025, we, through two of the VIE's subsidiaries, owned 3 office buildings in China with aggregate gross floor areas of approximately 105,586 square feet are on the land we own, and we, through the VIE and the VIE's subsidiaries, leased 16 office buildings in China with aggregate gross floor areas of approximately 74,919 square feet. The terms of such leases range from 1 to 5 years.

In addition, as of December 31, 2025, 3 of the regional sorting centers operated by the VIE and the VIE's subsidiaries with an aggregate gross floor area of approximate 64,838 square feet are on the land we own, and 23 of the regional sorting centers operated by the VIE and the VIE's subsidiaries with an aggregate gross floor area of approximately 1,124,333 square feet are on leased land. The terms of such leases range from 1 to 5 years.

As of the date of December 31, 2025, we, through the VIE and the VIE's subsidiaries, directly operate 57 Cloud OFCs across China to provide warehouse storage and management services. As of December 31, 2025, 3 of the Cloud OFCs operated by the VIE and the VIE's subsidiaries with an aggregate gross floor area of approximate 1,365,642 square feet are on the land we own, and 54 of the Cloud OFCs operated by the VIE and the VIE's subsidiaries with an aggregate gross floor area of approximately 4,241,335 square feet are on the land we leased. The terms of such leases range from 1 to 3 years.

As of the date of December 31, 2025, we, through the VIE and the VIE's subsidiaries, directly operate 14 service outlets across China. As of December 31, 2025, all of the service outlets operated by us with an aggregate gross floor area of approximately 76,356 square feet are on the land we leased. The terms of such leases range from 1 to 5 years.

As of the date of this annual report, we, through one of the VIE's subsidiaries, hold land use rights with respect to one property with an aggregate gross area of approximately 484,700 square feet and an aggregate gross floor area of approximately 592,000 square feet in Ningde City, Fujian Province, China. The land is subject to a 50-year use term.

As of the date of this annual report, we, through one of the VIE's subsidiaries, owned 4 land use rights with aggregate gross areas of approximately 340,388.43 square feet in Tong Zhou District, Beijing, China. The use terms of such land is 50 years. Construction is currently underway on the land for the purpose of developing warehouse storage and management services and establishing a regional sorting center.

The areas of self-owned properties and leased premises are based on the figures specified in the certificates of land use or the corresponding lease agreements.

The following table shows pertinent information of the properties we, through three of the VIE's subsidiaries, own as of December 31, 2025:

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| | | | |
|:---|:---|:---|:---|
| **Location** | **Area <br> (Square Feet)** | **Term of Use** | **Current Use** |
| Tong Zhou <br> District, Beijing, China | 159901.66 | October 31, 1994 to<br> October 30, 2044 | Construction is currently underway as of the date of this annual report. |
| Tong Zhou <br> District, Beijing, China | 155027.65 | October 31, 1994 to<br> October 30, 2044 | Construction is currently underway as of the date of this annual report. |
| Tong Zhou <br> District, Beijing, China | 12531.02 | January 23, 1995 to<br> January 22, 2045 | Construction is currently underway as of the date of this annual report. |
| Tong Zhou <br> District, Beijing, China | 12928.10 | January 23, 1995 to<br> January 22, 2045 | Construction is currently underway as of the date of this annual report. |
| Fuqing City, <br> Fuzhou Province, China | 349132.7 | Until April 10, <br> 2063 | 318,390.98 for Warehouse Storage and Management Services, 28,588.95 for Regional Sorting Center and 2,152.78 for offices |
| Suzhou City, <br> Jiangsu Province, China | 187515.50 | Until December 30,<br> 2056 | 131,319.7 for Warehouse Storage and Management Services and 56,195.8 for offices |
| Suzhou City, <br> Jiangsu Province, China | 406527.71 | Until January 29,<br> 2058 | 370,278.5 for Warehouse Storage and Management Services and 36,249.21 for Regional Sorting Center |
| Ningde City,<br> Fujian Province, China | 592889.96 | Until April 12, <br> 2073 | 545,652.54 for Warehouse Storage and Management Services and 47,237.42 for offices |

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We believe that the facilities that we currently own and lease are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate our future growth.

As of December 31, 2025, we, through the VIE and the VIE's subsidiaries, own line-haul fleet is comprised of 284 truck headstocks and over 660 cabinets for ordinary shipments and 27 truck headstocks and 34 cabinets for hazardous shipments. We also owned 118 vehicles for our short-haul transportation as of the same date.

Tangible properties of our regional sorting centers, Cloud OFCs, service outlets, and line-haul and short-haul transportation network operated by the VIE and the VIE's subsidiaries across China include transportation and electronic equipment.

**Seasonality**

Our operating results have been subject to seasonal trends as a result of, or influenced by, numerous factors, including national holidays, weather patterns, consumer demands, economic conditions, and others. Although seasonal changes have not significantly impacted on our cash flow or affected our operations, we cannot guarantee that it will not adversely impact us in the future.

**Insurance**

We, through the VIE and the VIE's subsidiaries, maintain various insurance policies to safeguard against risks and unexpected events. We have purchased compulsory motor vehicle liability insurance and commercial insurance such as automobile third-party liability insurance, property insurance, and cargo insurance. We have purchased employer liability insurance. We also provide work-related injury insurance to our employees.

We do not purchase insurance for items delivered by us. Instead, our clients may purchase shipment protection services for valuable items, and we will compensate those clients based on the declared value in the event of loss or damage that was caused by us. For more details, please see "—Value-added Services—Shipment Protection." Our clients are responsible for purchasing insurance for hazardous items delivered in the shipments, subject to the provisions set forth under the respective shipping agreements. We do not maintain business interruption insurance nor key-man insurance. Our management will evaluate the adequacy of our insurance coverages from time to time and purchase additional insurance policies as needed.

Unless otherwise set forth in their respective agreements, third-party transportation providers will be responsible solely for the shipment insurance. When an accident occurs, a transportation provider will reimburse and compensate our loss pursuant to our agreements and any third parties' loss. If the transportation provider is not able to compensate the full amount of the loss to us or any other third parties, our insurance company will pay for the compensation under our insurance policies. Afterwards, the transportation provider shall reimburse our insurance company.

**Legal Proceedings**

From time to time, we are subject to legal proceedings, investigations, and claims incidental to the conduct of our business. We are not a party to, nor are we aware of, any legal proceeding, investigation, or claim which, in the opinion of our management, is likely to have an adverse material effect on our business, financial condition, or operation result. We may periodically be subject to legal proceedings, investigations, and claims relating to our business. We may also initiate legal proceedings to protect our rights and interests.

**PRC Regulations**

This section sets forth a summary of the principal laws and regulations relevant to our business and operations in the PRC.

**Regulations Relating to Foreign Investment**

***The PRC Foreign Investment Law***

The Foreign Investment Law, promulgated by the National People's Congress on March 15, 2019, has come into effect on January 1, 2020 and has replaced the major existing laws and regulations governing foreign investment in the PRC, including the Sino-foreign Equity Joint Ventures Enterprises Law, the Sino-foreign Co-operative Enterprises Law, the Wholly Foreign-invested Enterprise Law, and their implementation rules and ancillary regulations. Pursuant to Foreign Investment Law, the existing foreign invested enterprises established prior to the effective date of the Foreign Investment Law may keep their corporate organization forms within five years after the effective date of the Foreign Investment Law before such existing foreign invested enterprise change their organization forms, organization structures, and their activities of foreign-invested enterprises in accordance with the Company Law, the Partnership Enterprise Law and other laws. According to the Foreign Investment Law, "foreign-invested enterprises" thereof refers to enterprises that are wholly or partly invested by foreign investors and registered within China under the PRC laws, "foreign investment" thereof refers to any foreign investor's direct or indirect investment in China, including: (1) establishing foreign-invested enterprises in China either individually or jointly with other investors; (2) obtaining stock shares, stock equity, property shares, other similar interests in Chinese domestic enterprises; (3) investing in new projects in China either individually or jointly with other investors; and (4) making investment through other means provided by laws, administrative regulations, or State Council provisions.

According to the Foreign Investment Law, the State Council will publish or approve to publish a catalogue for special administrative measures, or the "negative list." The Foreign Investment Law grants national treatment to foreign invested entities, except for those foreign invested entities that operate in industries deemed to be either "restricted" or "prohibited" in the "negative list". The NDRC and the MOFCOM promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Edition) (the "2024 National Negative List") on September 6, 2024, effective on November 1, 2024. Compared to the last Special Administrative Measures for Market Access of Foreign Investment (Negative List) promulgated by the NDRC and the MOFCOM in December 2021, the 2024 National Negative List cuts down the number of items restricted or prohibited to foreign investors from 31 to 29, and the restrictive measures on foreign investment access in the manufacturing sector were completely cancelled, resulting in zero restrictions on the manufacturing sector. Therefore, in the manufacturing sector, there is now equal national treatment of domestic and foreign investments.

However, the 2024 Negative List prescribes that any domestic enterprise engaging in businesses prohibited by the Negative Lists that lists, issues securities and trades shares overseas must obtain pre-approval consent from relevant competent regulator; overseas investors must not engage in the operation and management of the enterprise, and the percentage of foreign shareholding is subject to the relevant provisions in the administrative measures for domestic securities investments by foreign investors. The Foreign Investment Law provides that foreign invested entities operating in foreign restricted or prohibited industries will require market entry clearance and other approvals from relevant PRC governmental authorities.

On December 26, 2019 the State Council issued the Implementation Regulations for the Foreign Investment Law, or the Implementation Regulations which came into effect on January 1, 2020. According to the Implementation Regulations, in the event of any discrepancies between the Foreign Investment Law, the Implementation Regulations and relevant provisions on foreign investment promulgated prior to January 1, 2020, the Foreign Investment Law and the Implementation Regulations shall prevail. The Implementation Regulations also indicated that foreign investors that invest in sectors on the Negative List in which foreign investment is restricted shall comply with special management measures with respect to shareholding, senior management personnel and other matters in the Negative List.

***The PRC Company Law***

The formation, operation, and management of corporate entities in China is governed by the PRC Company Law, which was promulgated by the SCNPC on December 29, 1993 and became effective on July 1, 1994. The latest amendment of the PRC Company Law is dated December 29, 2023 ("Company Law (2023)"), which will become effective on July 1, 2024. The PRC Company Law defines a "company" as a limited liability company or a joint stock limited company, both of which have the status of an enterprise legal person, and the liability of shareholders of a limited liability company or a joint stock limited company is limited to the amount of their capital contributions or shareholdings. Company Law (2023) further governs the formation, dissolution, organizational structure, capitalization, and social responsibility of a company, as well as the duties of officers and shareholders. Pursuant to Company Law (2023), all registered capital of a PRC limited liability company subscribed to by a shareholder must be fully paid for by such shareholder within five years from the date of the formation of the limited liability company, unless applicable laws or regulations provide otherwise. The State Counsel's Provisions on Implementing the Registered Capital Recording and Administration System under the PRC Company Law, which was issued on July 1, 2024, allows limited liability companies established on or before June 30, 2024 ("existing LLCs") until June 30, 2027 to adjust their capital contribution payment timeframe to be in compliance with Company Law (2023) if their existing capital contribution period exceeds five years. If the capital contribution period of an existing LLC ends within five years from June 30, 2027, the existing LLC needs not adjust its capital contribution period. However, if the capital contribution period of an existing LLC ends more than five years from June 30, 2027, it must require all capital contributions to be paid within five years from June 30, 2027, i.e., on or before June 30, 2032, and record such adjustments in the company's articles of association. If a limited liability company fails to adjust its capital contribution payment period and registered its capital in accordance with these regulations, the relevant authority such as the State Administration for Market Supervision and its local counterparts shall order the company to make corrections; if the company fails to make corrections within the deadline set by the relevant authority, the authority shall publicize the non-compliance. Pursuant to Company Law (2023), where any shareholder fails to make payment for any of their shares prior to the deadline provided in the company's articles of association, their unpaid equity interests may be forfeited.

**Regulations Relating to Road Transportation**

Pursuant to the PRC Regulations on Road Transportation promulgated by the State Council in April 2004 and most recently amended in July 2023, and the Provisions on Administration of Road Freight Transportation and Stations (Sites) issued by the Ministry of Transportation in June 2005 and most recently amended and effective in March 2026, or the Road Freight Provisions, the business operations of road freight transportation refer to commercial road freight transportation activities that provide public services. The road freight transportation includes general road freight transportation, special road freight transportation, road transportation of large articles, and road transportation of dangerous cargos. Special road freight transportation refers to freight transportation using special vehicles such as vehicles with containers, refrigeration equipment, or tank containers. The Road Freight Provisions set forth detailed requirements with respect to vehicles and drivers.

Under the Road Freight Provisions, anyone engaging in the business of operating road freight transportation or stations (sites) must obtain a road transportation operation permit from the local county-level road transportation administrative bureau, and each vehicle used for road freight transportation must have a road transportation certificate from the same authority. The incorporation of a subsidiary of a road freight transportation operator that intends to engage in road transportation business is subject to the same approval procedure. If a road freight transportation operator intends to establish a branch, it should file with the local road transportation administrative bureau where the branch is to be established.

Although the road transportation operation permits have no limitation with respect to geographical scope, several provincial governments in China, including Shanghai and Beijing, promulgated local rules on administration of road transportation, stipulating that permitted operators of road freight transportation registered in other provinces should also make filings with the local road transportation administrative bureau where it carries out its business.

The VIE and the VIE's subsidiaries have obtained road transportation operation permits to operate general road freight transportation or station (sites).

Pursuant to the Measures for the Administration of Road Transportation Safety of Hazardous Goods, or the "Measures," jointly promulgated by the Ministry of Transport, the Ministry of Industry & Information Technology, the Ministry of Public Security, the Ministry of Ecology and Environment, the Ministry of Emergency Management and the State Administration for Market Regulation in China, which took effect on January 1, 2020, the transportation of hazardous goods with road transportation vehicles and relevant activities shall be governed by the Measures. Under the Measures, carriers of hazardous goods shall carry hazardous goods within the business scope permitted by the competent transport departments. Carriers of hazardous goods shall maintain carrier's liability insurance for the hazardous goods they carry. The Measures set forth detailed requirements with respect to consignors, carriers, loaders and drivers.

**Regulations Relating to Cargo Vehicles**

Pursuant to the Administrative Provisions concerning the Running of Cargo Vehicles with Out-of-Gauge Goods promulgated by the Ministry of Transportation, or the "Cargo Provisions," took effect in August 2016 and most recently amended in August 2021, cargo vehicles running on public roads shall not carry cargo weighing more than the limits prescribed by this regulation and their dimensions shall not exceed those as set forth in the same regulation. Vehicle operators who violate this regulation may be subject to a fine of up to RMB30,000 (approximately $4,300) for each violation. In the event of repeated violations, the regulatory authority may suspend the operating license of the vehicle operator and/or revoke the business operation registration of the relevant vehicle. Under the Cargo Provisions and the Regulations on Protecting Highway Safety promulgated by the State Council in China, or the "Highway Regulations," which took effect on July 1, 2011, in the event of repeated violations, the regulatory authority may suspend the operating license of the vehicle operator and/or revoke the business operation registration of the relevant vehicle. In the event that more than 10% of the total vehicles of any road transportation enterprise are not in compliance with the Highway Regulations in any year, such road transportation enterprise's business shall be suspended for rectification and its road transportation license may be revoked.

We rely on trucks and other vehicles owned and operated by third-party trucking companies, and the operation of our fleet is subject to this new regulation. We have an obligation to educate and manage vehicle operators as well as to urge them to comply with this regulation. We weigh and measure each cargo truck as they enter and leave our hubs and sortation centers to ensure their compliance with this regulation in terms of cargo weight. If any truck is not in compliance with this regulation, we will replace it with another vehicle that complies with this regulation. Otherwise, we may be subject to penalties under this regulation if we operate those trucks that exceed the limits set forth in the regulation.

**Regulations Relating to Product Quality** 

Pursuant to the Product Quality Law of the PRC, or the Product Quality Law, which was promulgated by the Standing Committee of the National People's Congress on February 22, 1993, became effective on September 1, 1993, and was recently amended on December 29, 2018, business operators, including manufacturers and sellers, are required to assume certain obligations in respect of product quality. Violations of the Product Quality Law may result in the imposition of fines. In addition, a company in violation of the Product Quality Law may be ordered to suspend its operations and its business license may be revoked. Criminal liability may be incurred under severe circumstances. A consumer or other victim who suffers injury or property losses due to product defects may demand compensation from the manufacturer as well as from the seller. Where the responsibility lies with the manufacturer, the seller shall, after settling compensation with the consumer, have the right to recover such compensation from the manufacturer, and vice versa.

According to the Civil Code of the PRC, which took effect on January 1, 2021, the producer of a defective product that causes damage to another person shall be liable for the infringement. The infringed party may claim damages from the manufacturer of the product or the seller of the product. If the product defect is caused by the producer, the seller shall have the right to recover the damages from the producer after compensation, and vice versa. With respect to environmental issues, the Law of the People's Republic of China on Liability for Tort emphasizes the principle that polluters are liable for damages caused by environmental pollution, regardless of whether they have violated national environmental protection regulations.

**Regulations Relating to Pricing**

In China, the prices of a small number of products and services are guided or fixed by the government. According to the Pricing Law of the PRC, or the Pricing Law promulgated by the SCNPC on December 29, 1997 and became effective on May 1, 1998, business operators must, as required by the government departments in charge of pricing, mark the prices explicitly and indicate the name, origin of production, specifications and other related particulars clearly. Business operators may not sell products at a premium or charge any fees that are not explicitly indicated. Business operators must not commit the specified unlawful pricing activities, such as colluding with others to manipulate the market price, using false or misleading prices to deceive consumers to transact, or conducting price discrimination against other business operators. Any business operator who fails to comply with the Pricing Law may be subject to administrative sanctions such as warning, ceasing unlawful activities, compensation, confiscating illegal gains and fines. The business operators may be ordered to suspend business for rectification or have their business licenses revoked under severe circumstances.

We are subject to the Pricing Law as a service provider and believe that our pricing activities are currently in compliance with the law in all material aspects.

**Regulations Relating to Leasing**

Pursuant to the Law on Administration of Urban Real Estate of the PRC promulgated by the SCNPC on July 5, 1994, amended on August 30, 2007, August 27, 2009, August 26, 2019 and took effect on January 1, 2020, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing provisions such as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties. Pursuant to the Administrative Measures for Commodity House Leasing promulgated by the Ministry of Housing & Urban-Rural Development in China promulgated on December 2010 and took effect in February 1, 2011, both lessor and lessee are also required to register the lease with the real estate administration department. If the lessor and lessee fail to complete the registration procedures, both lessor and lessee may be subject to fines ranging from RMB1,000 (approximately $140) to RMB10,000 (approximately $1,400). In addition, although the unregistered lease agreements are considered binding agreements, in practice, some of the remedies generally available to the registered lease agreements may not be fully applicable to the unregistered lease agreements, such as specific performance of lease agreement against new purchasers of the property. Some of our leases have not completed the registration.

According to the Civil Code of the PRC, the lessee may sublease the leased and occupies premises to a third party, subject to the consent of the lessor. Where the lessee subleases the premises, the lease contract between the lessee and the lessor remains valid. The lessor is entitled to terminate the lease contract if the lessee subleases the premises without the consent of the lessor. In addition, if the lessor transfers the premises, the lease contract between the lessee and the lessor will still remain valid.

Pursuant to the Civil Code of the PRC, if a mortgagor leases the mortgaged property before the mortgage contract is executed, the previously established leasehold interest will not be affected by the subsequent mortgage. The Supreme People's Court has revised a judicial interpretation regarding disputes over lease contracts on urban buildings, which took effect in January 2021, providing that if the ownership of the leased premises changes during the term of lessee's occupation in accordance with the lease contract, and the lessee requests the assignee of such premises to continue to perform the original lease contract, the PRC court shall support such request unless the mortgage right has been established before the leasing and the ownership changes due to the mortgagee's realization of the mortgage right.

**Regulations relating to Internet Information Security and Privacy Protection**

On December 28, 2012, SCNPC issued Decision of the Standing Committee of the National People's Congress on Strengthening Information Protection on Networks, pursuant to which network service providers and other enterprises and institutions shall, when gathering and using electronic personal information of citizens in business activities, publish their collection and use rules and adhere to the principles of legality, rationality and necessarily, explicitly state the purposes, manners and scopes of collecting and using information, and obtain the consent of those from whom information is collected, and shall not collect and use information in violation of laws and regulations and the agreement between both sides; and the network service providers and other enterprises and institutions and their personnel must strictly keep such information confidential and may not divulge, alter, damage, sell, or illegally provide others with such information.

On July 16, 2013, the Ministry of Industry and Information Technology, or the MIIT, issued the Provisions on the Protection of Personal Information of Telecommunication and Internet User, which was effective as of September 1, 2013. The requirements under this order are stricter and wider compared to the above decision issued by the National People's Congress. According to the provisions, if a network service provider wishes to collect or use personal information, it may do so only if such collection is necessary for the services it provides. Furthermore, it must disclose to its users the purpose, method and scope of any such collection or usage, and must obtain consent from the users whose information is being collected or used. Network service providers are also required to establish and publish their protocols relating to personal information collection or usage, keep any collected information strictly confidential and take technological and other measures to maintain the security of such information. Network service providers are required to cease any collection or usage of the relevant personal information, and provide services for the users to de-register the relevant user account, when a user stops using the relevant Internet service. Network service providers are further prohibited from divulging, distorting or destroying any such personal information, or selling or providing such personal information unlawfully to other parties. In addition, if a network service provider appoints an agent to undertake any marketing or technical services that involve the collection or usage of personal information, the network service provider is required to supervise and manage the protection of the information. The provisions state, in broad terms, that violators may face warnings, fines, public exposure and, criminal liability whereas the case constitutes a crime.

The Cybersecurity Law of the PRC, as adopted by the National People's Congress on November 7, 2016 and amended on October 28, 2025, has come into force on January 1, 2026. Considered as the fundamental law in the area of cybersecurity in China, the Cybersecurity Law regulates network operators and others from the following perspectives: the principle of Cyberspace sovereignty, security obligations of network operators and providers of network products and services, protection of personal information, protection of critical information infrastructure, data use and cross-border transfer, network interoperability and standardization. Network operators shall, according to the requirements of the rules for graded protection of cybersecurity, fulfill security protection obligations to ensure that the network is free from interference, damage or unauthorized access, and prevent network data from being divulged, stolen or falsified. In addition, any network operators collecting personal information shall follow the principles of legitimacy, rationality and necessity and shall not collect or use any personal information without due authorization of the person whose personal information is collected. Each individual is entitled to request a network operator to delete his or her personal information if he or she finds that the collection and use of such information by such operator violate the laws, administrative regulations or the agreement by and between such network operator and such individual; and is entitled to request any network operator to make corrections if he or she finds errors in such information collected and stored by such network operator. Such network operator shall take measures to delete the information or correct the errors. Pursuant to this law, the violators may be subject to: (i) warning; (ii) confiscation of illegal gains and fines equal to one to ten times of the illegal gains; or if without illegal gains, fines up to RMB1,000,000; or (iii) an order to shut down the website, suspend the business operation for rectification, or revocation of the business license. Besides, responsible persons may be subject to fines between RMB10,000 and RMB100,000.

According to the Regulations for Security Protection of Critical Information Infrastructure, or the CIIO Regulation Promulgated by State Council in July 2021, effective on September 1, 2021, critical information infrastructure refers to any important network facilities or information systems of an important industry or field, such as public communication and information services, energy, transport, water conservation, finance, public services, e-government affairs, science, and technology industry for national defense, among other industries and sectors that may pose a serious threat to national security, people's livelihood, and public interests in the event of damage, loss of function, or data leakage. In addition, relevant administrative departments of each critical industry and sector are responsible for formulating eligibility criteria and determining the critical information infrastructure in the respective industry or sector. The operators will be informed about the final determination as to whether they are categorized as critical information infrastructure operators, or CIIOs. We have purchased certain server or network facilities for our mobile and desktop application which we believe are less likely to severely jeopardize national security, people's livelihood and public interests. As of the date of this annual report, we have not received any notice from any authorities identifying us as a CIIO. Due to the unclear scope of what may constitute a CIIO, we cannot assure you that the PRC regulatory agencies would agree with our conclusion. If we are identified as a CIIO, we may be required to, among others: (i) ensure that our data centers to be constructed have the function of supporting the stable and continuous operation of business; (ii) perform security protection obligations to protect critical information infrastructure from being disturbed, damaged or unauthorized accessed, and to prevent network data from leakage, theft or tampering; (iii) have a dedicated cybersecurity management body and person in charge of cybersecurity, conduct background reviews on the person-in-charge and other persons holding key positions, conduct cybersecurity education, technology trainings and skill assessments for relevant staff on a regular basis, implement disaster recovery backup for important systems and databases, adopt remedial measures to promptly address security risks such as system vulnerabilities, and make emergency plans for cybersecurity incidents and conduct regular rehearsals of these plans; and (iv) establish and improve a security inspection and evaluation system. In addition, if our purchase of a network product or service may affect national security, we have to pass a cybersecurity review conducted by the cybersecurity review authority in advance, and enter into a security and confidentiality agreement with the provider.

In August 2021, the Standing Committee of the National People's Congress officially promulgated the Personal Information Protection Law, effective on November 1, 2021, which provides detailed rules on handling personal information and legal responsibilities, including, but not limited to the scope of personal information and the ways of processing personal information, the establishment of rules for processing personal information, and the individual's rights and the processor's obligations in the processing of personal information. The Personal Information Protection Law also strengthens the punishment for those who illegally process personal information.

On August 30, 2024, The State Council promulgated the Administration Measures for Cyber Data Security, or the "Cyber Data Security Measure", which took effect on January 1, 2025. The Cyber Data Security Measure provides that data processors shall in accordance with the provisions of laws and administrative regulations and the mandatory requirements of national standards, and on the basis of classified protection of cybersecurity, strengthen the protection of network data security, establish and perfect the system of network data security management, take technical measures to protect network data, and prevent illegal and criminal activities aiming at and using network data.

On December 28, 2021, the CAC, NDRC, MIIT, the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, the Ministry of Commerce, PBOC, SAMR, the State Administration of Radio and Television, CSRC, the State Secrecy Administration and the State Cryptography Administration jointly promulgated the Cybersecurity Review Measures, or the "Cybersecurity Review Measures," which became effective on February 15, 2022. Pursuant to the Cybersecurity Review Measures, if critical information infrastructure operators purchase network products and services, or network platform operators conduct data processing activities that affect or may affect national security, they will be subject to cybersecurity review. A network platform operator holding more than one million users/users' individual information also shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously used by foreign governments and risk of network data security after going public overseas.

As of the date of this annual report, we have not received any notice from any authorities requiring us to undertake a cybersecurity review by the CAC. Pursuant to the Cybersecurity Review Measures, we believe we are not subject to the cybersecurity review by the CAC, given that: (i) we presently possesses personal information of less than one (1) million individual users in our business operations, as of the date of this annual report; and (ii) each of our PRC Subsidiaries is not a CIIO as neither of them has been notified by the competent PRC government authorities for such purposes; and (iii) data processed in our business is less likely to have a bearing on national security, thus it may not be classified as core or important data by the authorities. However, there remains uncertainty as to how the Cybersecurity Review Measures will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply. We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws should they be deemed applicable to our operations. There is no certainty as to how such review or prescribed actions would impact our operations and we cannot guarantee that any clearance can be obtained or any actions that may be required can be taken in a timely manner, or at all. As there are no detailed rules or official interpretation being introduced yet, the definition of "online platform operators listing in a foreign country with more than one (1) million users' personal information data" remains unclear as of the date of this annual report. It is possible that CAC may require us to file the cybersecurity review. The cybersecurity review procedure usually takes 45-70 business days, and sometimes even longer in special situations, to complete. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Our Industry—Our business generates and processes a large quantity of data, and improper handling of or unauthorized access to such data may adversely affect our business. In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our continued listing on Nasdaq, our financial condition, results of operations, and the subsequent offering*.*"

On December 29, 2011, the MIIT promulgated the Several Provisions on Regulating the Market Order of Internet Information Services, which became effective on March 15, 2012. On December 28, 2012, the SCNPC promulgated the Decision on Strengthening Network Information Protection to enhance the legal protection of information security and privacy on the internet. The Provisions on Protection of Personal Information of Telecommunications and Internet Users promulgated by the MIIT on July 16, 2013 contain detailed requirements on the use and collection of personal information as well as the security measures to be taken by internet service providers. Specifically, (1) the users' personal information shall not be collected without prior consent; (2) the personal information shall not be collected or used other than those necessary for internet service providers to provide services; (3) the personal information shall be kept strictly confidential; and (4) a series of detailed measures shall be taken to prevent any divulge, damage, tamper or loss of personal information of users.

Pursuant to the Notice of the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, issued in April 2013, and the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which was issued on May 8, 2017 and took effect on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen's personal information: (1) providing a citizen's personal information to specified persons or releasing a citizen's personal information online or through other methods in violation of relevant national provisions; (2) providing legitimately collected information relating to a citizen to others without such citizen's consent (unless the information is processed, not traceable to a specific person and not recoverable); (3) collecting a citizen's personal information in violation of applicable rules and regulations when performing a duty or providing services; or (4) collecting a citizen's personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations. In addition, on May 28, 2020, the National People's Congress of the PRC approved the PRC Civil Code, which took effect on January 1, 2021. Pursuant to the PRC Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information shall follow the principles of legitimacy, properness and necessity.

On March 12, 2021, the CAC, MIIT, the Ministry of Public Security and the SAMR, announced the Provisions on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which provide that the operators of mobile internet applications shall not deny the users who do not consent to the collection of unnecessary information from using basic functional services of such applications. Specifically, such provisions further provide that the basic functional service of mail and express delivery refers to "delivery service of items such as mails, packages and printed matters" and the necessary personal information for that category shall include identity information (i.e. name, type and number of ID cards) of the sender, the address and contact phone of the sender, the name and address and contact phone of the recipient as well as the name and nature and amount of the items for delivery. Violations could be reported to the proper authority and will be dealt with in accordance with PRC laws.

On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year and; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC.

Pursuant to the Notice of the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, issued in April 2013, and the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which was issued on May 8, 2017 and took effect on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen's personal information: (1) providing a citizen's personal information to specified persons or releasing a citizen's personal information online or through other methods in violation of relevant national provisions; (2) providing legitimately collected information relating to a citizen to others without such citizen's consent (unless the information is processed, not traceable to a specific person and not recoverable); (3) collecting a citizen's personal information in violation of applicable rules and regulations when performing a duty or providing services; or (4) collecting a citizen's personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations. In addition, on May 28, 2020, the National People's Congress of the PRC approved the PRC Civil Code, which took effect on January 1, 2021. Pursuant to the PRC Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information shall follow the principles of legitimacy, properness and necessity.

We, through the VIE and the VIE's subsidiaries, adopted certain policies to protect the privacy of our clients, such as the policies in our software for our client. Our current software and systems are in compliance with PRC laws and regulations in material respects. Any failure, or perceived failure, by us to comply with any regulatory requirements or privacy protection related laws, rules and regulations could result in proceedings or actions against us by governmental entities or other proper authorities. These proceedings or actions could subject us to significant penalties and negative publicity, require us to change our business practices, increase our costs and severely disrupt our business.

**Regulations relating to Intellectual Property Rights**

***Patent***

Patents in the PRC are principally protected under the Patent Law of the PRC promulgated by the SCNPC in 1984 and then respectively amended in 1992, 2000, 2008, 2020, of which the amendment in 2020 has become effective on June 1, 2021, and its implementation rules. Novelty, inventiveness and practicality are three essential ingredients of patens in the PRC. The latest amendment provides that, in general, the protection period is 20 years for an invention patent, 10 years for a utility model patent and 15 years for a design patent, commencing from their respective application dates.

***Copyright***

The PRC Copyright Law, promulgated in 1990 and amended in 2001, 2010 and 2020, of which the amendment in 2020 has become effective on June 1, 2021, or the Copyright Law, and its related implementing regulations, promulgated in 2002 and amended in 2013, are the principal laws and regulations governing copyright related matters. The Copyright Law provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, enjoy copyright of their works, which includes, among others, works of literature, art, natural science, social science, engineering technology and computer software. Under the Copyright Law, the term of protection for copyrighted software is 50 years. The Regulation on the Protection of the Right to Communicate Works to the Public over Information Networks, which was most recently amended on January 30, 2013, provides specific rules on fair use, statutory license, and a safe harbor for the use of copyrights and copyright management technology, and specifies the liabilities of various entities for violations, including copyright holders, libraries and internet service providers.

In accordance with the Regulations on the Protection of Computer Software promulgated by the State Council on December 20, 2001 and last amended on January 30, 2013, Chinese citizens, legal persons or other entities own the copyright, including the right of publication, right of authorship, right of modification, right of reproduction, distribution right, rental right, right of network communication, translation right and other rights software copyright owners shall have in software developed by them, regardless of whether it has been published.

In accordance with the Measures for the Registration of Computer Software Copyright promulgated by the National Copyright Administration on April 6, 1992 and last amended on February 20, 2002, software copyrights, exclusive licensing contracts for software copyrights and software copyright transfer contracts shall be registered, and the National Copyright Administration shall be the competent authority for the administration of software copyright registration and designates the Copyright Protection Center of China as a software registration authority. The Copyright Protection Center of China shall grant a registration certification to a computer software copyright applicant who complies with regulations. Under the Copyright Law, the term of protection for copyrighted software is 50 years.

***Trademark***

The PRC Trademark Law was adopted in 1982 and then amended in 1993, 2001, 2013 and 2019 respectively. The implementation rules of the PRC Trademark Law were adopted in 1983 and amended in 2014. Registered trademarks are protected under the Trademark Law of the PRC and related rules and regulations. The Trademark Office of National Intellectual Property Administration handles trademark registrations and grants a protection term of ten years to registered trademarks. Where registration is sought for a trademark that is identical or similar to another trademark which has already been registered or given preliminary examination and approval for use in the same or similar category of commodities or services, such application for registration of this trademark may be rejected. Trademark registrations are effective for a renewable ten-year period, unless otherwise revoked.

***Domain name***

The MIIT, promulgated the Administrative Measures on Internet Domain Name, or the Domain Name Measure on August 24, 2017 to protect domain names. According to the Domain Name Measures, domain name applicants are required to duly register their domain names with domain name registration service institutions. The applicants will become the holder of such domain names upon the completion of the registration procedures. The permits for registered domain names are effective for five years, which are subject to renewals, cancellations or revocations.

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***Trade secrets***

According to the PRC Anti-Unfair Competition Law, promulgated by the SCNPC in September 1993, as amended in November 4, 2017, April 23, 2019 and June 27, 2025 respectively, the term "trade secrets" refers to technical, operational or other commercial information that is unknown to the public, has utility, may create business interests or profits for its legal owners or holders, and is maintained as a secret by its legal owners or holders through corresponding confidentiality measures. Under the PRC Anti-Unfair Competition Law, business persons are prohibited from infringing others' trade secrets by: (1) obtaining the trade secrets from the legal owners or holders by any unfair methods such as theft, bribery, fraud, coercion, electronic intrusion, or any other illicit means; (2) disclosing, using or permitting others to use the trade secrets obtained illegally under item (1) above; or (3) disclosing, using or permitting others to use the trade secrets, in violation of any contractual agreements or any requirements of the legal owners or holders to keep such trade secrets in confidence. Pursuant to the PRC Civil Code, if one intentionally infringes upon the intellectual property rights of others and the circumstance is severe, the infringed party is entitled to the corresponding punitive compensation; or (4) abetting a person, or tempting, or aiding a person into or in acquiring, disclosing, using, or allowing another person to use the trade secret of the rightful holder in violation of his or her non-disclosure obligations or the requirements of the rightful holder for keeping the trade secret confidential.

**Regulations relating to Leasing**

Pursuant to the Law on Administration of Urban Real Estate of the PRC promulgated by the SCNPC on July 5, 1994, amended on August 30, 2007, August 27, 2009, August 26, 2019 and took effect on January 1, 2020, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing provisions such as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties. Both lessor and lessee are also required to register the lease with the real estate administration department. If the lessor and lessee fail to complete the registration procedures, both lessor and lessee may be subject to fines ranging from RMB1,000 (approximately USD$155.3) to RMB10,000 (approximately USD$1,553). In addition, although the unregistered lease agreements are considered binding agreements, in practice, some of the remedies generally available under the registered lease agreements may not be fully applicable to the unregistered lease agreements, such as specific performance of lease agreements against new purchasers of the property. Some of our leases have not completed the registration.

According to the Civil Code of the PRC, the lessee may sublease the leased and occupied premises to a third party, subject to the consent of the lessor. Where the lessee subleases the premises, the lease contract between the lessee and the lessor remains valid. The lessor is entitled to terminate the lease contract if the lessee subleases the premises without the consent of the lessor. In addition, if the lessor transfers the premises, the lease contract between the lessee and the lessor will still remain valid.

**Regulations relating to Employment**

***The Labor Law and the Labor Contract Law***

According to the Labor Law of the PRC, or the Labor Law, which was promulgated on July 5, 1994 and last amended and came into effect on December 29, 2018, enterprises and institutions shall establish, provide and improve their system of workplace safety and sanitation, strictly follow state rules and standards on workplace safety and the relevant articles of occupational protection, and educate employees in occupational safety and sanitation in the PRC. Occupational safety and sanitation facilities shall comply with state-fixed standards.

The Labor Contract Law of the PRC, or the Labor Contract Law, which was issued on June 29, 2007, amended on December 28, 2012 and became effective on July 1, 2013, and its implementation rules provide requirements concerning employment contracts between an employer and its employees. If an employer fails to enter into a written employment contract with an employee after the lapse of more than one month, but less than one year from the date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment contract with the employee and pay the employee twice the employee's salary for the period from the date following the lapse of one month from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract. The Labor Contract Law and its implementation rules also require compensation to be paid upon certain terminations. In addition, if an employer intends to enforce a non-compete provision in an employment contract or non-competition agreement with an employee, it has to compensate the employee on a monthly basis during the term of the restriction period after the termination or expiration of the labor contract. Employers in most cases are also required to provide severance payments to their employees after their employment relationships are terminated. The Labor Contract Law also provides that enterprises accepting labor dispatch services shall strictly control the number of dispatched workers and the proportion of dispatched workers shall not exceed the percentage prescribed by competent labor administrative departments. As of the date of this annual report, other than that we have not made adequate social insurance and housing fund contributions for all employees as required by PRC regulations, we believe that we are currently compliant with the foregoing laws and regulation in all material respects.

***The Interim Provisions on Labor Dispatching***

The Interim Provisions on Labor Dispatching, issued by the Ministry of Human Resources and Social Security of the People's Republic of China on January 24, 2014, which came into effect on March 1, 2014, require the number of dispatched workers not to exceed 10% of the total number of 1) the employees that are employed directly by an enterprise and 2) the dispatched workers. As of the date of this annual report, the number of our dispatched workers is lower than 10% of the total number of the employees and the dispatched workers of the Company. Therefore, the Company is currently in compliance with the Interim Provisions on Labor Dispatching. See "Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in the PRC—Increases in labor costs in the PRC may adversely affect our business and our profitability."

***Social Insurance and Housing Funds***

Pursuant to the Interim Regulations on Levying Social Insurance Premiums, promulgated on January 22, 1999 and revised on March 24, 2019, Decisions of the State Council on Modifying the Basic Endowment Insurance System for Enterprise Employees, promulgated on December 3, 2005, Decision on Establishment of Basic Medical System for Urban Employee, issued by State Council and became effective on December 14, 1998, the Regulations on Unemployment Insurance, became effective on January 22, 1999, Regulations on Work-Related Injury Insurance, promulgated on April 27, 2003, amended on December 20, 2010 and became effective on January 1, 2011, and the Interim Measures concerning the Maternity Insurance for Enterprise Employees, promulgated on December 14, 1994 and became effective on January 1, 1995, employers are required to register with the competent social insurance authorities and provide their employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance and medical insurance.

Pursuant to Opinions of the General Office of the State Council on Comprehensively Advancing Combined Implementation of Maternity Insurance and Basic Medical Insurance for Employees, promulgated by the General Office of State Council on March 6, 2019, maternity insurance funds shall merge into the basic medical care insurance funds for employees so as to unify payment and harmonize consolidation level. The new ratio of employers' contribution to basic medical care insurance for employees is determined based on the aggregate of the ratios of employers' contribution to maternity insurance and basic medical care insurance for employees, and an individual is not required to pay for maternity insurance. Therefore, after March 6, 2019, our Company has no record of maternity insurance funds in the payment details of social security, since it has been merged into the basic medical care insurance funds.

Pursuant to the Social Insurance Law of the PRC, or the Social Insurance Law, which became effective on July 1, 2011 with last amendment on December 29, 2018, all employees are required to participate in basic pension insurance, basic medical insurance schemes and unemployment insurance, which must be contributed by both the employers and the employees. All employees are required to participate in work-related injury insurance and maternity insurance schemes, which must be contributed by the employers. Employers are required to complete registrations with local social insurance authorities. Moreover, the employers must timely make all social insurance contributions. Except for mandatory exceptions such as force majeure, social insurance premiums shall not be paid late, reduced or be exempted. Where an employer fails to make social insurance contributions in full and on time, the social insurance contribution collection agencies shall order it to make all or outstanding contributions within a specified period and impose a late payment fee at the rate of 0.05% per day from the date on which the contribution becomes due. If such employer fails to make the overdue contributions within such time limit, the relevant administrative department may impose a fine equivalent to 1—3 times the overdue amount. We are in compliance with laws and regulations related to social insurance and housing funds in China in material aspects.

Pursuant to the Administrative Regulations on the Housing Provident Fund, which became effective on April 3, 1999 and was amended on March 24, 2002 and March 24, 2019, enterprises are required to register with the competent administrative centers of housing provident fund and open bank accounts for housing provident funds for their employees. Employers are also required to timely pay all housing fund contributions for their employees. Where an employer fails to submit and deposit registration of housing provident funds or fails to complete the formalities of opening housing provident fund accounts for its employees, the housing provident fund management center shall order it to complete the formalities within a prescribed time limit. Failing to comply by the expiration of the time limit will subject the employer to a fine ranging from RMB10,000 (approximately $1,400) to RMB50,000 (approximately $7,200). When an employer fails to pay housing provident funds due in full and on time, housing provident fund center is entitled to order it to rectify, and failing to comply could result in enforcement exerted by the court.

**Regulations Relating to Taxes**

***Enterprise income tax***

According to the Enterprise Income Tax Law of the PRC, or the EIT Law, which was promulgated on March 16, 2007, became effective from January 1, 2008 and was amended on February 24, 2017 and December 29, 2018, an enterprise established outside the PRC with de facto management bodies within the PRC is considered a resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. The Implementing Rules of the Enterprise Income Law of the PRC, or the Implementing Rules of the EIT Law defines a "de facto management body" as a managing body that in practice exercises "substantial and overall management and control over the production and operations, personnel, accounting, and properties" of the enterprise. Non-PRC resident enterprises without any branches in the PRC pay an enterprise income tax in connection with their income originating from the PRC at the tax rate of 10%.

Enterprises that are recognized as high and new technology enterprises in accordance with the Administrative Measures for the Determination of High and New Tech Enterprises issued by the Ministry of Science, the MOF, and the State Administration of Taxation, or the SAT, are entitled to enjoy a preferential enterprise income tax rate of 15%. The validity period of the high and new technology enterprise qualification shall be three years from the date of issuance of the certificate. An enterprise can re-apply for such recognition before or after the previous certificate expires.

On February 3, 2015, the SAT issued the Announcement on Several Issues Concerning the Enterprise Income Tax on Indirect Transfer of Assets by Non-Resident Enterprises, or the SAT Circular 7. The SAT Circular 7 repeals certain provisions in the Notice of the State Administration of Taxation on Strengthening the Administration of Enterprise Income Tax on Income from Equity Transfer by Non-Resident Enterprises, or the SAT Circular 698, issued by SAT on December 10, 2009, and the Announcement on Several Issues Relating to the Administration of Income Tax on Non-resident Enterprises, issued by SAT on March 28, 2011, and clarifies certain provisions in the SAT Circular 698. The SAT Circular 7 provides comprehensive guidelines relating to, and heightens the Chinese tax authorities' scrutiny on, indirect transfers of assets by a non-resident enterprise (including assets of organizations and premises in PRC, immovable property in the PRC, equity investments in PRC resident enterprises), or the PRC Taxable Assets. For instance, when a non-resident enterprise transfers equity interests in an overseas holding company that directly or indirectly holds certain PRC Taxable Assets and if the transfer is believed by the PRC tax authorities to have no reasonable commercial purpose other than to evade enterprise income tax, the SAT Circular 7 allows the PRC tax authorities to reclassify the indirect transfer of PRC Taxable Assets into a direct transfer and therefore impose a 10% rate of PRC enterprise income tax on the non-resident enterprise. The SAT Circular 7 lists several factors to be taken into consideration by tax authorities in determining if an indirect transfer has a reasonable commercial purpose. However, regardless of these factors, the overall arrangements in relation to an indirect transfer satisfying all the following criteria will be deemed lack of a reasonable commercial purpose: (i) 75% or more of the equity value of the intermediary enterprise being transferred is derived directly or indirectly from PRC Taxable Assets; (ii) at any time during the one-year period before the indirect transfer, 90% or more of the asset value of the intermediary enterprise (excluding cash) is comprised directly or indirectly of investments in the PRC, or during the one-year period before the indirect transfer, 90% or more of its income is derived directly or indirectly from the PRC; (iii) the functions performed and risks assumed by the intermediary enterprise and any of its subsidiaries and branches that directly or indirectly hold the PRC Taxable Assets are limited and are insufficient to prove their economic substance; and (iv) the foreign tax payable on the gain derived from the indirect transfer of the PRC Taxable Assets is lower than the potential PRC tax on the direct transfer of those assets. However, indirect transfers falling into the scope of the safe harbors under the SAT Circular 7 may not be subject to PRC tax under the SAT Circular 7. The safe harbors include qualified group restructurings, public market trades and exemptions under tax treaties or arrangements.

On October 17, 2017, SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the SAT Circular 37, which took effect on December 1, 2017. Certain provisions of the SAT Circular 37 were repealed by the Announcement of the State Administration of Taxation on Revising Certain Taxation Normative Documents. According to the SAT Circular 37, the balance after deducting the equity net value from the equity transfer income shall be the taxable income amount for equity transfer income. Equity transfer income shall mean the consideration collected by the equity transferor from the equity transfer, including various income in monetary form and non-monetary form. Equity net value shall mean the tax computation basis for obtaining the said equity. The tax computation basis for equity shall be: (i) the capital contribution costs actually paid by the equity transferor to a Chinese resident enterprise at the time of investment and equity participation, or (ii) the equity transfer costs actually paid at the time of acquisition of such equity to the original transferor of the said equity. Where there is reduction or appreciation of value during the equity holding period, and the gains or losses may be confirmed pursuant to the rules of the finance and tax authorities of the State Council, the equity net value shall be adjusted accordingly. When an enterprise computes equity transfer income, it shall not deduct the amount in the shareholders' retained earnings, such as undistributed profits, from the investee enterprise, which may be distributed in accordance with the said equity. In the event of partial transfer of equity under multiple investments or acquisitions, the enterprise shall determine the costs corresponding to the transferred equity in accordance with the transfer ratio, out of all costs of the equity.

Under the SAT Circular 7 and the Law of the PRC on the Administration of Tax Collection promulgated by the SCNPC on September 4, 1992 and newly amended on April 24, 2015, in the case of an indirect transfer, entities or individuals obligated to pay the transfer price to the transferor shall act as withholding agents. If they fail to make withholding or withhold the full amount of tax payable, the transferor of equity shall declare and pay taxes to the relevant tax authorities within seven days from the occurrence of the tax payment obligation. Where the withholding agent does not make the withholding, and the transferor of the equity does not pay the tax payable amount, the tax authority may impose late payment interest on the transferor. In addition, the tax authority may also hold the withholding agents liable and impose a penalty ranging from 50% to 300% of the unpaid tax on them.

***Value-added Tax***

Pursuant to the Value-Added Tax Law of the PRC, which was promulgated by the Standing Committee of the National People's Congress on December 25, 2024, and effective as of January 1, 2026, and the Implementation Rules for the Interim Regulations on Value-Added Tax of the PRC, which was promulgated by the MOF and SAT on December 15, 2008, became effective on January 1, 2009 and amended on October 28, 2011, entities or individuals engaging in sale of goods, provision of processing services, repairs and replacement services or importation of goods within the territory of the PRC shall pay value-added tax, or the VAT. Unless otherwise provided, the rate of VAT is 17% on sales and 6% on the services. On April 4, 2018, MOF and SAT jointly promulgated the Circular of the MOF and the SAT on Adjustment of Value-Added Tax Rates, or the Circular 32, according to which (i) for VAT taxable sales acts or import of goods originally subject to VAT rates of 17% and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively; (ii) for purchase of agricultural products originally subject to tax rate of 11%, such tax rate shall be adjusted to 10%; (iii) for purchase of agricultural products for the purposes of production and sales or consigned processing of goods subject to tax rate of 16%, such tax shall be calculated at the tax rate of 12%; (iv) for exported goods originally subject to tax rate of 17% and export tax refund rate of 17%, the export tax refund rate shall be adjusted to 16%; and (v) for exported goods and cross-border taxable acts originally subject to tax rate of 11% and export tax refund rate of 11%, the export tax refund rate shall be adjusted to 10%. Circular 32 became effective on May 1, 2018 and shall supersede existing provisions which are inconsistent with Circular 32.

Since November 16, 2011, the MOF and the SAT have implemented the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax, or the VAT Pilot Plan, which imposes VAT in lieu of business tax for certain "modern service industries" in certain regions and eventually expanded to nation-wide application in 2013. According to the Implementation Rules for the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax released by the MOF and the SAT on the VAT Pilot Program, the "modern service industries" include research, development and technology services, information technology services, cultural innovation services, logistics support, lease of corporeal properties, attestation and consulting services. The Notice on Comprehensively promoting the Pilot Plan of the Conversion of Business Tax to Value-Added Tax, which was promulgated on March 23, 2016, became effective on May 1, 2016 and was amended on July 11, 2017, sets out that VAT in lieu of business tax be collected in all regions and industries.

On March 20, 2019, MOF, SAT and the General Administration of Customs jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, which became effective on April 1, 2019, and provides that (i) with respect to VAT taxable sales acts or import of goods originally subject to VAT rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) with respect to purchase of agricultural products originally subject to tax rate of 10%, such tax rate shall be adjusted to 9%; (iii) with respect to purchase of agricultural products for the purposes of production or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the tax rate of 10%; (iv) with respect to export of goods and services originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) with respect to export of goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%.

***Dividend withholding tax***

Under the Law of the PRC on Wholly Foreign-Owned Enterprises, which was promulgated by the National People's Congress of the PRC in 1986, revised by the SCNPC on October 31, 2000 and September 3, 2016 and repealed on January 1, 2020, foreign-invested enterprises in the PRC may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned enterprises in the PRC are also required to allocate at least 10% of their respective accumulated profits after tax each year, if any, to certain reserve funds unless these accumulated reserves have reached 50% of the registered capital of such enterprises. These reserves are not distributable as cash dividends.

According to the EIT Law and its implementing rules, dividends paid to investors of an eligible PRC resident enterprise can be exempted from EIT and dividends paid to foreign investors are subject to a withholding tax rate of 10%, unless relevant tax agreements entered into by the PRC government provide otherwise.

The PRC State Administration of Taxation, or the SAT, and the government of Hong Kong entered into the Arrangement between the Mainland of the PRC and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Incomes, or the Arrangement, on August 21, 2006. According to the Arrangement, 5% withholding tax rate shall apply to the dividends paid by a mainland China company to a Hong Kong resident, provided that such Hong Kong resident directly holds at least 25% of the equity interests in the mainland China company, and 10% of withholding tax rate shall apply if the Hong Kong resident holds less than 25% of the equity interests in the mainland China company.

Pursuant to the Circular on Relevant Issues Relating to the Implementation of Dividend Clauses in Tax Treaties, which was promulgated by the SAT and became effective on February 20, 2009, all of the following requirements shall be satisfied when a fiscal resident as the other party of a tax agreement needs to be entitled to be taxed at a tax rate specified in the tax agreement for the dividends paid to it by a PRC resident company: (i) such a fiscal resident who obtains dividends shall be a company as provided in the tax agreement; (ii) owner's equity interests and voting shares of the PRC resident company directly owned by such a fiscal resident reaches a specified percentage; and (iii) the equity interests of the PRC resident company directly owned by such a fiscal resident, at any time during the 12 months prior to obtaining the dividends, reach a percentage specified in the tax agreement.

According to the Tentative Administrative Measures on Tax Convention Treatment for Non-Residents which was promulgated by the SAT on August 24, 2009 and became effective on October 1, 2009, if a non-resident enterprise that receives dividends from a PRC resident enterprise wishes to enjoy the favorable tax benefits under the tax arrangements, it shall submit an application for approval to the competent tax authority. Without being approved, the non-resident enterprise may not enjoy the favorable tax treatment provided in the tax agreements.

The Tentative Administrative Measures on Tax Convention Treatment for Non-Residents was repealed by the Administrative Measures on Tax Convention Treatment for Non-Resident Taxpayers, which was promulgated by the SAT on August 27, 2015 and became effective on November 1, 2015 with last amendment on June 15, 2018, if a non-resident enterprise receives dividends from a PRC resident enterprise, it could directly enjoy the favorable tax benefits under the tax arrangements at tax returns, and be subject to the subsequent regulation of the competent tax authority. The Administrative Measures on Tax Convention Treatment for Non-Resident Taxpayers has subsequently been repealed by the Administrative Measures on Treaty Benefits Treatment for Non-Resident Taxpayers, promulgated by the SAT on October 14, 2019 and became effective on January 1, 2020, which still adopts the same provisions as the Tentative Administrative Measures on Tax Convention Treatment for Non-Residents.

**Regulations relating to Foreign Exchange**

Pursuant to the Foreign Exchange Administration Regulations of the PRC, or the Foreign Exchange Administrative Regulation, as amended in August 2008, Renminbi is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities outside of China, unless the SAFE's prior approval is obtained and prior registration with the SAFE is made. On May 10, 2013, the SAFE promulgated the Circular of the SAFE on Printing and Distributing the Administrative Provisions on Foreign Exchange in Domestic Direct Investment by Foreign Investors and Relevant Supporting Documents, or the SAFE Circular No. 21, which was last amended and became effective on December 30, 2019. It provided for and simplified the operational steps and regulations on foreign exchange matters related to direct investment by foreign investors, including foreign exchange registration, account opening and use, receipt and payment of funds, and settlement and sales of foreign exchange.

Pursuant to the Notice of the SAFE on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment, or the SAFE Circular No. 59, promulgated by the SAFE on November 19, 2012, became effective on December 17, 2012 and was further amended on May 4, 2015, October 10, 2018, and December 30, 2019, approval is not required for opening a foreign exchange account and depositing foreign exchange into the account relating to the direct investments. The SAFE Circular No. 59 also simplified the capital verification and confirmation formalities for foreign invested entities, the foreign capital and foreign exchange registration formalities required for the foreign investors to acquire equities from Chinese parties, and further improved the administration on exchange settlement of foreign exchange capital of foreign invested entities.

***SAFE Circular 37***

In July 2014, SAFE promulgated SAFE Circular 37, which replaces the previous SAFE Circular 75. SAFE Circular 37 requires PRC residents, including PRC individuals and PRC corporate entities, to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we may make in the future.

Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, are required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its registration with the local branch of SAFE with respect to that SPV, to reflect any change of basic information or material events. If any PRC resident shareholder of such SPV fails to make the required registration or to update the registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiaries in China. In February 2015, SAFE promulgated SAFE Notice 13. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should examine the applications and process registrations under the supervision of SAFE. As of the date of this annual report, Mr. Yongxu Liu has completed the initial registrations with the qualified banks as required by the regulations.

***Regulations Relating to Employee Stock Incentive Plan***

On February 15, 2012, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Issues concerning the Foreign Exchange Administration of Domestic Individuals' Participation in Equity Incentive Plans of Overseas Listed Companies, or the "Notice". In accordance with the Notice and relevant rules and regulations, PRC citizens or non-PRC citizens residing in China for a continuous period of not less than one year, who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with the SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain procedures. We and our employees who are PRC citizens or who reside in China for a continuous period of not less than one year and who participate in our stock incentive plan will be subject to such regulation. In addition, the SAT has issued circulars concerning employee share options or restricted shares. Under these circulars, employees working in the PRC who exercise share options, or whose restricted shares vest, will be subject to PRC individual income tax, or the IIT. The PRC subsidiaries of an overseas listed company have obligations to file documents related to employee share options or restricted shares with relevant tax authorities and to withhold IIT of those employees related to their share options or restricted shares. If the employees fail to pay, or the PRC subsidiaries fail to withhold, their IIT according to relevant laws, rules and regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities.

**Regulations relating to Dividend Distributions**

The principal regulations governing distribution of dividends of foreign-invested enterprises include the newly enacted Foreign Investment Law, which came into effect on January 1, 2020, and its implementation rules. Under these laws and regulations, wholly foreign-owned enterprises in China may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned enterprises in China are required to allocate at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends. Furthermore, under the EIT Law, which became effective in January 2008, the maximum tax rate for the withholding tax imposed on dividend payments from PRC foreign invested companies to their overseas investors that are not regarded as "resident" for tax purposes is 20%. The rate was reduced to 10% under the Implementing Regulations for the EIT Law issued by the State Council. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, such as tax rate of 5% in the case of Hong Kong companies that holds at least 25% of the equity interests in the foreign-invested enterprise, and certain requirements specified by PRC tax authorities are satisfied.

**Regulations on Mergers & Acquisitions and Overseas Listings**

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Rules on the Merger and Acquisition of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and were amended on June 22, 2009. The M&A Rules, among other things, require offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. In September 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC. Although (i) The CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours are subject to the M&A Rules; and (ii) no provision in the M&A Rules clearly classifies contractual arrangements as a type of transaction subject to the M&A Rules, the interpretation and application of the regulations remain unclear, future financial activities may ultimately require approval from the CSRC. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval and any failure to obtain or delay in obtaining CSRC approval for future financial activities would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies.

The M&A Rules, and other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. For example, the M&A Rules require a foreign investor to obtain the approval from MOFCOM or its local counterpart upon (i) its acquisition of a domestic enterprise's equity interest; (ii) its subscription of the increased capital of a domestic enterprise; or (iii) establishes and operates a foreign-invested enterprise with assets acquired from a domestic enterprise and such transactions raise "national defense and security" concerns or through such transactions foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns. It is unclear whether our business would be deemed to be in an industry that raises "national defense and security" or "national security" concerns. However, MOFCOM or other government agencies may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in China, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited.

In addition, according to the Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011 and became effective on March 4, 2011, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by MOFCOM on August 25, 2011 and became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by MOFCOM, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the "Opinions." The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Measures, including promoting the construction of relevant regulatory systems, will be taken to control the risks and handle the incidents from China-concept overseas listed companies. On February 17, 2023, the CSRC promulgated the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure to the CSRC; (2) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer's audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for initial public offering and listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted. The New Overseas Listing Rules further require Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as: a) an issuer making an application for initial public offering and listing in an overseas market; b) an issuer making an overseas securities offering after having been listed on an overseas market; and c) a domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offering, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing and a secondary listing or dual major listing of issuers already listed overseas. According to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies from the CSRC, or the CSRC Notice, the domestic companies that have already been listed overseas before the effective date of the Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as the Existing Issuers. Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic company obtained approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for offering and listing in the U.S. has been obtained) for their overseas offering and listing prior to March 31, 2023 but have not yet completed their overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September 30, 2023. Those that complete their overseas offering and listing within such six-month period are deemed as Existing Issuers and are not required to file with the CSRC for their overseas offerings and listings. Within such six-month transition period, however, if such domestic companies fail to complete their overseas issuance and listing, they shall complete the filing procedures with the CSRC. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

On February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions, which were issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised Provisions were issued under the title "Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies", and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, including, but not limited to, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. As of the date of this annual report, the revised Provisions have come into effect and we are not aware of any PRC laws or regulations in effect requiring that we obtain permission from any PRC authorities to issue securities to foreign investors, nor have we received any inquiry, notice, warning, sanction or any regulatory objection from the CSRC, the CAC, or any other Chinese authorities that have jurisdiction over our operations. However, any failure or perceived failure by the Company, its PRC Subsidiary or the VIE to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. The Opinions, the Trial Measures and any related implementing rules to be enacted may subject us to additional compliance requirements in future financial activities. See "Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in the PRC—The M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China*.*"

**C. *Organizational Structure*.**

See "—A. History and Development of the Company."

**D. *Property, Plants and Equipment*.**

See "—B. Business Overview—Properties."

**Item 4A. Unresolved Staff Comments**

Not applicable.

**Item 5. Operating and Financial Review and Prospects**

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our combined financial statements and consolidated financial statements and the related notes included in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this annual report.*

**A. *Operating Results*.**

**Overview**

We are a holding company incorporated in the Cayman Islands and are not a Chinese operating company. As a holding company with no material operations of our own, our operations have been conducted in China by our subsidiaries and through the VIE Agreements, with the VIE and the VIE's subsidiaries. For accounting purposes, we control and receive the economic benefits of the VIE and the VIE's subsidiaries' business operations through such VIE Agreements, which enables us to consolidate the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statement under U.S. GAAP. Neither we nor our subsidiaries own any equity interests in the VIE or the VIE's subsidiaries. We have evaluated the guidance in FASB ASC 810 and determined that we are regarded as the primary beneficiary of the VIE, for accounting purposes, as a result of our direct ownership in Tianyu and the provisions of the VIE Agreements. Accordingly, we treat the VIE and the VIE's subsidiaries as our consolidated entities under U.S. GAAP. We have consolidated the financial results of the VIE and the VIE's subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.

Our Class A Ordinary Shares are shares of our offshore holding company in the Cayman Islands instead of shares of the VIE or the VIE's subsidiaries in China, therefore, as an investor, you will not directly hold equity interests in the VIE or the VIE's subsidiaries, and you may never directly hold equity interests in the VIE or the VIE's subsidiaries through your investment in our Class A Ordinary Shares. For a description of the VIE Agreements, see "Item 3. Key Information*—*Our VIE Agreements."

The VIE is a contract logistics service provider in China. Contract logistics is a comprehensive process that merges traditional logistics with supply chain management. Contract logistics companies outsource resource management tasks to third-party companies and handle activities such as planning and designing supply chains, designing facilities, processing orders, collecting payments, managing inventories, and providing client services.

Our integrated logistics solution services are comprised of three business streams: (1) B2B freight transportation; (2) cloud storage; and (3) value-added services. Since 2001, we, through the VIE and the VIE's subsidiaries, have developed extensive and reliable transportation networks in China, covering 382 cities in over 32 provinces as of December 31, 2025.

We, through the VIE and the VIE's subsidiaries, operate on a scalable integrated network model, which we believe is best suited to support our business and maintain the quality of our comprehensive logistics services. As a contract logistics company, we, through the VIE and the VIE's subsidiaries, directly own and operate all of our regional sorting centers, Cloud OFCs, and service outlets. We, through the VIE and the VIE's subsidiaries, also directly own and operate our fleets. In order to establish a broader network and provide more efficient services, we, through the VIE and the VIE's subsidiaries, cooperate with third-party transportation providers in providing freight transportation services. We believe this network model allows us to achieve strong operating results while maintaining and minimizing fixed costs and capital requirements, which results in higher return on earnings and equities.

Operational efficiency, cost management, and competitive pricing are critical to the success of a contract logistics company. We, through the VIE and the VIE's subsidiaries, have achieved strong operational efficiency through centralized control and management of 26 regional sorting centers, 57 Cloud OFCs, 14 service outlets, approximately 420 self-owned trucks and vehicles, and over 122,000 transportation providers, route planning and optimization, and transportation and managements system.

For the fiscal years ended December 31, 2025 and 2024, our net revenue, mainly generated from providing transportation and warehouse storage management services, was approximately $572.5 million and $504.2 million, respectively. Our total net revenue increased by approximately 13.6% during 2025 compared to 2024, primarily driven by the higher net revenue from transportation services. We recorded net income of approximately $12.2 million and $10.8 million for the years ended December 31, 2025 and 2024, respectively.

For the fiscal years ended December 31, 2024 and 2023, our net revenue, mainly generated from providing transportation and warehouse storage management services, was approximately $504.2 million and $404.1 million, respectively. Our total net revenue increased by approximately 24.8% during 2024 compared to 2023, primarily driven by the higher net revenue from transportation services. We recorded net income of approximately $10.8 million and $10.3 million for the years ended December 31, 2024 and 2023, respectively.

 **General Factors Affecting Our Results of Operations**

Our business and operating results are affected by a number of general factors in China's transportation industry, including, but not limited to:

● China's overall economic growth, level of urbanization and level of consumption;

● the development of the manufacturing industry, fast moving consumer goods industry, telecommunication industry, and publishing industry; and

● market competition.

Unfavorable changes in any of these general factors could materially and adversely affect our business and our results of operations.

**Key Factors Affecting Our Results of Operations**

 ****

***Our ability to expand our customer base***

We will continue to seek to expand our customer base to achieve sustainable growth. We aim to attract new customers and maintain our existing customers. We acquire customers for our transportation services through the referral of our existing customers and our own efforts including online and off-line advertising. We plan to strengthen our partnerships by improving the quality and variety of our services. Additionally, we plan to put on more efforts to acquire more warehouse storage management service customers through our existing transportation service customers.

 ****

***Strategic Acquisitions and Investments***

We may selectively pursue acquisitions, investments, joint ventures and partnerships that we believe are strategic and complementary to our operations and technology. The business or financial performance of the companies we have invested in as well as our ability to successfully integrate these investments with our existing business would impact our results of operations and financial conditions.

**Results of Operations**

The following consolidated results of operations include the results of operations of the Company, its wholly owned subsidiaries and consolidated VIE and the VIE's subsidiaries.

The following table summarizes our consolidated results of operations, both in absolute amounts and as percentages of our total net revenue for the periods presented. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.

***For the years ended December 31, 2025 and 2024***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2025** | **2025** | **2024** | **2024** | **Change** | **Change** |
|  | **Amount<br> in thousand** | **%** | **Amount<br> in thousand** | **%** | **(Amount<br> in thousand)** | **%** |
| **Revenue** |  |  |  |  |  |  |
| Transportation | $554761 | 96.9% | $484754 | 96.1% | $70007 | 14.4% |
| Warehouse storage management services | 14258 | 2.5% | 16432 | 3.3% | (2174) | (13.2)% |
| Other revenue | 3459 | 0.6% | 2972 | 0.6% | 487 | 16.4% |
| **Net revenue** | **572478** | **100%** | **504158** | **100%** | 68320 | 13.6% |
| Cost of revenue | (519390) | (90.7)% | (457874) | (90.8)% | (61516) | 13.4% |
| **Gross profit** | $**53088** | **9.3%** | $**46284** | **9.2%** | $6804 | 14.7% |

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**Net revenues**

*Transportation services*

We, primarily through the VIE and the VIE's subsidiaries, provide transportation services to companies in mainland China. Our major customers are in the manufacturing industry, the fast-moving consumer goods industry, the new energy (vehicle) industry, the telecommunication industry, and the publishing industry. Revenue from transportation services is recognized upon customers' receipt of the transported goods.

*Warehouse storage management services*

We, primarily through the VIE and the VIE's subsidiaries, generate revenue of warehouse storage management services through the provision of integrated warehouse storage management services to various customers. We help companies place the goods and maintain the daily input and output of the goods. We primarily charge our customers service fees for our storage services and the daily management services. Revenue from the warehouse storage management services is recognized over the service period.

Our net revenues increased by approximately 13.6% from approximately $504.2 million for the year ended December 31, 2024 to approximately $572.5 million for the year ended December 31, 2025. The increase was primarily driven by a significant increase in revenue from our transportation services.

Net revenues generated from our transportation services increased by approximately 14.4% from approximately $484.8 million for the year ended December 31, 2024 to approximately $554.8 million for the year ended December 31, 2025. The growth was primarily driven by the expansion of services with existing clients, reflecting a deepened partnership and expanded service offerings.

Net revenue generated from our warehouse storage management services decreased by approximately 13.2% from approximately $16.4 million for the year ended December 31, 2024 to approximately $14.3 million for the year ended December 31, 2025, primarily due to a shifting of focus on transportation services for the year ended December 31, 2025.

 ****

***Cost of revenues***

Our cost of revenue consists of cost of transportation services and cost of warehouse storage management services. The cost of transportation services comprises cooperation cost (the payments made to third-party transportation providers), depreciation and amortization expenses, toll fees, employee wages and benefits and fuel cost. Cooperation cost is the direct cost of transportation paid by the Company to third-party transportation providers, who are independent contractors and third-party carriers. The cost of warehouse storage management services consists of rental fees, handling fees, employee wages and benefits in connection with our services to our clients.

Our cost of revenues increased by approximately 13.4%, from approximately $457.9 million for the year ended December 31, 2024 to approximately $519.4 million for the year ended December 31, 2025, which was in line with the increase in revenue.

***Gross profit***

Our overall gross profit increased by approximately 14.7% from approximately $46.3 million for the year ended December 31, 2024 to approximately $53.1 million for the year ended December 31, 2025. For the years ended December 31, 2025 and 2024, our overall gross margin was stable and amounted to approximately 9.3% and 9.2%, respectively.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **%** |
| **Operating expenses** |  |  |  |  |
| **Selling and marketing** | $(5999) | $(5964) | $(35) | 0.6% |
| **General and administrative** | (30209) | (25654) | (4555) | 17.8% |
| **Total operating expenses** | $(36208) | $(31618) | $(4590) | 14.5% |

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***Operating expenses***

Our operating expenses increased by approximately 14.5% from approximately $31.6 million for the year ended December 31, 2024 to approximately $36.2 million for the year ended December 31, 2025 for the following reasons:

*Selling and marketing expenses*

Our selling and marketing expenses consist primarily of employee wages, rental expenses, benefits for sales and marketing staff, depreciation expenses and other daily expenses which are related to the sales and marketing functions.

Our selling and marketing expenses kept at approximately $6.0 million for the years ended December 31, 2025 and 2024.

*General and administrative expenses*

Our general and administrative expenses consist primarily of employee wages and benefits for corporate employees, rental expenses, depreciation and amortization expense and other expenses which are related to the general corporate functions.

Our general and administrative expenses increased by approximately 17.8% from approximately $25.7 million for the year ended December 31, 2024 to approximately $30.2 million for the year ended December 31, 2025, which was attributable to increased employee salaries and related benefits. ****

 ****

***Income from operations***

As a result of the foregoing, our profit from operations increased by approximately 15.1% from approximately $14.7 million for the year ended December 31, 2024 to approximately $16.9 million for the year ended December 31, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **%** |
| **Other income (expense)** |  |  |  |  |
| Interest income | $255 | $159 | $96 | 60.4% |
| Interest expense | (2736) | (1972) | (764) | 38.7% |
| Other expense, net | (143) | (360) | 217 | (60.3)% |
| Total other expense, net | $(2624) | $(2173) | $(451) | 20.8% |

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Our total net other expense increased by approximately 20.8% from approximately $2.2 million for the year ended December 31, 2024 to approximately $2.6 million for the year ended December 31, 2025 for the following reasons.

*Interest income*

Our interest income increased by approximately 60.4% from approximately $0.2 million for the year ended December 31, 2024 to approximately $0.3 million for the year ended December 31, 2025, as a result of an increased interest income from loan to Xingqidian Supply Chain Management Co., Ltd, a third party.

 

*Interest expense*

Our interest expense increased by approximately 38.7% from approximately $2.0 million for the year ended December 31, 2024 to approximately $2.7 million for the year ended December 31, 2025, due to increased average bank loan balance during the year ended December 31, 2025.

*Other expense, net*

Our other expense, net mainly consists of government subsidies, penalties and others. Other expense, net was approximately $0.1 million for the year ended December 31, 2025, as compared to approximately $0.4 million for the year ended December 31, 2024. The decrease was due to lower loss on disposal of property and equipment as well as increased one-time compensation income.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **%** |
| Income before income taxes | $14256 | $12493 | $1763 | 14.1% |
| Provision for income taxes | (2047) | (1666) | (381) | 22.9% |
| Net income | $12209 | $10827 | $1382 | 12.8% |

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***Income before income taxes***

As a result of the foregoing, our income before income taxes increased by 14.1% from approximately $12.5 million for the year ended December 31, 2024 to approximately $14.3 million for the year ended December 31, 2025.

***Provision for income taxes***

 ****

The effective income tax rate increased from approximately 13.3% for the year ended December 31, 2024 to approximately 14.4% for the year ended December 31, 2025.

***Net income***

As a result of the foregoing, our net income increased by 12.8% from approximately $10.8 million for the year ended December 31, 2024 to approximately $12.2 million for the year ended December 31, 2025.

***For the years ended December 31, 2024 and 2023***

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2024** | **2024** | **2023** | **2023** | **Change** | **Change** |
|  | **Amount<br> in thousand** | **%** | **Amount<br> in thousand** | **%** | **(Amount<br> in thousand)** | **%** |
| **Revenue** |  |  |  |  |  |  |
| Transportation | $484754 | 96.1% | $383211 | 94.8% | $101543 | 26.5% |
| Warehouse storage management services | 16432 | 3.3% | 18160 | 4.5% | (1728) | (9.5)% |
| Other revenue | 2972 | 0.6% | 2750 | 0.7% | 222 | 8.1% |
| **Net revenue** | **504158** | **100%** | **404121** | **100%** | 100037 | 24.8% |
| Cost of revenue | (457874) | (90.8)% | (357615) | (88.5)% | (100259) | 28.0% |
| **Gross profit** | $**46284** | **9.2%** | $**46506** | **11.5%** | $(222) | (0.5)% |

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 ****

***Net revenues***

*Transportation services*

We, primarily through the VIE and the VIE's subsidiaries, provide transportation services to companies in mainland China. Our major customers are in the manufacturing industry, the fast-moving consumer goods industry, the new energy (vehicle) industry, the telecommunication industry, and the publishing industry. Revenue from transportation services is recognized upon customers' receipt of the transported goods.

*Warehouse storage management services*

We, primarily through the VIE and the VIE's subsidiaries, generate revenue of warehouse storage management services through the provision of integrated warehouse storage management services to various customers. We help companies place the goods and maintain the daily input and output of the goods. We primarily charge our customers service fees for our storage services and the daily management services. Revenue from the warehouse storage management services is recognized over the service period.

Our net revenues increased by approximately 24.8% from approximately $404.1 million for the year ended December 31, 2023 to approximately $504.2 million for the year ended December 31, 2024. The increase was primarily driven by a significant increase in revenue from our transportation services.

Net revenues generated from our transportation services increased by approximately 26.5% from approximately $383.2 million for the year ended December 31, 2023 to approximately $484.8 million for the year ended December 31, 2024. The growth was primarily driven by the expansion of services with new clients, particularly in the new energy (vehicle) sector. The Company saw significant growth, due to increased demand within this sector, reflecting a deepened partnership and expanded service offerings.

Net revenue generated from our warehouse storage management services decreased by approximately 9.5% from approximately $18.2 million for the year ended December 31, 2023 to approximately $16.4 million for the year ended December 31, 2024, primarily due to a shifting of focus on transportation services for the year ended December 31, 2024.

***Cost of revenues***

Our cost of revenue consists of cost of transportation services and cost of warehouse storage management services. The cost of transportation services comprises cooperation cost (the payments made to third-party transportation providers), depreciation and amortization expenses, toll fees, employee wages and benefits and fuel cost. Cooperation cost is the direct cost of transportation paid by the Company to third-party transportation providers, who are independent contractors and third-party carriers. The cost of warehouse storage management services consists of rental fees, handling fees, employee wages and benefits in connection with our services to our clients.

Our cost of revenues increased by approximately 28.0%, from approximately $357.6 million for the year ended December 31, 2023 to approximately $457.9 million for the year ended December 31, 2024, which was in line with the increase in revenue with a higher percentage of increase (see explanations in gross profit).

***Gross profit***

Our overall gross profit decreased by approximately 0.5% from approximately $46.5 million for the year ended December 31, 2023 to approximately $46.3 million for the year ended December 31, 2024. For the years ended December 31, 2024 and 2023, our overall gross margin was approximately 9.2% and 11.5%, respectively. The gross margin decreased mainly due to decreased average selling prices, driven by market competition, for the year ended December 31, 2024. Accordingly, our total revenues had a lower proportional increase than the increase in cost of revenues during the same period, leading to a lower overall gross profit margin.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2024** | **2023** | **Change** | **Change** |
|  | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **%** |
| **Operating expenses** |  |  |  |  |
| **Selling and marketing** | $(5964) | $(6688) | $724 | (10.8)% |
| **General and administrative** | (25654) | (25912) | 258 | (1.0)% |
| **Total operating expenses** | $(31618) | $(32600) | $982 | (3.0)% |

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***Operating expenses***

Our operating expenses decreased by approximately 3.0% from approximately $32.6 million for the year ended December 31, 2023 to approximately $31.6 million for the year ended December 31, 2024 for the following reasons:

*Selling and marketing expenses*

Our selling and marketing expenses consist primarily of employee wages, rental expenses, benefits for sales and marketing staff, depreciation expenses and other daily expenses which are related to the sales and marketing functions.

Our selling and marketing expenses decreased by approximately 10.8% from approximately $6.7 million for the year ended December 31, 2023 to approximately $6.0 million for the year ended December 31, 2024, which was attributable to decreased related employee wages and benefits due to workforce optimization practices, which led to a reduction in the number of employees for related sales and marketing activities.

*General and administrative expenses*

Our general and administrative expenses consist primarily of employee wages and benefits for corporate employees, rental expenses, depreciation and amortization expense and other expenses which are related to the general corporate functions.

Our general and administrative expenses decreased by approximately 1.0% from approximately $25.9 million for the year ended December 31, 2023 to approximately $25.7 million for the year ended December 31, 2024, which was due to decrease of employee cost (specially for bonus) and decreased provision for credit losses, partially offset by increased professional consulting service fee.

***Income from operations***

As a result of the foregoing, our profit from operations increased by approximately 5.5% from approximately $13.9 million for the year ended December 31, 2023 to approximately $14.7 million for the year ended December 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2024** | **2023** | **Change** | **Change** |
|  | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **%** |
| **Other income (expense)** |  |  |  |  |
| Interest income | $159 | $126 | $33 | 26.2% |
| Interest expense | (1972) | (1775) | (197) | 11.1% |
| Other (expense) income, net | (360) | 371 | (731) | (197.0)% |
| Total other expense, net | $(2173) | $(1278) | $(895) | 70.0% |

---

Our total net other expense increased by approximately 70.0% from approximately $1.3 million for the year ended December 31, 2023 to approximately $2.2 million for the year ended December 31, 2024 for the following reasons.

*Other (expense) income, net*

Our other (expense) income mainly consists of government subsidies, penalties and others. Other expense, net was approximately $0.4 million for the year ended December 31, 2024, as compared to other income, net of approximately $0.4 million for the year ended December 31, 2023. The change was due to loss on disposal of property and equipment as well as decreased one-time compensation income.

*Interest expense*

Our interest expense increased by approximately 11.1% from approximately $1.8 million for the year ended December 31, 2023 to approximately $2.0 million for the year ended December 31, 2024, due to increased borrowings during the year ended December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2024** | **2023** | **Change** | **Change** |
|  | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **%** |
| Income before income taxes | $12493 | $12628 | $(135) | (1.1)% |
| Provision for income taxes | (1666) | (2320) | 654 | (28.2)% |
| Net income | $10827 | $10308 | $519 | 5.0% |

---

***Income before income taxes***

As a result of the foregoing, our income before income taxes decreased by 1.1% from approximately $12.6 million for the year ended December 31, 2023 to approximately $12.5 million for the year ended December 31, 2024.

***Provision for income taxes***

The effective income tax rate decreased from approximately 18.4% for the year ended December 31, 2023 to approximately 13.3% for the year ended December 31, 2024, due to higher tax savings achieved through the subsidiaries and VIE's subsidiaries with preferential tax treatment for the year ended December 31, 2024.

***Net income***

As a result of the foregoing, our net income increased by 5.0% from approximately $10.3 million for the year ended December 31, 2023 to approximately $10.8 million for the year ended December 31, 2024.

***Impact of Foreign Currency Fluctuations***

The reporting currency of the Company is USD. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People's Bank of China at the end of the period. The statement of income accounts is translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The foreign currency translation from RMB to USD could materially affect our financial condition and results of operations due to the fluctuation of exchange rate. The exchange rates in effect are shown below:

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| | | | |
|:---|:---|:---|:---|
| **U.S. Dollar Exchange Rate** | **December 31,<br> 2025** | **December 31,<br> 2024** | **December 31,<br> 2023** |
| At the end of the period - USD: RMB | US$1=RMB7.0288 | US$1=RMB7.1884 | US$1=RMB7.0827 |
| Average rate for the period - USD: RMB | US$1=RMB7.1429 | US$1=RMB7.1217 | US$1=RMB7.0467 |

---

We did not have any foreign currency investments hedged by currency borrowings or other hedging instruments in years ended December 31, 2025, 2024 and 2023.

**B. *Liquidity and Capital Resources*.**

The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China. Under existing PRC foreign exchange regulations, our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE. Approval from or registration with appropriate government authorities is, however, required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. See "Risk Factors—Governmental control of currency conversion may affect the value of your investment and our payment of dividends."

Current PRC regulations permit our PRC subsidiary to pay dividends to us only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiary is required to set aside at least 10% of its respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. We had various outstanding bank loans of approximately $81.3 million as of December 31, 2025. We have also entered into non-cancellable operating lease agreements for several offices, operating facilities and warehouses. The following table sets forth our contractual obligations as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments Due by Period (Amount in thousand)** | **Payments Due by Period (Amount in thousand)** | **Payments Due by Period (Amount in thousand)** | **Payments Due by Period (Amount in thousand)** | **Payments Due by Period (Amount in thousand)** |
|  | **Total** | **Within<br> 1 Year** | **1-3 Years** | **3-5 Years** | **More than<br> 5 Years** |
| Bank loans | $81253 | $47421 | $20912 | $4678 | $8242 |
| Operating lease commitments | 5233 | 2746 | 1838 | 399 | 250 |
| Total | $86486 | $50167 | $22750 | $5077 | $8492 |

---

***Cash flows and working capital***

The following table sets forth a summary of our cash flows for the periods indicated:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
|  | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** | **(Amount<br> in thousand)** |
| **Net cash provided by operating activities** | $16099 | $15010 | $14135 |
| **Net cash used in investing activities** | (37428) | (32629) | (18821) |
| **Net cash flows provided by financing activities** | 18817 | 29072 | 11169 |
| **Effects of exchange rate changes on cash, cash equivalent and restricted cash** | 867 | (533) | (558) |
| **Cash, cash equivalent and restricted cash, beginning of year** | 40213 | 29293 | 23368 |
| **Cash, cash equivalent and restricted cash, end of year** | $38568 | $40213 | $29293 |

---

As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our PRC subsidiary and the VIE in China. We are permitted under PRC laws and regulations to provide funding to our PRC subsidiary in China through capital contributions or loans, subject to the approval of government authorities and limits on the amount of capital contributions and loans. In addition, our subsidiaries in China may provide Renminbi funding to the VIE only through loans. Foreign currency capital of a foreign-invested enterprise may be converted into Renminbi capital at its will according to the actual operation of the enterprise, as long as it is within such enterprise's business scope.

***Cash flows in Operating Activities***

For the year ended December 31, 2025, net cash provided by operating activities was approximately $16.1 million, primarily comprised of net income of approximately $12.2 million and adjusted for non-cash items such as depreciation and amortization for property and equipment of approximately $6.4 million, approximately $4.6 million for amortization of operating lease expense, decrease of prepayments and other current assets approximately $3.3 million, increase of salary and welfare payable approximately $2.4 million, increase of accrued expenses and other current liabilities of approximately $2.0 million, increase of tax payables approximately $1.0 million and decrease of other non-current assets approximately $0.9 million. Net cash generated from operating activities was partially offset by approximately $5.8 million increase in account receivable, approximately $4.5 million decrease in operating lease liabilities, approximately $4.4 million increase in due from related parties, approximately $1.6 million decrease in other non-current liabilities and approximately $1.1 million decrease in accounts payable.

For the year ended December 31, 2024, net cash provided by operating activities was approximately $15.0 million, primarily comprised of net income of approximately $10.8 million and adjusted for non-cash items such as depreciation and amortization for property and equipment of approximately $6.4 million, approximately $6.6 million for amortization of operating lease right-of-use assets and interest of operating lease liabilities, decrease of prepayments and other current assets approximately $4.8 million, increase of accounts payable approximately $29.3 million, decrease of other non-current assets of approximately $2.9 million. Net cash generated from operating activities was partially offset by approximately $31.2 million increase in account receivable, approximately $8.2 million decrease in accrued expenses and other current liabilities, approximately $6.8 million decrease in operating lease liabilities, and approximately $1.5 million decrease in salary and welfare payable.

For the year ended December 31, 2023, net cash provided by operating activities was approximately $14.1 million, primarily comprised of net income of approximately $10.3 million and adjusted for non-cash items such as depreciation and amortization expense for property and equipment of approximately $6.4 million, approximately $9.3 million for amortization of operating lease right-of-use assets and interest of operating lease liabilities, deferred income taxes expenses of approximately $1.5 million, decrease of prepayments and other current assets approximately $3.5 million, increase of accounts payable approximately $4.5 million and increase of salary and welfare payable of approximately $1.5 million. Net cash generated from operating activities was partially offset by approximately $9.4 million decrease in operating lease liabilities, approximately $10.7 million increase in account receivable and approximately $3.7 million increase in other non-current assets.

***Cash flows in Investing Activities***

For the year ended December 31, 2025, net cash used in investing activities was approximately $37.4 million, consisting primarily of approximately $19.0 million cash used to acquire property and equipment, approximately $11.4 million loan to third parties, approximately $2.8 million loan to related parties, and approximately $6.2 million cash paid for long-term investments, partially offset by investment deposit refund of approximately $1.6 million.

For the year ended December 31, 2024, net cash used in investing activities was approximately $32.6 million, consisting primarily of approximately $29.5 million cash used to acquire property and equipment, approximately $9.1 million cash used for purchasing intangible assets, approximately $9.1 million cash paid for investments deposit and approximately $5.8 million loan to a third party, partially offset by cash proceeds received from disposal of subsidiaries of approximately $9.7 million and investment deposit refund of approximately $6.8 million, loan repayment from a third party of approximately $2.8 million and cash received from disposal property and equipment of approximately $1.3 million.

For the year ended December 31, 2023, net cash used in investing activities was approximately $18.8 million, consisting primarily of approximately $10.8 million cash used to acquire property and equipment and approximately $17.9 million cash used for purchasing intangible assets, offset by cash proceeds received from disposal of property and equipment of approximately $1.2 million, investment deposit refund of approximately $5.7 million and consideration deposit received from a third party of approximately $2.8 million.

***Cash flows in Financing Activities***

For the year ended December 31, 2025, net cash provided by financing activities was approximately $18.8 million, consisting primarily of cash proceeds from bank loans of approximately $74.0 million, proceeds from notes payable of approximately $9.1 million, partially offset by repayment of bank loans of approximately $50.2 million and repayment of notes payable of approximately $15.0 million.

For the year ended December 31, 2024, net cash provided by financing activities was approximately $29.1 million, consisting primarily of cash proceeds from bank loans of approximately $66.8 million, proceeds from notes payable of approximately $34.0 million and cash contribution from non-controlling shareholders of approximately $2.1 million, partially offset by repayment of bank loans of approximately $46.5 million and repayment of notes payable of approximately $27.4 million.

For the year ended December 31, 2023, net cash provided by financing activities was approximately $11.2 million, consisting primarily of cash proceeds from bank loans of approximately $37.9 million, proceeds from the initial public offering of approximately $8.5 million, proceeds from notes payable of approximately $8.5 million and advance from a third party of approximately $7.2 million, partially offset by repayment of bank loans of approximately $48.7 million and repayment of notes payable of approximately $2.0 million.

**Capital Expenditures**

Our capital expenditures are incurred primarily in connection with purchase of fixed assets, including electronic equipment, office equipment and vehicles, and intangible assets. Our capital expenditures were approximately $19.0 million, $38.6 million and $28.7 million for the fiscal years ended December 31, 2025, 2024 and 2023, respectively. Subsequent to December 31, 2025 and as of the date of this annual report, we made capital expenditures of approximately $1.2 million. We intend to fund our future capital expenditures with our existing cash balance, proceeds of bank loans and proceeds from the new equity financing.

**Off-Balance Sheet Commitments and Arrangements**

As of December 31, 2025, the Company had letters of guarantee in aggregate of approximately $7.8 million (RMB54.8 million) issued by several banks to the customers, which terms extend through 2028. The Company was required to maintain restricted cash of approximately $2.1 million (RMB15.0 million) for letters of guarantee.

As of December 31, 2025, we have not recorded any liabilities related to these letters of guarantee, as there are no indications of default. However, these commitments represent potential obligations that could result in liabilities if we fail to fulfill agreement terms.

We have not entered into any derivative contracts indexed to our shares that are classified as shareholder's equity or that are not reflected in our consolidated financial statements. Additionally, we do not have any retained or contingent interests in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. We do not have any variable interests in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us.

**C. *Research and Development, Patents and Licenses, etc.***

See "Item 4. Information on the Company—B. Business Overview—Our Technology" and "Item 4. Information on the Company—B. Business Overview—Intellectual Property."

**D. *Trend Information*.**

Other than as described elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information not necessarily to be indicative of future operating results or financial condition.

**E. *Critical Accounting Estimates*.**

We prepare our consolidated financial statements in conformity with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations because of changes in our estimates.

The critical accounting policies, judgments and estimates that we believe to have the most significant impact on our consolidated financial statements are described below, which should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this annual report. When reviewing our consolidated financial statements, you should consider.

● our selection of critical accounting policies;

● the judgments and other uncertainties affecting the application of such policies;

● the sensitivity of reported results to changes in conditions and assumptions;

Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) accounts receivable, net; and (iii) income taxes. See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies.

Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. For the year ended December 31, 2025, we identified no critical accounting estimates in the preparation of our consolidated financial statements.

**Item 6. Directors, Senior Management and Employees**

**A. *Directors and Senior Management*.**

The following table sets forth information regarding our directors and executive officers as of the date of this annual report. The business address of all of our directors and executive officers is Shengfeng Building, No. 478 Fuxin East Road, Jin'an District, Fuzhou City, Fujian Province, People's Republic of China, 350001.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position(s)** |
| Yongxu Liu | 55 | Chief Executive Officer, Director, President and Chairman |
| Guoping Zheng | 40 | Chief Financial Officer, Director and Vice President |
| Jin Wang | 60 | Independent Director |
| Wen Li | 59 | Independent Director |
| Qingyan Ye | 41 | Independent Director |

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The following is a brief biography of each of the executive officers and directors listed above:

**Yongxu Liu** has been our chief executive officer, president and chairman since May 20, 2021 and director since July 16, 2020. Mr. Liu is the founder of Shengfeng Logistics and has served as its chairman and chief executive officer since December 2001. Mr. Liu served as the vice chairman of Fujian Province Logistics Association in 2006 and the vice chairman of Fuzhou City Logistics Association in 2007. Mr. Liu also served as the deputy to Fuzhou Municipal People's Congress in 2011. Prior to founding Shengfeng Logistics, Mr. Liu was the manager of Department of Vehicle Management of Shenghui Logistics Group Co., Ltd. from 1997 to 2001. Before the formal formation of Shenghui Logistics Group Co., Ltd., Mr. Liu worked for such entity from 1992 to 1997 as a self-employed individual of logistics transportation. Mr. Liu received his master's degree in Executive Master of Business Administration from Tsinghua University in 2016.

**Guoping Zheng** has been our chief financial officer and vice president since May 20, 2021 and director since June 1, 2025. Mr. Zheng has served as the vice president and chief financial officer of Shengfeng Logistics, principal of its Strategy Department and its Finance Department since 2016. Prior to that, Mr. Zheng served as the senior director of the Financial Management Department of East China and North China in Deppon Logistics Co., Ltd. from 2008 to 2016. Mr. Zheng received his bachelor's degree in Financial Management from Xiamen University in 2008.

**Jin Wang** is an independent director. Jin Wang is a co-founder and Vice Chairman of the New Energy International Investment Alliance since 2018, and in that capacity, he has driven cross-sector collaborations in renewable energy. Since 2015, he has served as President of the Guohe Energy Research Institute, focusing on energy policy and sustainable development. Between 2010 and 2022, he served as director of the NDRC's International Energy Research Institute, which solidified his expertise in global energy governance. Dr. Wang received his received his Bachelor's degree in Mathematics from Yangzhou University in 1986; his Master's Degree in National Economic Planning and Management from Renmin University of China in 1989, and his Ph.D. in Economics from Emory University, Georgia, USA 1996.

**Wen Li** is an independent director. Ms. Li has served as a financial director of Fujian Qunsheng Property Limited Company in China since 2013 and an independent director of Shenzhen Coship Electronics Co., Ltd. since March 2021. From 2006 to 2012, she served as an independent director of Fufa Group Co., Ltd. in Fujian Province. She also served as the financial director of Fuzhou TV Station from 2008 to 2013 and the financial director of Fujian Zhongcheng Group from 2006 to 2008. Prior to that, she was the general manager of Department of Finance of Fujian Huafu Securities Company from 1997 to 2005 and the general manager of Department of Finance of Fujian Huafu Real Estate Company from 1989 to 1997. Ms. Li received her bachelor's degree in Economics from Fuzhou University in 1989. She also completed a Master course in Finance conducted by Xiamen University in 1999. She has been certified as a Senior Accountant in China since 2001, obtained Securities Practitioner qualification in China since 2002 and Independent Director qualification in Shenzhen Stock Exchange since 2007.

**Qingyan Ye** is an independent director. Ms. Ye has been serving as the General Manager of the Investment and Financing Department at Minfa Industrial Group Limited since April 2019. She previously held the position of Deputy General Manager at the same company from April 2016 to April 2019. Ms. Ye also worked as a Team Leader at the Fuzhou Branch of Xiamen Rural Commercial Bank from March 2015 to March 2016 and as a Customer Manager at Ping An Bank Fuzhou Branch from August 2008 to April 2014. Ms. Ye obtained her Bachelor's degree in Finance from Fujian Normal University, graduating in January 2015. Ms. Ye has been chosen as a director appointee because of her extensive financial knowledge and extensive work experience in the investment and financing field.

**Family Relationships**

None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.

**Controlled Company**

Mr. Yongxu Liu, our chief executive officer, president and chairman of the board of directors, currently beneficially owns approximately 91.27% of the aggregate voting power of our outstanding ordinary shares. As a result, we are a "controlled company" within the meaning of the Nasdaq listing rules. As a controlled company, we are permitted to elect to rely on certain exemptions from the obligations to comply with certain corporate governance requirements, including:

● the requirement that a majority of the board of directors consist of independent directors;

● the requirement that our director nominees be selected or recommended solely by independent directors; and

● the requirement that we have a nominating and corporate governance committee and a compensation committee that are composed entirely of independent directors with a written charter addressing the purposes and responsibilities of the committees.

Although we do not intend to rely on the controlled company exemptions under the Nasdaq listing rules even if we are a controlled company, we could elect to rely on these exemptions in the future, and if so, you would not have the same protection afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Additionally, our biggest shareholder, Shengfeng International Limited, has the ability to control the outcome of matters submitted to the shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.

**B. *Compensation*.**

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| | |
|:---|:---|
|  | **2025** |
| Yongxu Liu | $90709.34 |
| Guoping Zheng | $90586.84 |

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**C. *Board Practices*.**

**Board of Directors**

Our board of directors consists of five (5) directors. Our board of directors has determined that our three independent director, Jin Wang, Wen Li, and Qingyan Ye, satisfy the "independence" requirements of the Nasdaq corporate governance rules.

Pursuant to our amended and restated articles of association, the minimum number of directors shall consist of not less than one person provided however that the Company may by ordinary resolution increase or reduce the limits in the numbers of directors. Unless fixed by ordinary resolution of the Company, the maximum number of directors is unlimited. Unless removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting, if any is held. At any annual general meeting held, our directors will be elected by ordinary resolution. At each annual general meeting, each director so elected shall hold office for a one-year term and until the election of their respective successors in office or removed pursuant to our amended and restated articles of association.

A director shall not, as a director, vote in respect of any contract, transaction, arrangement or proposal in which they have an interest which (together with any interest of any person connected with them) is a material interest (otherwise then by virtue of their interests, direct or indirect, in shares or debentures or other securities of, or otherwise in or through, the Company) and if they shall do so their vote shall not be counted, nor in relation thereto shall they be counted in the quorum present at the meeting, but (in the absence of some other material interest than is mentioned below) none of these prohibitions shall apply to: (a) the giving of any security, guarantee or indemnity in respect of: (i) money lent or obligations incurred by them or by any other person for the benefit of the Company or any of its subsidiaries; or (ii) a debt or obligation of the Company or any of its subsidiaries for which the director themself has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security; (b) where the Company or any of its subsidiaries is offering securities in which offer the director is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which the director is to or may participate; (c) any contract, transaction, arrangement or proposal affecting any other body corporate in which he is interested, directly or indirectly and whether as an officer, shareholder, creditor or otherwise howsoever, provided that he (together with persons connected with them) does not to their knowledge hold an interest representing one per cent or more of any class of the equity share capital of such body corporate (or of any third body corporate through which his interest is derived) or of the voting rights available to members of the relevant body corporate; (d) any act or thing done or to be done in respect of any arrangement for the benefit of the employees of the Company or any of its subsidiaries under which they are not accorded as a director any privilege or advantage not generally accorded to the employees to whom such arrangement relates; (e) any matter connected with the purchase or maintenance for any director of insurance against any liability or (to the extent permitted by the Companies Act (Revised) of the Cayman Islands) indemnities in favor of directors, the funding of expenditure by one or more directors in defending proceedings against him or them or the doing of anything to enable such director or directors to avoid incurring such expenditure; or (f) any contract, transaction, arrangement or proposal in which the director has an interest which is not a material interest.

**Duties of Directors**

Under Cayman Islands law, all of our directors owe three types of duties to us: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The Companies Act (Revised) of the Cayman Islands imposes a number of statutory duties on a director. A Cayman Islands director's fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties: (a) a duty to act in what the director *bona fide* considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated articles of association. We have the right to seek damages if a duty owed by any of our directors is breached.

Subject to the Companies Act (Revised) of the Cayman Islands and our memorandum and articles of association, our business shall be managed by the directors who may for that purpose exercise all the powers of the Company.

**Terms of Directors and Executive Officers**

Unless removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting, if one is held. At any annual general meeting held, our directors will be elected by an ordinary resolution of our shareholders. At each annual general meeting, each director so elected shall hold office for a one-year term and until the election of their respective successors in office or removed.

A director may be removed by ordinary resolution.

A director may at any time resign or retire from the office by giving us notice in writing. Unless the notice specifies a different date, the director shall be deemed to have resigned on the date that the notice is delivered to us. A director's office shall be terminated if the director (i) is prohibited under the law of the Cayman Islands from acting as a director; (ii) becomes bankrupt or makes any arrangement or composition with his creditors; (iii) resigned his office by notice to the company; (iv) only held office as a director for a fixed term and such term expires; (v) in the opinion of a registered medical practitioner by whom the director is being treated, the director becomes physically or mentally incapable of acting as a director; (vi) is given notice by the majority of the other directors (not being less than two in number) to vacate office, without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of such director; (vii) is made subject to any law relating to mental health or incompetence, whether by court order or otherwise; or (viii) without the consent of the other directors, is absent from meetings of directors for a continuous period of six months. All of our executive officers are appointed by and serve at the discretion of our board of directors.

**Qualification**

There is currently no shareholding qualification for directors, although a shareholding qualification for directors may be fixed by our shareholders by ordinary resolution.

**Employment Agreements and Indemnification Agreements**

We have entered into employment agreements with each of our executive officers. Pursuant to such employment agreements, we have agreed to employ each of our executive officers for a specified time period, which may be renewed upon both parties' agreement 30 days before the end of the current employment term. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including, but not limited to, the commitments of any serious or persistent breach or non-observance of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a one-month prior written notice. Each executive officer agrees to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.

We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we have agreed to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our Company.

**Insider Participation Concerning Executive Compensation**

Before the establishment of our Compensation Committee, our chief executive officer, president and chairman, Mr. Yongxu Liu, made all determinations regarding executive officer compensation from the inception of the Company. Since the establishment of our Compensation Committee, it has been making all determinations regarding executive officer compensation (please see below).

**Committees of the Board of Directors**

We have established three committees under the board of directors: an audit committee, a compensation committee, and a nominating and corporate governance committee. Our independent directors serve on each of the committees. We have adopted a charter for each of the three committees. Each committee's members and functions are described below.

*Audit Committee*. Our audit committee consists of our three independent director appointees, Jin Wang, Wen Li, and Qingyan Ye. Wen Li is the chairperson of our audit committee. We have determined that each of our independent directors also satisfy the "independence" requirements of Rule 5602(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Securities Exchange Act. Our board also has determined that Wen Li qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq listing rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our Company. The audit committee is responsible for, among other things:

● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

● reviewing with the independent auditors any audit problems or difficulties and management's response;

● discussing the annual audited financial statements with management and the independent auditors;

● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

● reviewing and approving all proposed related party transactions;

● meeting separately and periodically with management and the independent auditors; and

● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

*Compensation Committee*. Our compensation committee consists of our three independent director appointees, Jin Wang, Wen Li, and Qingyan Ye. Jin Wang is the chairperson of our compensation committee. We have determined that each of our independent directors also satisfy the "independence" requirements of Rule 5602(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10C-1 under the Securities Exchange Act. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:

● reviewing and approving the total compensation package for our most senior executive officers;

● approving and overseeing the total compensation package for our executives other than the most senior executive officers;

● reviewing and recommending to the board with respect to the compensation of our directors;

● reviewing periodically and approving any long-term incentive compensation or equity plans;

● selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person's independence from management; and

● reviewing programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

*Nominating and Corporate Governance Committee.* Our nominating and corporate governance committee consists of our three independent director appointees, Jin Wang, Wen Li, and Qingyan Ye. Qingyan Ye is the chairperson of our nominating and corporate governance committee. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:

● identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy;

● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us;

● identifying and recommending to our board the directors to serve as members of committees;

● advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and

● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

**Code of Business Conduct and Ethics**

Our board of directors has adopted a code of business conduct and ethics applicable to all of our directors, officers, and employees. We have made our code of business conduct and ethics publicly available on our website.

**Compensation Recovery Policy** 

We have adopted a compensation recovery policy to provide for the recovery of erroneously-awarded incentive compensation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, final SEC rules, and applicable listing standards.

**D. *Employees*.**

See "Item 4. Information on the Company—B. Business Overview—Employees."

**E. *Share Ownership*.**

The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Class A Ordinary Shares and Class B Ordinary Shares as of the date of this annual report for:

● each of our directors and executive officers; and

● each person known to us to own beneficially more than 5% of our Class A Ordinary Shares or Class B Ordinary Shares.

Beneficial ownership includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A Ordinary Shares or and Class B Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership of each listed person is based on 40,617,513 Class A Ordinary Shares outstanding, and 41,880,000 Class B Ordinary Shares outstanding as of the date of this annual report.

Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Class A Ordinary Shares or Class B Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities. In computing the number of Class A Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Class A Ordinary Shares underlying options, warrants, or convertible securities, including Class B Ordinary Shares, held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Class A Ordinary Shares<br> Beneficially Owned** | **Class A Ordinary Shares<br> Beneficially Owned** | **Class B Ordinary Shares<br> Beneficially Owned** | **Class B Ordinary Shares<br> Beneficially Owned** | **Voting<br> Power\*** |
|  | **Number** | **%** | **Number** | **%** | **%** |
| **Directors, Director Appointees, and Executive Officers<sup>(1)</sup>:** | | | | | |
| Yongxu Liu <sup>(2)</sup> | 500000 | 1.23% | 41880000 | 100% | 91.27% |
| Guoping Zheng |  |  |  |  |  |
| Jin Wang |  |  |  |  |  |
| Wen Li |  |  |  |  |  |
| Qingyan Ye |  |  |  |  |  |
| **All directors, director appointees, and executive officers as a group (5 individuals):** | 500000 | 1.23% | 41880000 | 100% | 91.27% |
| **5% Shareholders:** |  |  |  |  |  |
| Shengfeng International Limited<sup>(2)</sup> |  | -% | 41880000 | 100% | 91.16% |
| Everbright International Development Limited<sup>(3)</sup> | 8736000 | 21.51% |  |  | 1.90% |
| Changle International Limited <sup>(4)</sup> | 3904000 | 9.61% |  |  | 0.85% |
| Yuansheng International Limited <sup>(5)</sup> | 3784000 | 9.32% |  |  | 0.82% |
| Chia-Yu Chen | 3519251 | 8.66% |  |  | 0.77% |
| Sky Top Capital International Limited <sup>(6)</sup> | 2880000 | 7.09% |  |  | 0.63% |
| Double Sun Capital Limited <sup>(7)</sup> | 2846011 | 7.01% |  |  | 0.62% |

---

\* Represents the voting power with respect to all of our Class A Ordinary Shares and Class B Ordinary Shares, voting as a single class. Each holder of Class A Ordinary Shares is entitled to one vote per one Class A Ordinary Share and each holder of Class B Ordinary Shares is entitled to ten votes per one Class B Ordinary Share.

&nbsp;&nbsp;&nbsp;&nbsp;(1) Unless otherwise indicated, the business address of each of the individuals is Shengfeng Building, No. 478 Fuxin East Road, Jin'an District, Fuzhou City, Fujian Province, People's Republic of China, 350001

(2) The number of Class B Ordinary Shares beneficially owned represents 41,880,000 Class B Ordinary Shares held by Shengfeng International Limited, a British Virgin Islands company, which is 100% owned by Yongxu Liu, our CEO, Chairman and President. The registered address of Shengfeng International Limited is 30 de Castro Street, Wickhams Cay 1, P.O. Box 4519, Road Town, Tortola, British Virgin Islands.

&nbsp;&nbsp;&nbsp;&nbsp;(3) The number of Class A Ordinary Shares beneficially owned represents 8,736,000 Class A Ordinary Shares held by Everbright International Development Limited, a British Virgin Islands company. Guangsheng Lin, the general manager of Shengfeng Logistics and one of the Shengfeng Logistics Shareholders, who serves as a director of Everbright International Development Limited, has the dispositive and voting power of the shares held by Everbright International Development Limited. The registered address of Everbright International Development Limited is 4th Floor, Water's Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.

&nbsp;&nbsp;&nbsp;&nbsp;(4) The number of Class A Ordinary Shares beneficially owned represents 3,904,000 Class A Ordinary Shares held by Changle International Limited, a British Virgin Islands company, which is 100% owned by Rong Zheng. The registered address of Changle International Limited is 4th Floor, Water's Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.

&nbsp;&nbsp;&nbsp;&nbsp;(5) The number of Class A Ordinary Shares beneficially owned represents 3,784,000 Class A Ordinary Shares held by Yuansheng International Limited, a British Virgin Islands company, which is 100% owned by Yusheng Yang. The registered address of Yuansheng International Limited is 4th Floor, Water's Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.

&nbsp;&nbsp;&nbsp;&nbsp;(6) The number of Class A Ordinary Shares beneficially owned represents 2,880,000 Class A Ordinary Shares held by Sky Top Capital International Limited, a British Virgin Islands company, which is 100% owned by Qiang Lin. The registered address of Sky Top Capital International Limited is 4th Floor, Water's Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.

&nbsp;&nbsp;&nbsp;&nbsp;(7) The number of Class A Ordinary Shares beneficially owned represents 2,846,011 Class A Ordinary Shares held by Double Sun Capital Limited, a British Virgin Islands company, which is 100% owned by Yiping Wu. The registered address of Double Sun Capital Limited is 4th Floor, Water's Edge Building, Meridian Plaza, Road Town, Tortola, VG1110, British Virgin Islands.

As of the date of this annual report, approximately 45.58% of our issued and outstanding Class A Ordinary Shares are held in the United States by one record holder (CEDE & CO), representing 4.03% of the aggregated voting power.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company.

**F. *Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation.***

Not applicable.

**Item 7. Major Shareholders and Related Party Transactions**

**A. *Major Shareholders*.**

See "Item 6. Directors, Senior Management and Employees—E. Share Ownership."

**B. *Related Party Transactions*.**

**The VIE Agreements**

See "Item 3. Key Information—Our VIE Agreements."

**Material Transactions with Related Parties**

The relationship and the nature of related party transactions are summarized as follow:

The table below sets forth the major related parties and their relationships with the Company as of December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023:

---

| | |
|:---|:---|
| **Name of related parties** | **Relationship with the Company** |
| **Fujian Bafang Shengfeng Logistics Co., Ltd ("Fujian Bafang")** | An equity investee of the Company |
| **Fuzhou Tianyu Shengfeng Industrial Co., Ltd ("Fuzhou Tianyu")** | A company controlled by Yongxu Liu, CEO and Chairman of the Company |
| **Fuzhou Tianyu Shengfeng Property Management Co., Ltd ("Fuzhou Tianyu Management")** | A company under the control of a shareholder |
| **Fuzhou Tianyu Yuanmei Catering Co., Ltd ("Fuzhou Tianyu Catering")** | A company under the control of a shareholder |
| **Fujian Desheng Logistics Co., Ltd ("Fujian Desheng")** | A company under the control of a shareholder |
| **Yongxu Liu** | The Company's CEO and Chairman |
| **Xiying Yang** | CEO's spouse |
| **Yongteng Liu** | CEO's brother |
| **Fujian Yunlian Shengfeng Industry Co., Ltd., ("Fujian Yunlian")** | Shengfeng VIE's shareholder |
| **Fuzhou Puhui Technology Co., Ltd** | Non-controlling shareholder of Ningde Shengfeng Logistics Co. Ltd. |
| **Chongqing Changjiang River Moulding Material (Group) Co., Ltd. ("Chongqing Changjiang")** | Non-controlling shareholder of Liaoning Tianyu Changsheng Supply Chain Management Co., Ltd. |
| **Pingtan Tianyu Shengfeng Technology Co., Ltd. ("Pingtan SF")** | An equity method investee of the Company |
| **Mid-Castle Development Ltd. ("Mid-Castle")** | The Company's shareholder |

---

&nbsp;&nbsp;&nbsp;&nbsp;*i)* *Significant transactions with related parties were as follows:* 

 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended<br> December 31,<br> 2025** | **Year ended<br> December 31,<br> 2024** | **Year ended<br> December 31,<br> 2023** |
| *(All amounts in thousands)* |  |  |  |
| **Transportation services to Fujian Bafang** | $40 | $- | $- |
| **Transportation services to Fujian Desheng** | 28 | 157 | 37 |
| **Transportation services to Chongqing Changjiang and its subsidiaries** | 13307 | 575 | - |
| **Total** | $13375 | $732 | $37 |

---

 

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| ***(All amounts in thousands)*** |  |  |  |
| **Transportation services from Fujian Bafang** | $2796 | $1799 | $1108 |
| **Lease services from Fuzhou Tianyu** | 274 | 227 | 228 |
| **Lease services from Fuzhou Tianyu Management** | 17 | 47 | 17 |
| **Catering services from Tianyu Catering** | - | 1 | 2 |
| **Total** | $3087 | $2074 | $1355 |

---

 *ii)* *Guarantees*

The Company's shareholder, CEO and Chairman, Yongxu Liu, CEO's spouse, Xiying Yang, CEO's brother, Yongteng Liu, Fujian Yunlian and Fuzhou Puhui Technology Co., Ltd, were the guarantors of the Company's bank loans.

*iii)* *Significant balances with related parties were as follows:*

 

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| ***<u>Due from related parties (All amounts in thousands)</u>*** | | |
| **Fuzhou Tianyu** | $42 | $41 |
| **Fujian Desheng** |  | 39 |
| **Fujian Bafang** | 31 |  |
| **Pingtan SF (a)** | 6971 |  |
| **Mid-Castle** | 472 |  |
| **Chongqing Changjiang and its subsidiaries** | 4642 | 621 |
| **Total** | $12158 | $701 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) See Note 4

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| ***<u>Due to related parties (All amounts in thousands)</u>*** | | |
| **Fujian Bafang (a)** | $1699 | $1662 |
| **Fuzhou Tianyu** | 21 | 18 |
| **Yongteng Liu** | 110 |  |
| **Fuzhou Tianyu Management** | - | 7 |
| **Total** | $1830 | $1687 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) On December 10, 2007, the Company entered into an interest-free loan agreement with Fujian Bafang for a principal amount of approximately $1.4 million (RMB 9.6 million). Such loan is due on demand.

**C. *Interests of Experts and Counsel*.**

Not applicable.

**Item 8. Financial Information**

**A. *Consolidated Statements and Other Financial Information*.**

We have appended consolidated financial statements filed as part of this annual report. See "Item 18. Financial Statements."

**Legal Proceedings**

From time to time, we may become a party to various legal or administrative proceedings arising in the ordinary course of our business, including actions with respect to intellectual property infringement, violation of third-party licenses or other rights, breach of contract, and labor and employment claims. We are currently not a party to, and we are not aware of any threat of, any legal or administrative proceedings that, in the opinion of our management, are likely to have any material and adverse effect on our business, financial condition, cash flow, or results of operations.

**Dividend Policy**

See "Item 3. Key Information—Dividend Distributions, Cash Transfer, and Tax Consequences."

**B. *Significant Changes*.**

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

**Item 9. The Offer and Listing.**

**A. *Offer and Listing Details*.**

Our Class A Ordinary Shares have been listed on the Nasdaq Capital Market since March 31, 2023 under the symbol "SFWL."

**B. *Plan of Distribution*.**

Not applicable.

**C. *Markets*.**

Our Class A Ordinary Shares have been listed on the Nasdaq Capital Market since March 31, 2023 under the symbol "SFWL."

**D. *Selling Shareholders*.**

Not applicable.

**E. *Dilution*.**

Not applicable.

**F. *Expenses of the Issue*.**

Not applicable.

**Item 10. Additional Information.**

**A. *Share Capital.***

Not applicable.

**B. *Memorandum and Articles of Association*.**

We incorporate by reference into this annual report the description of our amended and restated memorandum and articles of association, Exhibit 3.1, and the description of differences in corporate laws contained in our registration statement on Form F-1 (File No. 333-267367), as amended, initially filed with the SEC on September 9, 2022.

**C. *Material Contracts*.**

We have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item 4. Information on the Company" or elsewhere in this annual report.

**D. *Exchange Controls*.**

See "Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Foreign Exchange."

**E. *Taxation*.**

**<u>People's Republic of China Enterprise Taxation (for the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau)</u>**

The following brief description of Chinese enterprise income taxation is designed to highlight the enterprise-level taxation on our earnings, which will affect the amount of dividends, if any, we are ultimately able to pay to our shareholders. See "Item 3. Key Information—Dividend Distributions, Cash Transfer, and Tax Consequences*.*"

According to the EIT Law, which was promulgated by the SCNPC on March 16, 2007, became effective on January 1, 2008, and was last amended on December 29, 2018, and the Implementation Rules of the EIT Law, which were promulgated by the State Council on December 6, 2007, and became effective on January 1, 2008, enterprises are divided into resident enterprises and non-resident enterprises. Resident enterprises pay enterprise income tax on their incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC pay enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and non-resident enterprises with income having no substantial connection with their institutions in the PRC, pay enterprise income tax on their income obtained in the PRC at a reduced rate of 10%.

We are a holding company incorporated in the Cayman Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiary. The EIT Law and its implementation rules provide that China-sourced income of foreign enterprises, such as dividends paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at a rate of 10%, unless any such foreign investor's jurisdiction of incorporation has a tax treaty with China that provides for a preferential tax rate or a tax exemption.

Under the EIT Law, an enterprise established outside of China with a "de facto management body" within China is considered a "resident enterprise," which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although the implementation rules of the EIT Law define "de facto management body" as a managing body that actually, comprehensively manage and control the production and operation, staff, accounting, property, and other aspects of an enterprise, the only official guidance for this definition currently available is set forth in SAT Notice 82, which provides guidance on the determination of the tax residence status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although Shengfeng Cayman does not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of SAT Notice 82, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in SAT Notice 82 to evaluate the tax residence status of Shengfeng Cayman and its subsidiaries organized outside the PRC.

According to SAT Notice 82, a Chinese-controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a "de facto management body" in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i) the places where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided or need to be decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the board of directors and files of the minutes of shareholders' meetings of the enterprise are located or preserved within the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside within the territory of China.

We believe that we do not meet some of the conditions outlined in the immediately preceding paragraph. For example, as a holding company, the key assets and records of Shengfeng Cayman, including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed a PRC "resident enterprise" by the PRC tax authorities. Accordingly, we believe that Shengfeng Cayman and its offshore subsidiaries should not be treated as a "resident enterprise" for PRC tax purposes if the criteria for "de facto management body" as set forth in SAT Notice 82 were deemed applicable to us. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body" as applicable to our offshore entities, we will continue to monitor our tax status. It is unclear whether, if we are considered a PRC resident enterprise, holders of our shares or ordinary shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas.

The implementation rules of the EIT Law provide that, (i) if the enterprise that distributes dividends is domiciled in the PRC or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or gains are treated as China-sourced income. It is not clear how "domicile" may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Therefore, if we are considered as a PRC tax resident enterprise for PRC tax purposes, any dividends we pay to our overseas shareholders which are non-resident enterprises as well as gains realized by such shareholders from the transfer of our shares may be regarded as China-sourced income and as a result become subject to PRC withholding tax at a rate of up to 10%. AllBright, our PRC counsel, is unable to provide a "will" opinion because it believes that it is more likely than not that we and our offshore subsidiaries would be treated as non-resident enterprises for PRC tax purposes because we do not meet some of the conditions outlined in SAT Notice 82. Therefore, AllBright believes that it is possible but highly unlikely that the income received by overseas shareholders who are not PRC residents will be regarded as China-sourced income.

See "Item 3. Key Information—D.Risk Factors—Risks Relating to Doing Business in the PRC—Under the PRC Enterprise Income Tax Law, we may be classified as a PRC 'resident enterprise' for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment."

Currently, as resident enterprises in the PRC, Tianyu as well as Shengfeng Logistics and its subsidiaries in PRC are subject to the enterprise income tax at the rate of 25%, except that once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, For qualified small and thin-profit enterprises, the annual taxable income up to RMB3 million is subject to an effective EIT rate of 5% from January 1, 2023 to December 31, 2027. The EIT is calculated based on the entity's global income as determined under PRC tax laws and accounting standards. If the PRC tax authorities determine that Shengfeng Cayman is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to a 10% PRC withholding tax on gains realized on the sale or other disposition of our Class A Ordinary Shares or Class B Ordinary Shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether our non-PRC shareholders would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. There is no guidance from the PRC government to indicate whether or not any tax treaties between the PRC and other countries would apply in circumstances where a non-PRC company was deemed to be a PRC tax resident, and thus there is no basis for expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.

***Value-added Tax***

Under the Circular on Comprehensively Promoting the Pilot Program of the Collection of Value-added Tax to Replace Business ("Circular 36"), which was promulgated by the Ministry of Finance and the SAT on March 23, 2016 and amended in July 2017, entities and individuals engaging in the sale of services, intangible assets or fixed assets within the territory of the PRC are required to pay value added tax, or VAT, instead of business tax.

According to Circular 36, the PRC subsidiaries are subject to VAT, at a rate of 6% to 17% on proceeds received from customers.

According to the Circular of the Ministry of Finance and the SAT on Adjusting Value-added Tax Rates, where a taxpayer engages in a taxable sales activity for the value-added tax purpose or imports goods, the previous applicable 17% tax rates are lowered to 16%.

According to the Circular on Policies to Deepen Value-added Tax Reform, where a taxpayer engages in a taxable sales activity for the value-added tax purpose or imports goods, the previous applicable 16% and 10% tax rates are lowered to 13% and 9% respectively.

**<u>Hong Kong Taxation</u>**

Entities incorporated in Hong Kong are subject to two-tier profit tax rates. The profits tax rate for the first HKD 2 million of assessable profits of a corporation will be subject to the lowered tax rate of 8.25%, while the remaining assessable profits will be subject to the legacy tax rate of 16.5%.

**<u>Cayman Islands Taxation</u>**

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains, or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our Class A Ordinary Shares or Class B Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Class A Ordinary Shares or Class B Ordinary Shares, as the case may be, nor will gains derived from the disposal of our Class A Ordinary Shares or Class B Ordinary Shares be subject to Cayman Islands income or corporation tax.

**<u>United States Federal Income Taxation</u>**

The following does not address the tax consequences to any particular investor or to persons in special tax situations such as:

● banks;

● financial institutions;

● insurance companies;

● regulated investment companies;

● real estate investment trusts;

● broker-dealers;

● persons that elect to mark their securities to market;

● U.S. expatriates or former long-term residents of the U.S.;

● governments or agencies or instrumentalities thereof;

● tax-exempt entities;

● persons liable for alternative minimum tax;

● persons holding our Class A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction;

● persons that actually or constructively own 10% or more of our voting power or value (including by reason of owning our Class A Ordinary Shares);

● persons who acquired our Class A Ordinary Shares pursuant to the exercise of any employee share option or otherwise as compensation;

● persons holding our Class A Ordinary Shares through partnerships or other pass-through entities;

● beneficiaries of a Trust holding our Class A Ordinary Shares; or

● persons holding our Class A Ordinary Shares through a trust.

The discussion set forth below is addressed only to U.S. Holders that purchase Class A Ordinary Shares. Prospective purchasers are urged to consult their own tax advisors about the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Class A Ordinary Shares.

**<u>INVESTORS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE UNITED STATES FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF OUR CLASS A ORDINARY SHARES AND THE POSSIBLE EFFECTS OF ANY CHANGES IN APPLICABLLE TAX LAWS.</u>**

***Material Tax Consequences Applicable to U.S. Holders of Our Class A Ordinary Shares***

The following sets forth the material U.S. federal income tax consequences related to the ownership and disposition of our Class A Ordinary Shares. It is directed to U.S. Holders (as defined below) of our Class A Ordinary Shares and is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This description does not deal with all possible tax consequences relating to ownership and disposition of our Class A Ordinary Shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax laws, state, local and other tax laws.

The following brief description applies only to U.S. Holders (defined below) that hold Class A Ordinary Shares as capital assets and that have the U.S. dollar as their functional currency. This brief description is based on the federal income tax laws of the United States in effect as of the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.

The brief description below of the U.S. federal income tax consequences to "U.S. Holders" will apply to you if you are a beneficial owner of Class A Ordinary Shares and you are, for U.S. federal income tax purposes,

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;

● an estate whose income is subject to U.S. federal income taxation regardless of its source; or

● a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership (or other entities treated as a partnership for United States federal income tax purposes) is a beneficial owner of our Class A Ordinary Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our Class A Ordinary Shares are urged to consult their tax advisors regarding an investment in our Class A Ordinary Shares.

 ****

***Taxation of Dividends and Other Distributions on our Class A Ordinary Shares***

Subject to the PFIC (defined below) rules discussed below, the gross amount of distributions made by us to you with respect to the Class A Ordinary Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations. During the fiscal year ended December 31, 2023, we did not declare any dividends.

With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Class A Ordinary Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. Because there is no income tax treaty between the United States and the Cayman Islands, clause (1) above can be satisfied only if the Class A Ordinary Shares are readily tradable on an established securities market in the United States. Under U.S. Internal Revenue Service authority, Class A Ordinary Shares are considered for purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on certain exchanges, which presently include the NYSE and the Nasdaq Stock Market. On March 31, 2023, our Class A Ordinary Shares were listed and started to be traded on the Nasdaq Capital Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Class A Ordinary Shares, including the effects of any change in law after the date of this annual report.

Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to our Class A Ordinary Shares will constitute "passive category income" but could, in the case of certain U.S. Holders, constitute "general category income."

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Class A Ordinary Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We did not calculate our earnings and profits under U.S. federal income tax principles and did not declare or pay any dividends for the fiscal year ended December 31, 2023. Therefore, a U.S. Holder should expect that a distribution, if any will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

***Taxation of Dispositions of Class A Ordinary Shares***

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Class A Ordinary Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Class A Ordinary Shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.

***Passive Foreign Investment Company ("PFIC") Consequences***

 ****

A non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:

● at least 75% of its gross income for such taxable year is passive income; or

● at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the "asset test").

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in this offering will generally be considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value of our Class A Ordinary Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets (including the cash raised in this offering) on any particular quarterly testing date for purposes of the asset test.

Based on our operations and the composition of our assets, we have determined that we are not a PFIC under the current PFIC rules for the fiscal year ended December 31, 2023. We must make a separate determination each year as to whether we are a PFIC, however, and there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year. Depending on the amount of cash we raised in our offering, together with any other assets held for the production of passive income, it is possible that, for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make the determination following the end of any particular tax year. Although the law in this regard is unclear, we are treating the VIE as being owned by us for United States federal income tax purposes, not only because we control their management decisions, but also because we are entitled to the economic benefits associated with the VIE, and as a result, we are treating the VIE as our wholly owned subsidiary for U.S. federal income tax purposes. If we are not treated as owning the VIE for United States federal income tax purposes, we would likely be treated as a PFIC. In addition, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Class A Ordinary Shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Class A Ordinary Shares and the amount of cash we raise in this offering. Accordingly, fluctuations in the market price of the Class A Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend the cash we raise in this offering. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price of our Class A Ordinary Shares from time to time and the amount of cash we raise in this offering) that may not be within our control. If we are a PFIC for any year during which you hold Class A Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Class A Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely "mark-to-market" election as described below, however, you may avoid some of the adverse effects of the PFIC regime by making a "purging election" (as described below) with respect to the Class A Ordinary Shares.

If we are a PFIC for your taxable year(s) during which you hold Class A Ordinary Shares, you will be subject to special tax rules with respect to any "excess distribution" that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Class A Ordinary Shares, unless you make a "mark-to-market" election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:

● the excess distribution or gain will be allocated ratably over your holding period for the Class A Ordinary Shares;

● the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

● the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or "excess distribution" cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital, even if you hold the Class A Ordinary Shares as capital assets.

A U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the US Internal Revenue Code for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed to hold) Class A Ordinary Shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Class A Ordinary Shares as of the close of such taxable year over your adjusted basis in such Class A Ordinary Shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Class A Ordinary Shares over their fair market value as of the close of the taxable year. Such ordinary loss, however, is allowable only to the extent of any net mark-to-market gains on the Class A Ordinary Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Class A Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Class A Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Class A Ordinary Shares. Your basis in the Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under "—Taxation of Dividends and Other Distributions on our Class A Ordinary Shares" generally would not apply.

The mark-to-market election is available only for "marketable stock," which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including the Nasdaq Capital Market. If the Class A Ordinary Shares are regularly traded on Nasdaq and if you are a holder of Class A Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock in a PFIC may make a "qualified electing fund" election under Section 1295(b) of the US Internal Revenue Code with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder's pro rata share of the corporation's earnings and profits for the taxable year. The qualified electing fund election, however, is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Class A Ordinary Shares in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and provide certain annual information regarding such Class A Ordinary Shares, including regarding distributions received on the Class A Ordinary Shares and any gain realized on the disposition of the Class A Ordinary Shares.

If you do not make a timely "mark-to-market" election (as described above), and if we were a PFIC at any time during the period you hold our Class A Ordinary Shares, then such Class A Ordinary Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a "purging election" for the year we cease to be a PFIC. A "purging election" creates a deemed sale of such Class A Ordinary Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Class A Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Class A Ordinary Shares for tax purposes.

IRC Section 1014(a) provides for a step-up in basis to the fair market value for our Class A Ordinary Shares when inherited from a decedent that was previously a holder of our Class A Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified electing fund election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Class A Ordinary Shares, or a mark-to-market election and ownership of those Class A Ordinary Shares are inherited, a special provision in IRC Section 1291 provides that the new U.S. Holder's basis should be reduced by an amount equal to the Section 1014 basis minus the decedent's adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent's passing, the PFIC rules will cause any new U.S. Holder that inherits our Class A Ordinary Shares from a U.S. Holder to not get a step-up in basis under Section 1014 and instead will receive a carryover basis in those Class A Ordinary Shares.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Class A Ordinary Shares and the elections discussed above.

***Information Reporting and Backup Withholding***

Dividend payments with respect to our Class A Ordinary Shares and proceeds from the sale, exchange or redemption of our Class A Ordinary Shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. Transactions effected through certain brokers or other intermediaries, however, may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.

Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Class A Ordinary Shares, subject to certain exceptions (including an exception for Class A Ordinary Shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Class A Ordinary Shares. Failure to report such information could result in substantial penalties. You should consult your own tax advisor regarding your obligation to file a Form 8938.

**F. *Dividends and Paying Agents*.**

Not applicable.

**G. *Statement by Experts*.**

Not applicable.

**H. *Documents on Display*.**

We are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year. The SEC maintains a website at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing, among other things, the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

**I. *Subsidiary Information.***

Not applicable.

**J. *Annual Report to Security Holders*.**

<u>Not applicable.</u>

**Item 11. Quantitative and Qualitative Disclosures About Market Risk.**

***Concentration of credit risk***

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of December 31, 2025 and 2024, approximately $38.6 million and $40.2 million were deposited with financial institutions located in the PRC, respectively, where there is a RMB500,000 deposit insurance limit for a legal entity's aggregated balance at each bank. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

The Company is also exposed to risk from its accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.

***Concentration of customers and suppliers***

Substantially all revenue was derived from customers located in China. There are no customers from whom revenue individually represent greater than 10% of our total revenue in any of the periods presented.

For the year ended December 31, 2025, Hubei LuGe Logistics Co., Ltd. contributed approximately 18.4% of total cost of revenues of the Company and Zhongbao Zhiyun (Huadian) Logistics Technology Co., Ltd. contributed approximately 18.1% of total cost of revenues of the Company. For the year ended December 31, 2024, Hubei LuGe Logistics Co., Ltd. contributed approximately 22.0% of total cost of revenues of the Company and Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 12.3% of total cost of revenues of the Company. For the year ended December 31, 2023, Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 32.7% of total cost of revenue of the Company.

As of December 31, 2025 and 2024, no customers accounted more than 10% of the account receivables.

As of December 31, 2025, Zhongbao Zhiyun (Huadian) Logistics Technology Co., Ltd. contributed approximately 10.1% of total account payable balances. As of December 31, 2024, Hubei LuGe Logistics Co., Ltd. contributed approximately 10.9% of total account payable balances and Jilin Baoqi Smart Logistics Industry Center Co., Ltd. contributed approximately 10.8% of total account payable balances.

***Interest Rate Risk***

The Company's exposure to changes in interest rates relates primarily to the Company's outstanding debt. While the Company is exposed to interest rate fluctuations, the Company's interest income and expense are most sensitive to fluctuations in China interest rates. Changes in rates affect the interest earned on the Company's cash as costs associated with interest paid on the Company's bank loans. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.

***Foreign Currency Exchange Rate Risk***

Our revenue is denominated in Renminbi. And our costs are denominated in Renminbi as well. Our management considers that the business is not exposed to any significant foreign exchange risk and we have not used any derivative financial instruments to hedge exposure to such risk.

In July 2005, the PRC government changed its decades-old policy of pegging the value of the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. The RMB depreciated by 1.49% in the year ended December 31, 2024 and appreciation by 2.22% in the year ended December 31, 2025. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.

To the extent that we need to convert U.S. dollars into RMB for our operations, appreciation of RMB against the U.S. dollar would reduce the RMB amount we receive from the conversion. Conversely, if we decide to convert RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares, servicing our outstanding debt, or for other business purposes, appreciation of the U.S. dollar against the RMB would reduce the U.S. dollar amounts available to us.

As of December 31, 2025, we had RMB-denominated cash and restricted cash of approximately $38.6 million. A 10% depreciation of RMB against U.S. dollar based on the foreign exchange rate on December 31, 2025 would result in a decrease of approximately $3.9 million in cash and restricted cash. A 10% appreciation of RMB against U.S. dollar based on the foreign exchange rate on December 31, 2025 would result in an increase of approximately $3.9 million in cash and restricted cash. As of December 31, 2024, we had RMB-denominated cash and restricted cash of approximately $40.2 million. A 10% depreciation of RMB against U.S. dollar based on the foreign exchange rate on December 31, 2024 would result in a decrease of approximately $4.0 million in cash and restricted cash. A 10% appreciation of RMB against U.S. dollar based on the foreign exchange rate on December 31, 2024 would result in an increase of approximately $4.0 million in cash and restricted cash.

**Item 12. Description of Securities Other than Equity Securities.**

**A. *Debt Securities*.**

Not applicable.

**B. *Warrants and Rights*.**

Not applicable.

**C. *Other Securities*.**

Not applicable.

**D. *American Depositary Shares*.**

Not applicable.

**Part II**

**Item 13. Defaults, Dividend Arrearages and Delinquencies.**

None.

**Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.**

On March 30, 2023, the SEC declared effective our registration statement on Form F-1 (File Number 333-267367), as amended, filed in connection with our IPO (the "Registration Statement"). On April 4, 2023, we completed our IPO in which we issued and sold an aggregate of 2,400,000 Class A Ordinary Shares, at a price of $4.00 per share for $9.60 million. Univest Securities, LLC was the representative of the underwriters of our IPO. We received net proceeds of approximately $8.5 million, after deducting underwriting discounts, commissions and offering expenses of $1.1 million. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates. The offering terminated after the sale of all securities registered pursuant to the Registration Statement.

For the year ended December 31, 2023, approximately $8.1 million of our IPO proceeds have been used. The remaining of our IPO proceeds have been used for the year ended December 31, 2024.

Below is a summary of the use of the net proceeds from our IPO:

● approximately 8% for expanding and increasing the number of our regional sorting centers; and

● approximately 92% for working capital and other general corporate purposes.

**Item 15. Controls and Procedures.**

**Disclosure Controls and Procedures**

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as of December 31, 2025.

Based on that evaluation, our management has concluded that as of December 31, 2025, our disclosure controls and procedures were not effective. Notwithstanding management's assessment that our internal control over financial reporting was ineffective as of December 31, 2025 due to the material weakness described below, we believe that the consolidated financial statements included in this annual report on Form 20-F correctly present our financial position, results of operations and cash flows for the fiscal years covered thereby in all material respects.

**Management's Annual Report on Internal Control over Financial Reporting**

As required by Rule 13a-15(c) of the Exchange Act, our management conducted an evaluation of our Company's internal control over financial reporting as of December 31, 2025 based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025. In the course of preparing our consolidated financial statements as of December 31, 2025, we identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board of the United States. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

As of December 31, 2025, we identified the material weaknesses related to (i) lack of sufficient in-house personnel in our accounting department with sufficient knowledge of the U.S. GAAP and SEC reporting rules and (ii) lack of proper controls designed and implemented in IT environment and IT general control activities, which mainly associated with areas of change management, access / logical security.

Our management is currently in the process of evaluating the steps necessary to remediate the ineffectiveness, such as (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting functions and to set up a financial and system control framework; (ii) implementing more frequent U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; and (iii) strengthening IT team and implementing a set of IT control with formal documentation of polices and controls in place.

While the implementation of the remediation plan remains ongoing, as of the date of this annual report, we have: (i) engaged an external consultant with extensive expertise in accounting and SEC matters to assist management in enhancing our overall U.S. GAAP and SEC reporting functions; (ii) formulated accounting policies that will be maintained, reviewed, and updated regularly to align with the latest U.S. GAAP standards; (iii) provided additional training to all relevant personnel, focusing on the documentation and evidencing of control operations.

**Attestation Report of the Registered Public Accounting Firm**

This annual report on Form 20-F does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC where domestic and foreign registrants that are non-accelerated filers, which we are, and "emerging growth companies," which we also are, are not required to provide the auditor attestation report.

**Changes in Internal Control over Financial Reporting**

Other than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Item 16. [Reserved]**

**Item 16A. Audit Committee Financial Expert.**

Wen Li qualifies as an "audit committee financial expert" as defined in Item 16A of Form 20-F. Wen Li satisfies the "independence" requirements of Section 5605(a)(2) of the NASDAQ Listing Rules as well as the independence requirements of Rule 10A-3 under the Exchange Act.

I**tem 16B. Code of Ethics.**

Our board of directors has adopted a code of business conduct and ethics, which is applicable to all of our directors, officers, and employees. Our code of business conduct and ethics is publicly available on our website.

**Item 16C. Principal Accountant Fees and Services.**

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered and billed by Marcum Asia CPAs LLP, our independent registered public accounting firm for the periods indicated.

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Audit fees (1) | $365000 | $365000 | $365000 |
| Audit-Related fees | - |  | 80000 |
| Total | $365000 | $365000 | $445000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Audit fees include the aggregate fees billed for each of the fiscal years for professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements and review of the interim financial statements in connection with statutory and regulatory filings

The policy of our audit committee is to pre-approve all audit and non-audit services provided by our independent registered public accounting firm, including audit services, audit-related services, tax services, and other services as described above.

**Item 16D. Exemptions from the Listing Standards for Audit Committees.**

Not applicable.

**Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.**

None.

**Item 16F. Change in Registrant's Certifying Accountant.**

There has been no change in independent accountants for our Company during the two most recent fiscal years or any subsequent interim period except as previously reported in our registration statement on Form F-1(File No. 333- 267367), as amended, initially filed with the SEC on September 9, 2022. There have been no disagreements of the type required to be disclosed by Item 16F(b).

**Item 16G. Corporate Governance.**

As a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq corporate governance listing standards. Nasdaq Listing Rules, however, permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We follow home country practice in lieu of certain requirements of Nasdaq Listing Rules 5620, 5635(a)-(d), 5640, 5250(b)(3) and 5250(d) with respect to certain corporate governance standards (the "**Listing Rules**", each "**Listing Rule**") which may afford less protection to investors. The summaries of the **Listing Rules** and brief statements of our practice are as follows:

**Listing Rule 5620** requires a company listing common stock or voting preferred stock, and their equivalents to hold an annual meeting of shareholders no later than one year after the end of the company's fiscal year-end. However, we follow home country practice where an annual meeting of shareholders is not a requirement. Thus, we do not hold annual meetings of shareholders.

**Listing Rule 5635(a)** requires companies listed on NASDAQ to obtain shareholder approval prior to the issuance of securities in connection with the acquisition of the stock or assets of another company if: **(1)** where, due to the present or potential issuance of common stock, including shares issued pursuant to an earn-out provision or similar type of provision, or securities convertible into or exercisable for common stock, other than a public offering for cash: **(A)** the common stock has or will have upon issuance voting power equal to or in excess of 20% of the voting power outstanding before the issuance of stock or securities convertible into or exercisable for common stock; or **(B)** the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities; or **(2)** any director, officer or Substantial Shareholder (as defined by Listing Rule 5635(e)(3)) of the Company has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the Company or assets to be acquired or in the consideration to be paid in the transaction or series of related transactions and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common shares or voting power of 5% or more. **Listing Rule 5635(b)** requires Companies listed on NASDAQ to obtain shareholder approval prior to the issuance of securities when the issuance or potential issuance will result in a change of control of the Company. **Listing Rule 5635(c)** requires companies listed on NASDAQ to obtain shareholder approval prior to the issuance of securities when a stock option or purchase plan or other equity compensation arrangement is established or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants (with some exceptions). **Listing Rule 5635(d)** requires companies listed on NASDAQ to obtain shareholder approval for a transaction involving the sale, issuance or potential issuance of common stock or securities convertible into or exercisable for common stock, which alone or together with sales by officers, directors, or substantial shareholders, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance at a price less than the lower of (i) the Nasdaq official closing price immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq official closing price of the common stock for the five trading days immediately preceding the signing of the binding agreement. Notwithstanding this general requirement of shareholder approval under **Listing Rules 5635(a)-(d)**, the Cayman Islands do not require shareholder approval prior to any of the foregoing types of issuances. We, therefore, are not required to obtain such shareholder approval prior to entering into a transaction with the potential to issue securities as described above.

**Listing Rule 5640**, pursuant to which the voting rights of existing shareholders of publicly traded common stock registered under Section 12 of the Securities Exchange Act of 1934 may not be disparately reduced or restricted through any corporate action or issuance, which includes without limitation, the adoption of time-phased voting plans, the adoption of capped voting rights plans, the issuance of super-voting stock, or the issuance of stock with voting rights less than the per share voting rights of the existing common stock through an exchange offer. The Company is not subject to equivalent restrictions as a matter of Cayman Islands law. Therefore, our investors may be provided less protection since we follow home country practices.

**Listing Rule 5250(b)(3)** requires companies listed on NASDAQ to disclose third party director and nominee compensation set forth in Rule 5250(b)(3) and **Listing Rule 5250(d)** requires companies listed on NASDAQ to distribute annual and interim reports set forth in Rule 5250(d). Notwithstanding **Listing Rules** 5250(b)(3) and (d), we do not disclose third party director and nominee compensation or distribute annual and interim reports as set forth in these two **Listing Rules** because the Cayman Islands does not have such disclosure and distribution requirements.

Finally, while Nasdaq Listing Rule 5605(b)(1) requires listed companies to have, among other things, a majority of its board members to be independent, as a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of these requirements. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Currently, a majority of our board members are independent. However, if we decide to follow home country practice and change our board composition such that independent directors do not constitute a majority of our board of directors, our shareholders may be afforded less protection than they would otherwise enjoy under Nasdaq's corporate governance requirements applicable to U.S. domestic issuers. See "Item 3. Key Information—D. Risk Factors—Risks Relating to Our Class A Ordinary Shares and the Trading Market—Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer."

**Item 16H. Mine Safety Disclosure.**

Not applicable.

**Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.**

Not applicable.

**Item 16J. Insider Trading Policies.**

Our board of directors has adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules, and regulations, and any listing standards applicable to us in 2024. On March 18, 2026, our board of directors adopted revised insider trading policies and procedures, the form of which is attached as Exhibit 11.2 to this annual report.

Our board of directors has also adopted a compensation recovery policy required by the Nasdaq Listing Rule 5608, the form of which is attached as Exhibit 97.1 to this annual report.

**Item 16K. Cybersecurity.**

We believe cybersecurity is fundamental to our operations and are committed to maintaining robust governance and oversight of cybersecurity risks. We implement comprehensive processes to identify, assess, and manage material risks from cybersecurity threats as part of our broader risk management framework.

Cybersecurity Risk Management and Strategy

Our cybersecurity strategy prioritizes detection, analysis, and response to known, anticipated, or unexpected threats; effective management of security risks; and resilience against incidents. With the evolving cybersecurity landscape, our senior management and board of directors allocate significant resources to cybersecurity risk management, supported by advanced technologies and processes. We assess the impact of cybersecurity threats on our business—strategic direction, operational performance, and financial stability—using insights from known incidents in the shipping industry.

We have implemented risk-based processes, including access controls, data encryption, and regular cybersecurity training for employees. These are designed to evaluate vulnerabilities and threats, minimizing their impact on our operations and stakeholders. Our IT security services are provided by an ISO 27001-certified third-party vendor. We also oversee risks from third-party providers we depend on, conducting due diligence to assess their cybersecurity measures and compliance with regulatory requirements.

Data Privacy and Safety

We have comprehensive procedures to ensure data security, employing encryption and firewalls to prevent and detect risks. Confidential data is stored and transmitted encrypted on separate servers, with regular backups. We prohibit unauthorized third-party access to our data and periodically test our systems to address security and privacy risks.

Governance

Our board of directors oversees cybersecurity risks and incidents, including disclosure compliance and law enforcement cooperation, as we lack a dedicated cybersecurity committee. Senior management regularly discusses cyber risks with the board and reports material incidents. We consult outside counsel on materiality and disclosure matters, with the board making final decisions. Our external IT provider's cybersecurity auditing team independently tests our controls.

Key Elements of Our Approach

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Continuous
 monitoring of cybersecurity threats using data analytics and network systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Engagement of third-party consultants to assess vulnerabilities in our security systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Materiality assessment
 of incidents by senior management and the board, with external input as needed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Board oversight of cybersecurity
 risks and disclosure compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Training—We maintain
 cybersecurity policies and provide periodic employee training to ensure compliance and risk reporting.

Investment and Impact

We continue to invest in cybersecurity systems and controls. Our operations and financial condition have not been materially affected by cybersecurity threats or past incidents, but future risks could have an impact. While we dedicate resources to managing these risks, our efforts may not fully prevent or remediate incidents, potentially affecting our business, reputation, and financial condition.

**Part III**

**Item 17. Financial Statements.**

We have elected to provide financial statements pursuant to Item 18.

**Item 18. Financial Statements.**

The consolidated financial statements of Shengfeng Cayman, and its operating entities are included at the end of this annual report.

**Item 19. Exhibits.**

**EXHIBIT INDEX**

List all exhibits filed as part of the registration statement or annual report, including exhibits incorporated by reference.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Incorporation by Reference** | **Incorporation by Reference** | **Incorporation by Reference** | **Incorporation by Reference** | **Incorporation by Reference** |
| <br>**Exhibit No.** | <br>**Description** | **Form** | **File No.** | **Exhibit <br> No.** | **Filing Date** | **Filed / <br> Furnished** |
| 1.1 | [Amended and Restated Memorandum of Association](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex3-1_shengfeng.htm) | F-1/A | 333-267367 | 3.1 | 10/31/2022 |  |
| 2.1 | [Specimen Certificate for Class A Ordinary Shares](http://www.sec.gov/Archives/edgar/data/1863218/000121390022055120/ea165404ex4-1_shengfeng.htm) | F-1 | 333-267367 | 4.1 | 9/9/2022 |  |
| 2.2 | [Form of Underwriter's Warrants](http://www.sec.gov/Archives/edgar/data/1863218/000121390023005184/ea172103ex1-1_shengfeng.htm) | F-1/A | 333-267367 | 1.1 | 1/26/2023 |  |
| 2.3 | [Description of Securities](http://www.sec.gov/Archives/edgar/data/1863218/000121390023034752/f20f2022ex2-3_shengfeng.htm) | 20-F | 001-41674 | 2.3 | 5/1/2023 |  |
| 4.1 | [Form of Employment Agreement by and between executive officers and the Registrant](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-1_shengfeng.htm) | F-1/A | 333-267367 | 10.1 | 10/31/2022 |  |
| 4.2 | [English Translation of the Technical Consultation and Service Agreement between Tianyu and Shengfeng Logistics dated January 7, 2021](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-4_shengfeng.htm) | F-1/A | 333-267367 | 10.4 | 10/31/2022 |  |
| 4.3 | [English Translation of the form of Powers of Attorney granted by shareholders of Shengfeng Logistics, as currently in effect, and a schedule of all executed Powers of Attorney adopting the same form](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-5_shengfeng.htm) | F-1/A | 333-267367 | 10.5 | 10/31/2022 |  |
| 4.4 | [English Translation of the form of Equity Pledge Agreement by and among Tianyu, Shengfeng Logistics, and shareholders of Shengfeng Logistics dated January 7, 2021, as currently in effect, and a schedule of all executed Equity Pledge Agreement adopting the same form](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-6_shengfeng.htm) | F-1/A | 333-267367 | 10.6 | 10/31/2022 |  |
| 4.5 | [English Translation of the form of Call Option Agreement by and among Tianyu, Shengfeng Logistics, and shareholders of Shengfeng Logistics dated January 7, 2021, as currently in effect, and a schedule of all executed Call Option Agreement adopting the same form](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-7_shengfeng.htm) | F-1/A | 333-267367 | 10.7 | 10/31/2022 |  |
| 4.6 | [English Translation of the form of Spousal Consent granted by the spouse of each individual shareholder of Shengfeng Logistics, as currently in effect, and a schedule of all executed Spousal Consents adopting the same form](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-8_shengfeng.htm) | F-1/A | 333-267367 | 10.8 | 10/31/2022 |  |
| 4.7 | [English Translation of the form of Voting Rights Proxy Agreement by and among Tianyu, Shengfeng Logistics, and shareholders of Shengfeng Logistics dated January 7, 2021, as currently in effect, and a schedule of all executed Voting Rights Proxy Agreement adopting the same form](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-9_shengfeng.htm) | F-1/A | 333-267367 | 10.9 | 10/31/2022 |  |
| 4.8 | [English Translation of the form of Freight Transportation Agreement between the Registrant and its Clients](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-10_shengfeng.htm) | F-1/A | 333-267367 | 10.10 | 10/31/2022 |  |
| 4.9 | [English Translation of the form of Warehouse Service Contract between the Registrant and its Cloud Storage Service Clients](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-11_shengfeng.htm) | F-1/A | 333-267367 | 10.11 | 10/31/2022 |  |
| 4.10 | [English Translation of the form of Freight Transportation Contract between the Registrant and its Transportation Providers](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-12_shengfeng.htm) | F-1/A | 333-267367 | 10.12 | 10/31/2022 |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| 4.11 | [English Translation of the form of House (Warehouse) / Site Lease Contract](http://www.sec.gov/Archives/edgar/data/1863218/000121390022075214/ea169212ex10-13_shengfeng.htm) | F-1/A | 333-267367 | 10.13 | 11/25/2022 |  |
| 4.12 | [English Translation of the Road Freight Transportation Cooperation Agreement by and between Shengfeng Logistics and Hubei Luge Logistics Co., Ltd. dated June 30, 2019](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex10-14_shengfeng.htm) | F-1/A | 333-267367 | 10.14 | 10/31/2022 |  |
| 4.13 | [English Translation of the Road Freight Transportation Platform Cooperation Agreement by and between Shengfeng Logistics and Hefei Weitian Yuntong Information Technology Co., Ltd. dated September 24, 2025](ea028257901_ex4-13.htm) |  |  |  |  | \* |
| 4.14 | [English Translation of form of the Fixed Asset Loan Agreement by and between Shengfeng Logistics and Bank of China Co., Ltd dated December 7, 2023](http://www.sec.gov/Archives/edgar/data/1863218/000101376225003699/ea023554001ex4-14_sheng.htm) | 20-F | 001-41674 | 4.14 | 3/28/2025 |  |
| 4.15 | [English Translation of form of the Working Capital Loan Agreement by and between Shengfeng Logistics and Xiamen International Bank Co., Ltd.](ea028257901_ex4-15.htm) |  |  |  |  | \* |
| 4.16 | [English Translation of form of the Working Capital Loan Agreement by and between Shengfeng Logistics and Bank of China Co., Ltd.](ea028257901_ex4-16.htm) |  |  |  |  | \* |
| 4.17 | [English Translation of form of the Credit Facility Agreement by and between Shengfeng Logistics and China Merchant Bank.](ea028257901_ex4-17.htm) |  |  |  |  | \* |
| 4.18 | [English Translation of form of the Working Capital Loan Agreement by and between Shengfeng Logistics and Industrial and Commercial Bank of China Co., Ltd.](ea028257901_ex4-18.htm) |  |  |  |  | \* |
| 4.19 | [English Translation of form of the Credit Facility Agreement by and between Shengfeng Logistics and Haixia Bank of Fujian Co., Ltd.](ea028257901_ex4-19.htm) |  |  |  |  | \* |
| 4.2 | [English Translation of form of the Working Capital Loan Agreement by and between Shengfeng Logistics and Industrial Bank Co., Ltd.](ea028257901_ex4-20.htm) |  |  |  |  | \* |
| 4.21 | [English Translation of form of the Working Capital Loan Agreement by and between Shengfeng Logistics and Postal Savings Bank of China Co., Ltd.](ea028257901_ex4-21.htm) |  |  |  |  | \* |
| 4.22 | [English Translation of form of Shengfeng Building Lease Contract by and between Shengfeng Logistics and Fuzhou Tianyu Shengfeng Industrial Co., Ltd. dated November 1, 2024](http://www.sec.gov/Archives/edgar/data/1863218/000101376225003699/ea023554001ex4-22_sheng.htm) | 20-F | 001-41674 | 4.22 | 3/28/2025 |  |
| 8.1 | [List of subsidiaries of the Registrant](ea028257901_ex8-1.htm) |  |  |  |  | \* |
| 11.1 | [Code of Business Conduct and Ethics of the Registrant](http://www.sec.gov/Archives/edgar/data/1863218/000121390022067752/ea167610ex99-1_shengfeng.htm) | F-1/A | 333-267367 | 99.1 | 10/31/2022 |  |
| 11.2 | [Insider Trading Policy of the Registrant](ea028257901_ex11-2.htm) |  |  |  |  | \* |
| 12.1 | [Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028257901_ex12-1.htm) |  |  |  |  | \* |
| 12.2 | [Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028257901_ex12-2.htm) |  |  |  |  | \* |
| 13.1 | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028257901_ex13-1.htm) |  |  |  |  | \*\* |
| 13.2 | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028257901_ex13-2.htm) |  |  |  |  | \*\* |
| 97.1 | [Compensation Recovery Policy of the Registrant](http://www.sec.gov/Archives/edgar/data/1863218/000121390024028073/ea020179601ex97-1_shengfeng.htm) | 20-F | 001-41674 | 97.1 | 3/29/2024 |  |
| 99.1 | [Director's Offer Letter of Guoping Zheng](https://www.sec.gov/Archives/edgar/data/1863218/000121390025050737/ea024461801ex99-2_shengfeng.htm) | 6-K | 001-41674 | 99.2 | 6/3/2025 |  |
| 99.1 | [Director's Offer Letter of Jin Wang](https://www.sec.gov/Archives/edgar/data/1863218/000121390025050737/ea024461801ex99-1_shengfeng.htm) | 6-K | 001-41674 | 99.1 | 6/3/2025 |  |
| 101 | The following financial statements from the Company's Annual Report on Form 20-F for the year ended December 31, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Changes in Shareholders' Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags |  |  |  |  | \* |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  |  |  | \* |

---

\* Filed herewith.

\*\* Furnished herewith.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | | |
|:---|:---|:---|
|  | Shengfeng Development Limited | Shengfeng Development Limited |
|  | By: | /s/ *Yongxu Liu* |
|  |  | Yongxu Liu |
|  |  | Chief Executive Officer, President,<br> Director, and Chairman |
|  |  | (Principal Executive Officer) |
| Date: March 27, 2026 |  |  |

---

**SHENGFENG DEVELOPMENT LIMITED**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **CONTENTS** | **PAGE(S)** |
| **CONSOLIDATED FINANCIAL STATEMENTS** |  |
| [REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 5395)](#f_001) | F-2 |
| [AUDITED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024](#f_002) | F-3 |
| [AUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023](#f_003) | F-4 |
| [AUDITED CONSOLIDAED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023](#f_004) | F-5 |
| [AUDITED CONSOLIDATED STATEMETNS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023](#f_005) | F-6 |
| [NOTES TO CONSOLIDATED FINANCIAL STATEMENTS](#f_006) | F-7 – F-47 |

---

![](ea028257901_img10.jpg)

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and Board of Directors of

Shengfeng Development Limited

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheets of Shengfeng Development Limited (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income and comprehensive income, change in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

We have served as the Company's auditor since 2020 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September 1, 2022).

New York, New York

March 27, 2026

**SHENGFENG DEVELOPMENT LIMITED**

**CONSOLIDATED BALANCE SHEETS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

---

| | | |
|:---|:---|:---|
|  | **As of <br> December 31,<br> 2025** | **As of<br> December 31, <br> 2024** |
| **Assets** | | |
| **Current Assets:** | | |
| &nbsp;&nbsp;&nbsp;**Cash and cash equivalents** | $35290 | $34668 |
| &nbsp;&nbsp;&nbsp;**Restricted cash** | 3278 | 5545 |
| &nbsp;&nbsp;&nbsp;**Notes receivable** | 7414 | 7340 |
| &nbsp;&nbsp;&nbsp;**Accounts receivable, net** | 136264 | 127300 |
| &nbsp;&nbsp;&nbsp;**Prepayments and other current assets, net** | 22189 | 29684 |
| &nbsp;&nbsp;&nbsp;**Due from related parties** | 12158 | 701 |
| **Total Current Assets** | 216593 | 205238 |
| &nbsp;&nbsp;&nbsp;**Property and equipment, net** | 70094 | 59968 |
| &nbsp;&nbsp;&nbsp;**Intangible assets, net** | 11213 | 11413 |
| &nbsp;&nbsp;&nbsp;**Operating lease right-of-use assets, net** | 5720 | 9918 |
| &nbsp;&nbsp;&nbsp;**Long-term investments** | 8873 | 1900 |
| &nbsp;&nbsp;&nbsp;**Deposits for investment** | 9177 | 10573 |
| &nbsp;&nbsp;&nbsp;**Deferred tax assets** | 1313 | 1434 |
| &nbsp;&nbsp;&nbsp;**Other non-current assets** | 23984 | 9686 |
| **Total Assets** | $346967 | $310130 |
| **Liabilities and Equity** |  |  |
| **Liabilities** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;**Notes payable** | $9248 | $14907 |
| &nbsp;&nbsp;&nbsp;**Accounts payable** | 89642 | 88734 |
| &nbsp;&nbsp;&nbsp;**Short-term bank loans** | 44652 | 39401 |
| &nbsp;&nbsp;&nbsp;**Long-term bank loans, current** | 2769 | - |
| &nbsp;&nbsp;&nbsp;**Due to related parties** | 1830 | 1687 |
| &nbsp;&nbsp;&nbsp;**Salary and welfare payables** | 5554 | 3047 |
| &nbsp;&nbsp;&nbsp;**Accrued expenses and other current liabilities** | 10099 | 7673 |
| &nbsp;&nbsp;&nbsp;**Operating lease liabilities, current** | 2669 | 4218 |
| &nbsp;&nbsp;&nbsp;**Tax payables** | 4150 | 3017 |
| **Total Current Liabilities** | 170613 | 162684 |
| &nbsp;&nbsp;&nbsp;**Long-term bank loans** | 33832 | 16390 |
| &nbsp;&nbsp;&nbsp;**Operating lease liabilities, non-current** | 2156 | 4719 |
| &nbsp;&nbsp;&nbsp;**Deferred tax liabilities** | 247 | 53 |
| &nbsp;&nbsp;&nbsp;**Other non-current liabilities** | 1256 | 2838 |
| **Total Liabilities** | 208104 | 186684 |
| **Commitments and Contingencies** |  |  |
| **Equity** |  |  |
| &nbsp;&nbsp;&nbsp;**Class A Ordinary share, $0.0001 par value, 400,000,000 shares authorized; 40,617,513 shares issued and outstanding as of December 31, 2025 and 2024** | 4 | 4 |
| &nbsp;&nbsp;&nbsp;**Class B Ordinary share, $0.0001 par value, 100,000,000 shares authorized; 41,880,000 shares issued and outstanding as of December 31, 2025 and 2024** | 4 | 4 |
| &nbsp;&nbsp;&nbsp;**Additional paid-in capital** | 83762 | 83762 |
| &nbsp;&nbsp;&nbsp;**Statutory reserves** | 7311 | 5959 |
| &nbsp;&nbsp;&nbsp;**Retained earnings** | 47036 | 36462 |
| &nbsp;&nbsp;&nbsp;**Accumulated other comprehensive loss** | (6200) | (9047) |
| **Total Shengfeng Development Limited's Shareholders' Equity** | 131917 | 117144 |
| **Non-controlling Interests** | 6946 | 6302 |
| **Total Equity** | 138863 | 123446 |
| **Total Liabilities and Equity** | $346967 | $310130 |

---

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

**SHENGFENG DEVELOPMENT LIMITED**

**CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Revenues** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Transportation** | $554761 | $484754 | $383211 |
| &nbsp;&nbsp;&nbsp;**Warehouse storage management service** | 14258 | 16432 | 18160 |
| &nbsp;&nbsp;&nbsp;**Others** | 3459 | 2972 | 2750 |
| **Total revenues** | **572478** | **504158** | **404121** |
| **Cost of revenues** | (519390) | (457874) | (357615) |
| **Gross profit** | **53088** | **46284** | **46506** |
| **Operating expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Selling and marketing** | (5999) | (5964) | (6688) |
| &nbsp;&nbsp;&nbsp;**General and administrative** | (30209) | (25654) | (25912) |
| **Total operating expenses** | **(36208)** | **(31618)** | **(32600)** |
| **Income from operations** | **16880** | **14666** | **13906** |
| **Other income (expense)** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Interest income** | 255 | 159 | 126 |
| &nbsp;&nbsp;&nbsp;**Interest expense** | (2736) | (1972) | (1775) |
| &nbsp;&nbsp;&nbsp;**Other (expense) income, net** | (143) | (360) | 371 |
| **Income before income taxes** | **14256** | **12493** | **12628** |
| **Provision for income taxes** | **(2047)** | **(1666)** | **(2320)** |
| **Net income** | **12209** | **10827** | **10308** |
| **Less: income (loss) attributable to non-controlling interests** | 283 | (51) | 14 |
| **Net income attributable to Shengfeng Development Limited's shareholders** | $**11926** | $**10878** | $**10294** |
| **Comprehensive income** |  |  |  |
| **Net income** | 12209 | 10827 | 10308 |
| **Foreign currency translation adjustments** | 2998 | (1764) | (1824) |
| **Total comprehensive income** | 15207 | 9063 | 8484 |
| **Less: comprehensive income (loss) attributable to non-controlling interests** | 434 | (134) | (53) |
| **Total comprehensive income attributable to Shengfeng Development Limited** | $14773 | $9197 | $8537 |
| **Weighted average shares outstanding used in calculating basic and diluted earnings per share:** |  |  |  |
| **Class A and Class B ordinary shares - Basic and diluted** | 82497513 | 82497513 | 81806660 |
| **Earnings per share** |  |  |  |
| **Class A and Class B ordinary shares - Basic and diluted** | $0.14 | $0.13 | $0.13 |

---

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

**SHENGFENG DEVELOPMENT LIMITED**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A <br> Ordinary Shares<br> ($0.0001 par value)** | **Class A <br> Ordinary Shares<br> ($0.0001 par value)** | **Class B <br> Ordinary Shares<br> ($0.0001 par value)** | **Class B <br> Ordinary Shares<br> ($0.0001 par value)** | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> paid-in**<br>**capital** | **Statutory**<br>**reserves** | **Retained**<br>**earnings** | **Accumulated<br> other<br> comprehensive**<br>**loss** | **Non-<br> controlling**<br>**interests** | **Total**<br>**equity** |
| **Balance as of December 31, 2022** | 38120000 | $4 | 41880000 | $4 | $75575 | $3974 | $17275 | $(5609) | $3863 | $95086 |
| **Net income** |  | - |  | - | - | - | 10294 | - | 14 | 10308 |
| **Currency translation adjustments** |  | - |  | - | - | - | - | (1757) | (67) | (1824) |
| **Capital contribution from non-controlling shareholders** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - |  | - | - | - | - | - | 556 | 556 |
| **Appropriations to statutory reserves** |  | - |  | &nbsp;&nbsp;&nbsp;&nbsp; - | - | 880 | (880) | - | - | - |
| **Net proceeds from initial public offering-shares** | 2400000 | - |  | - | 7819 | - | - | - | - | 7819 |
| **Net proceeds from initial public offering - warrants** |  | - |  | - | 368 | - | - | - | - | 368 |
| **Shares issued for warrants exercised** | 97513 | - | - | - | - | - | - | - | - | - |
| **Balance as of December 31, 2023** | 40617513 | $4 | 41880000 | $4 | $83762 | $4854 | $26689 | $(7366) | $4366 | $112313 |
| **Net income (loss)** |  | - |  | - | - | - | 10878 | - | (51) | 10827 |
| **Currency translation adjustments** |  | - |  | - | - | - | - | (1681) | (83) | (1764) |
| **Capital contribution from non-controlling shareholders** |  | - |  | - | - | - | - | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | 2070 | 2070 |
| **Appropriations to statutory reserves** | - | - | - | - | - | 1105 | (1105) | - | - | - |
| **Balance as of December 31, 2024** | 40617513 | $4 | 41880000 | $4 | $83762 | $5959 | $36462 | $(9047) | $6302 | $123446 |
| **Net income** |  | - |  | - | - | - | 11926 | - | 283 | 12209 |
| **Appropriations to statutory reserves** |  | - |  | - | - | 1352 | (1352) | - | - | - |
| **Capital contribution from non-controlling shareholders** |  | - |  | - | - | - | - | - | 238 | 238 |
| **Dividend to non-controlling shareholders** |  | - |  | - | - | - | - | - | (28) | (28) |
| **Foreign currency translation adjustments** | - |  | - | - | - | - | - | 2847 | 151 | 2998 |
| **Balance as of December 31, 2025** | 40617513 | $4 | 41880000 | $4 | $83762 | $7311 | $47036 | $(6200) | $6946 | $138863 |

---

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

**SHENGFENG DEVELOPMENT LIMITED**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Cash flows from operating activities:** |  |  |  |
| **Net income** | $12209 | $10827 | $10308 |
| **Adjustments to reconcile net income to net cash provided by operating activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Depreciation and amortization of property and equipment** | 6427 | 6355 | 6446 |
| &nbsp;&nbsp;&nbsp;**Amortization of operating lease expense** | 4604 | 6581 | 9337 |
| &nbsp;&nbsp;&nbsp;**Amortization of intangible assets** | 452 | 652 | 591 |
| &nbsp;&nbsp;&nbsp;**(Recovery of) provision for credit losses** | (95) | 88 | 566 |
| &nbsp;&nbsp;&nbsp;**Loss (income) from equity method investment** | 41 | (15) | (19) |
| &nbsp;&nbsp;&nbsp;**(Gain) loss on disposal of property and equipment** | (57) | 315 | (283) |
| &nbsp;&nbsp;&nbsp;**(Gain) loss from disposal of subsidiaries** | - | (8) | 90 |
| &nbsp;&nbsp;&nbsp;**Deferred income taxes** | 341 | 589 | 1524 |
| **Changes in operating assets and liabilities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Notes receivable** | (111) | (724) | (682) |
| &nbsp;&nbsp;&nbsp;**Accounts receivable** | (5782) | (31241) | (10734) |
| &nbsp;&nbsp;&nbsp;**Prepayments and other current assets** | 3300 | 4823 | 3450 |
| &nbsp;&nbsp;&nbsp;**Due from related parties** | (4407) | (626) | (40) |
| &nbsp;&nbsp;&nbsp;**Other non-current assets** | 945 | 2939 | (3670) |
| &nbsp;&nbsp;&nbsp;**Accounts payable** | (1089) | 29313 | 4509 |
| &nbsp;&nbsp;&nbsp;**Due to related parties** | (6) | 8 | (80) |
| &nbsp;&nbsp;&nbsp;**Salary and welfare payable** | 2400 | (1536) | 1457 |
| &nbsp;&nbsp;&nbsp;**Accrued expenses and other current liabilities** | 1997 | (8220) | 177 |
| &nbsp;&nbsp;&nbsp;**Operating lease liabilities** | (4497) | (6769) | (9417) |
| &nbsp;&nbsp;&nbsp;**Tax payables** | 1048 | 779 | 105 |
| &nbsp;&nbsp;&nbsp;**Other non-current liabilities** | (1621) | 880 | 500 |
| **Net cash provided by operating activities** | 16099 | 15010 | 14135 |
| **Cash flows from investing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Investments deposit refund** | 1610 | 6810 | 5676 |
| &nbsp;&nbsp;&nbsp;**Investments deposit** | - | (9057) | - |
| &nbsp;&nbsp;&nbsp;**Purchase of long-term investments** | (6160) | - | - |
| &nbsp;&nbsp;&nbsp;**Loan to a related party** | (2800) | - | - |
| &nbsp;&nbsp;&nbsp;**Loan to third parties** | (11354) | (5757) | - |
| &nbsp;&nbsp;&nbsp;**Loan repaid from a third party** | - | 2808 | - |
| &nbsp;&nbsp;&nbsp;**Purchase of intangible assets** | - | (9096) | (17932) |
| &nbsp;&nbsp;&nbsp;**Purchase of property and equipment** | (18979) | (29465) | (10780) |
| &nbsp;&nbsp;&nbsp;**Proceeds from disposal of property and equipment** | 255 | 1332 | 1212 |
| &nbsp;&nbsp;&nbsp;**Proceeds from disposal of subsidiaries** | - | 9656 | 51 |
| &nbsp;&nbsp;&nbsp;**Consideration deposit received from third parties** | - | 140 | 2838 |
| &nbsp;&nbsp;&nbsp;**Dividend received from investment** | - | - | 114 |
| **Net cash used in investing activities** | (37428) | (32629) | (18821) |
| **Cash flows from financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Proceeds from initial public offering** | - | - | 8547 |
| &nbsp;&nbsp;&nbsp;**Proceeds from notes payable** | 9114 | 34003 | 8515 |
| &nbsp;&nbsp;&nbsp;**Repayments of notes payable** | (15016) | (27381) | (2022) |
| &nbsp;&nbsp;&nbsp;**Proceeds from short-term bank loans** | 54439 | 50301 | 37876 |
| &nbsp;&nbsp;&nbsp;**Repayments of short-term bank loans** | (50152) | (46464) | (48661) |
| &nbsp;&nbsp;&nbsp;**Proceeds from long-term bank loans** | 19522 | 16543 | - |
| &nbsp;&nbsp;&nbsp;**Due to related parties** | 110 | - | (600) |
| &nbsp;&nbsp;&nbsp;**Capital contribution from non-controlling shareholders** | 238 | 2070 | 556 |
| &nbsp;&nbsp;&nbsp;**Dividend to non-controlling shareholders** | (28) | - | - |
| &nbsp;&nbsp;&nbsp;**Payment of deferred issuance costs** | - | - | (279) |
| &nbsp;&nbsp;&nbsp;**Loans from third parties** | 1190 | - | - |
| &nbsp;&nbsp;&nbsp;**Repayment to a third party** | (600) | - | - |
| &nbsp;&nbsp;&nbsp;**Advance from a third-party** | - | - | 7237 |
| **Net cash provided by financing activities** | 18817 | 29072 | 11169 |
| **Effects of exchange rate changes on cash, cash equivalents and restricted cash** | 867 | (533) | (558) |
| **Net (decrease) increase in cash, cash equivalents and restricted cash** | (1645) | 10920 | 5925 |
| **Cash, cash equivalents and restricted cash, beginning of year** | 40213 | 29293 | 23368 |
| **Cash, cash equivalents and restricted cash, end of year** | $38568 | $40213 | $29293 |
| **Supplemental cash flow information:** |  |  |  |
| **Cash paid for income tax** | $1456 | $589 | $634 |
| **Cash paid for interest** | $2349 | $1924 | $1775 |
| **Non-cash transaction in investing and financing activities:** |  |  |  |
| **Liabilities (settled) incurred for purchase of property and equipment** | $(362) | $344 | $(387) |
| **Operating lease right-of-use assets extinguished in exchange for operating lease liabilities** | $(181) | $(2115) | $(1347) |
| **Disposition consideration settled by long-term investment** | $700 | $- | $- |
| **Reclassification of deferred issuance costs** | $- | $- | $81 |
| **Reconciliation to amount on consolidated balance sheets:** |  |  |  |
| **Cash and cash equivalents** | $35290 | $34668 | $26725 |
| **Restricted cash** | 3278 | 5545 | 2568 |
| **Total cash, cash equivalents and restricted cash** | $38568 | $40213 | $29293 |

---

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

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND NATURE OF OPERATIONS** 

Shengfeng Development Limited ("Shengfeng" or the "Company"), is a holding company incorporated under the laws of the Cayman Islands on July 16, 2020, as an exempted company with limited liability. The Company has no substantive operations other than holding all of the outstanding share capital of Shengfeng Holding Limited ("Shengfeng HK") established under the laws of Hong Kong on August 18, 2020.

Shengfeng HK is also a holding company holding all of the outstanding equity of Fujian Tianyu Shengfeng Logistics Co., Ltd. ("Tianyu" or "Shengfeng WFOE" or "WFOE"), which was established on December 16, 2020 under the laws of the People's Republic of China ("PRC" or "China").

The Company, through its variable interest entity ("VIE"), Shengfeng Logistics Group Co., Ltd. ("Shengfeng VIE" or "VIE"), and its subsidiaries, operates as a transportation and warehouse storage management services provider in the PRC. Shengfeng VIE was incorporated on December 7, 2001 under the laws of the PRC. Paid-in capital of Shengfeng VIE was approximately $27.2 million (approximately RMB189.7 million) as of December 31, 2025.

On December 18, 2020, the Company completed a reorganization of entities under common control of its then existing shareholders, who collectively owned all of the equity interests of the Company prior to the reorganization. The Company, and Shengfeng HK were established as the holding companies of Shengfeng WFOE. Shengfeng WFOE is the primary beneficiary of Shengfeng VIE and its subsidiaries, and all of these entities included in the Company are under common control which results in the consolidation of Shengfeng VIE and its subsidiaries which have been accounted for as a reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of the Company.

As of December 31, 2025, the accompanying consolidated financial statements reflect the activities of the Company and each of the following entities, including its WFOE and VIE:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal activities** |
| **1** | Shengfeng Holding Limited ("Shengfeng HK") | Hong Kong | August 18, 2020 | 100% | Investment holding of Tianyu |
| **2** | Tianyu Shengfeng Logistics Group Co., Ltd. ("Tianyu", formerly known as "Fujian Tianyu Shengfeng Logistics Co., Ltd ") | Fujian, the PRC | December 16, 2020 | 100% | Investment holding of Shengfeng VIE |
| **3** | Singularity Digital Technology Co., Ltd. | Cayman Islands | September 12, 2025 | 100% | Software and technology consulting |
| **4** | Shengfeng (Viet Nam) International Supply Chain CO., Ltd. | Vietnam | November 26, 2025 | 100% | Transportation and warehouse storage management service |
|  | **VIE and VIE's subsidiaries:** |  |  |  |  |
| **5** | Shengfeng Logistics Group Co., Ltd. ("Shengfeng VIE" or "Shengfeng Logistics") | Fujian, the PRC | December 7, 2001 | 100% | Transportation and warehouse storage management service |
| **6** | Fuqing Shengfeng Logistics Co., Ltd. | Fujian, the PRC | April 15, 2011 | 100% | Transportation and warehouse storage management service |
| **7** | Xiamen Shengfeng Logistics Co., Ltd. | Fujian, the PRC | December 22, 2011 | 100% | Transportation and warehouse storage management service |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal activities** |
| **8** | Guangdong Shengfeng Logistics Co., Ltd. | Guangdong, the PRC | December 30, 2011 | 100% | Transportation and warehouse storage management service |
| **9** | Hainan Shengfeng Supply Chain Management Co., Ltd. | Hainan, the PRC | August 18, 2020 | 51% | Transportation and warehouse storage management service |
| **10** | Beijing Tianyushengfeng E-commerce Technology Co., Ltd. | Beijing, the PRC | January 9, 2004 | 100% | Transportation and warehouse storage management service |
| **11** | Beijing Shengfeng Supply Chain Management Co., Ltd. | Beijing, the PRC | April 13, 2016 | 100% | Transportation and warehouse storage management service |
| **12** | Shengfeng Logistics (Guizhou) Co., Ltd. | Guizhou, the PRC | August 15, 2017 | 100% | Transportation and warehouse storage management service |
| **13** | Shengfeng Logistics (Tianjin) Co., Ltd. | Tianjin, the PRC | March 8, 2016 | 100% | Transportation and warehouse storage management service |
| **14** | Shengfeng Logistics (Shandong) Co., Ltd. | Shandong, the PRC | March 15, 2016 | 100% | Transportation and warehouse storage management service |
| **15** | Shengfeng Logistics Hebei Co., Ltd. | Hebei, the PRC | February 17, 2016 | 100% | Transportation and warehouse storage management service |
| **16** | Shengfeng Logistics (Henan) Co., Ltd. | Henan, the PRC | March 28, 2016 | 100% | Transportation and warehouse storage management service |
| **17** | Shengfeng Logistics (Liaoning) Co., Ltd. | Liaoning, the PRC | March 2, 2016 | 100% | Transportation and warehouse storage management service |
| **18** | Shengfeng Logistics (Yunnan) Co., Ltd. | Yunnan, the PRC | January 25, 2016 | 100% | Transportation and warehouse storage management service |
| **19** | Shengfeng Logistics (Guangxi) Co., Ltd. | Guangxi, the PRC | February 1, 2016 | 100% | Transportation and warehouse storage management service |
| **20** | Hubei Shengfeng Logistics Co., Ltd. | Hubei, the PRC | December 15, 2010 | 100% | Transportation and warehouse storage management service |
| **21** | Shengfeng Logistics Group (Shanghai) Supply Chain Management Co., Ltd. | Shanghai, the PRC | August 26, 2015 | 100% | Transportation and warehouse storage management service |
| **22** | Shanghai Shengxu Logistics Co., Ltd. | Shanghai, the PRC | June 4, 2003 | 100% | Transportation and warehouse storage management service |
| **23** | Hangzhou Shengfeng Logistics Co., Ltd. | Zhejiang, the PRC | June 10, 2010 | 100% | Transportation and warehouse storage management service |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal activities** |
| **24** | Nanjing Shengfeng Logistics Co., Ltd. | Jiangsu, the PRC | August 30, 2011 | 100% | Transportation and warehouse storage management service |
| **25** | Suzhou Shengfeng Logistics Co., Ltd. | Jiangsu, the PRC | January 14, 2005 | 90% | Transportation and warehouse storage management service |
| **26** | Suzhou Shengfeng Supply Chain Management Co., Ltd. | Jiangsu, the PRC | August 9, 2019 | 100% | Transportation and warehouse storage management service |
| **27** | Shengfeng Supply Chain Management Co., Ltd. | Fujian, the PRC | June 19, 2014 | 100% | Transportation and warehouse storage management service |
| **28** | Fuzhou Shengfeng Transportation Co., Ltd. | Fujian, the PRC | April 18, 2019 | 100% | Transportation and warehouse storage management service |
| **29** | Sichuan Shengfeng Logistics Co., Ltd. | Sichuan, the PRC | June 27, 2019 | 100% | Transportation and warehouse storage management service |
| **30** | Fujian Shengfeng Logistics Co., Ltd. | Fujian, the PRC | April 2, 2020 | 100% | Transportation and warehouse storage management service |
| **31** | Fujian Dafengche Information Technology Co. Ltd. | Fujian, the PRC | August 26, 2020 | 100% | Software engineering |
| **32** | Ningde Shengfeng Logistics Co. Ltd. | Fujian, the PRC | November 12, 2018 | 51% | Transportation and warehouse storage management service |
| **33** | Shengfeng Logistics (Zhejiang) Co., Ltd. | Zhejiang, the PRC | February 1, 2021 | 100% | Transportation and warehouse storage management service |
| **34** | Chengdu Shengfeng Supply Chain Management Co., Ltd. | Chengdu, the PRC | October 12, 2021 | 100% | Supply chain management service |
| **35** | Shengfeng Logistics Group (Ningde) Supply Chain Management Co., Ltd. | Fujian, the PRC | September 23, 2022 | 100% | Supply chain management service |
| **36** | Anhui Shengfeng Supply Chain Management Co., Ltd. | Anhui, the PRC | November 29, 2023 | 100% | Transportation and warehouse storage management service |
| **37** | Shenzhen Tianyu Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | May 19, 2023 | 100% | Transportation and supply chain management service |
| **38** | Ningbo Shengfeng Supply Chain Co., Ltd. | Zhejiang, the PRC | April 16, 2024 | 100% | Transportation and warehouse storage management service |
| **39** | Qingdao Shengfeng Supply Chain Co., Ltd. | Shandong, the PRC | April 22, 2024 | 100% | Transportation and warehouse storage management service |
| **40** | Zhongshan Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | May 15, 2024 | 100% | Transportation and warehouse storage management service |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct <br> or indirect** | **Principal activities** |
| **41** | Hunan Shengfeng Supply Chain Management Co., Ltd. | Hunan, the PRC | May 23, 2024 | 100% | Transportation and warehouse storage management service |
| **42** | Jiangxi Shengfeng Supply Chain Management Co., Ltd. | Jiangxi, the PRC | May 24, 2024 | 100% | Transportation and warehouse storage management service |
| **43** | Dongguan Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | July 7, 2024 | 100% | Transportation and warehouse storage management service |
| **44** | Langfang Shengfeng Logistics Co., Ltd. | Hebei, the PRC | August 27, 2024 | 100% | Transportation and warehouse storage management service |
| **45** | Liaoning Tianyu Changsheng Supply Chain Management Co., Ltd. | Liaoning, the PRC | October 16, 2024 | 66% | Transportation and warehouse storage management service |
| **46** | Chongqing Tianyu Shengfeng Supply Chain Management Co., Ltd. | Chongqing, the PRC | October 21, 2024 | 100% | Transportation and supply chain management service |
| **47** | Fujian Shengfeng Fulai Low Altitude Comprehensive Service Co., Ltd. | Fujian, the PRC | November 7, 2024 | 51% | Transportation and cargo packaging service |
| **48** | Fujian Shengfeng Zhuoyue Shipping Engineering Technology Co., Ltd. | Fujian, the PRC | December 9, 2024 | 51% | Technical services and development |
| **49** | Zhangzhou Shengfeng Logistics Co., Ltd. | Fujian, the PRC | May 14, 2025 | 100% | Transportation and warehouse storage management service |
| **50** | Luoyang Shengfeng Supply Chain Management Co., Ltd. | Luoyang, the PRC | August 1, 2025 | 100% | Transportation and warehouse storage management service |
| **51** | Heilongjiang Shengfeng Supply Chain Management Co., Ltd. | Heilongjiang, the PRC | September 26, 2025 | 100% | Transportation and warehouse storage management service |
|  | **Significant subsidiaries of Tianyu:** | **Significant subsidiaries of Tianyu:** | **Significant subsidiaries of Tianyu:** |  |  |
| **52** | Yichun Shengfeng Logistics Co., Ltd. | Jiangxi, the PRC | December 1, 2022 | 100% | Transportation and warehouse storage management service |
| **53** | Hubei Tianyu Shengfeng Logistics Co., Ltd. | Hubei, the PRC | November 14, 2023 | 100% | Transportation and supply chain management service |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)** 

<u>Contractual Agreements</u>

The Company conducts its operations through a series of agreements with the VIE and its subsidiaries as stated above. The VIE and its subsidiaries are utilized solely to facilitate the Company's participation in transportation and warehouse storage management services in the PRC where foreign ownership is restricted. As such, Shengfeng VIE is controlled through contractual arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements were made effective by a series of six agreements (collectively the "Contractual Arrangements", or the VIE Agreements, which were signed on January 7, 2021).

As a result of the direct ownership in Tianyu and the Contractual Arrangements, the Company is regarded as the primary beneficiary of the VIE and its subsidiaries. Therefore, the VIE and its subsidiaries were treated as the consolidated entities under U.S. GAAP.

The significant terms of the Contractual Arrangements are as follows:

*Equity Pledge Agreements* 

Each equity holder of the VIE has pledged all of his/her shares in the VIE and all other rights relevant to the shares to WFOE, as a collateral security for his/her and/or the VIE's obligations to pay off all debt to WFOE, including consulting and services fees payable to WFOE. In the event of default of any payment obligation, WFOE will be entitled to certain rights, including transferring the pledged shares to itself and disposing the pledged shares through a sale or auction.

The Equity Pledge Agreement is effective until the full payment of the service fees under the Technical Consultation and Service Agreement and upon termination of Shengfeng Logistics' obligations under the Technical Consultation and Service Agreement, or upon the transfer of shares of the Equity Shareholders.

The purposes of the Equity Pledge Agreement are to (1) guarantee the performance of Shengfeng Logistics' obligations under the Technical Consultation and Service Agreement, (2) make sure the Equity Shareholders do not transfer or assign the pledged shares, or create or allow any encumbrance that would prejudice Tianyu's interests without Tianyu's prior written consent, and (3) provide Tianyu control over Shengfeng Logistics under certain circumstances. In the event Shengfeng Logistics breaches its contractual obligations under the Technical Consultation and Service Agreement, Tianyu will be entitled to dispose of the pledged shares in accordance with relevant PRC laws.

As of the date of this annual report, the share pledges under the Equity Pledge Agreement have been registered with the competent PRC regulatory authority.

*Exclusive Technical Consultation and Service Agreements* 

The VIE has entered into an exclusive technical consultation and service agreement with WFOE, pursuant to which, WFOE is engaged to provide certain technical services to the VIE, depending on the licenses obtained and held by the VIE. This technical consultation and service agreement will remain effective for 20 years and it can be extended by WFOE unilaterally. WFOE is entitled to collect service fees for the services it provides to the VIE, and the service fees are adjusted annually through written agreements. Technical service fees are composed of the basic annual fee, which is equal to 50% of the after-tax income of the VIE, and a floating fee, which shall not exceed the after-tax income after deducting paid basic annual fees. Due to its control over the VIE, WFOE has the right to determine the service fees to be charged to the VIE by considering, among others, the technical complexity of the services, the actual costs that may be incurred for providing the services and the VIE's revenue.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)** 

<u>Contractual Agreements</u> (continued)

The Technical Consultation and Service Agreement became effective on January 7, 2021 and will remain effective for 20 years. Such agreement can be extended if Tianyu provides its notice of extension to Shengfeng Logistics unilaterally prior to the expiration date of this agreement. Shengfeng Logistics shall use its best efforts to renew its business license and extend its operation term until and unless otherwise instructed by Tianyu.

The Technical Consultation and Service Agreement does not prohibit related party transactions. The Company's audit committee is required to review and approve in advance any related party transactions, including transactions involving Tianyu or Shengfeng Logistics.

*Exclusive Call Option Agreements* 

The equity shareholders of the VIE (the "Equity Shareholders") have granted WFOE the exclusive and irrevocable right to purchase or to designate one or more person(s) at their discretion to purchase part or all of the equity interests in the VIE from the Equity Shareholders for a purchase price at any time, subject to the lowest price permitted by PRC laws and regulations. The VIE and its Equity Shareholders have agreed that without prior written consent of WFOE, the respective Equity Shareholders cannot sell, transfer, pledge or dispose their equity interests, and the VIE cannot sell, transfer, pledge or dispose, including but not limited to, the equity interests, significant assets, significant revenue and significant business. Also as agreed, the VIE cannot declare any dividend or change capitalization structure of the VIE and cannot enter into any loan or investment agreements without prior written consent of WFOE. Furthermore, the Equity Shareholders of the VIE have agreed that any proceeds from, including but not limited to, the sales of the Equity Shareholders' equity interests in the VIE should be gratuitously paid to WFOE or one or more person(s) at their discretion. The Call Option Agreement will remain effective until all equity options in VIE held by such Equity Shareholders are transferred or assigned to WFOE or their designated representatives.

The Call Option Agreement remains effective until all the equity of Shengfeng Logistics is legally transferred under the name of Tianyu and/or other entity or individual designated by it.

*Voting Rights Proxy Agreement*

 

Pursuant to the irrevocable power of attorney, each of the Equity Shareholders of the VIE appointed WFOE as his or her attorney-in-fact to exercise such shareholder's rights under PRC law and the relevant articles of association, including but not limited to, attending shareholders meetings, voting on their behalf on all matters requiring shareholders' approval, including but not limited to, sale, transfer, pledge, or disposition of all or part of the Equity Shareholders' equity interests, and designating and appointing the legal representative, directors, supervisors, chief executive officer and other senior management members of the VIE. Each power of attorney will remain in force until such Equity Shareholder ceases to be a shareholder of the VIE. Each shareholder has waived all his or her rights in connection with his or her equity interests, and confirmed that such rights have been authorized to WFOE under each power of attorney.

The Voting Rights Proxy Agreement became effective on January 7, 2021 and will remain effective for 20 years. Such agreement can be extended if Tianyu provides its notice of extension unilaterally prior to the expiration date of this agreement. All other parties shall agree with such extension without reserve.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **ORGANIZATION AND NATURE OF OPERATIONS (CONTINUED)** 

<u>Contractual Agreements</u> (continued)

*Power of attorney*

Each of the Equity Shareholders has signed a power of attorney (the "Power of Attorney"), pursuant to which, each of the Equity Shareholders has authorized WFOE to act as his or her exclusive agent and attorney with respect to all rights of such individual as a shareholder of the VIE, including but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights that shareholders are entitled to under PRC laws and the Articles of Association of the VIE, including but not limited to, sale, transfer, pledge and disposition of the equity interests of the VIE; and (c) designating and appointing the legal representative, chairperson, directors, supervisors, chief executive officer and other senior management members of the VIE. The Power of Attorney has the same term as the Voting Rights Proxy Agreement.

The Powers of Attorney is irrevocable and continuously valid from the date of execution of the Powers of Attorney, so long as the Equity Shareholders are shareholders of Shengfeng Logistics.

*Spousal consent letter*

Each of the respective spouses of the individual Equity Shareholders has executed an additional spousal consent letter which contains terms as described below. Pursuant to the spousal consent letters, each of the respective spouse of the individual Equity Shareholders, unconditionally and irrevocably agreed that the equity interests in the VIE held by and registered in the name of his/her spouse will be disposed of pursuant to the equity pledge agreement, the exclusive call option agreement and the shareholders' voting rights proxy agreement. The spouse agreed not to assert any rights over the equity interests in the VIE held by his/her spouse.

Based on the foregoing Contractual Arrangements, which grant Shengfeng WFOE the effective control of Shengfeng VIE and enable Shengfeng WFOE to receive all of their expected residual returns, the Company accounts for Shengfeng VIE as a VIE. Accordingly, the Company consolidates the accounts of Shengfeng VIE for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission ("SEC"), and Accounting Standards Codification ("ASC") 810-10, Consolidation.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

<u>Basis of presentation</u>

The accompanying audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for information pursuant to the rules and regulations of the SEC.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Principles of Consolidation</u>

The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE and the VIE's subsidiaries over which the Company exercises control and, where applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All significant transactions and balances between the Company, its subsidiaries, the VIE and the VIE's subsidiaries have been eliminated upon consolidation.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.

A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.

Non-controlling interest represents the portion of the net assets of subsidiaries attributable to interests that are not owned or controlled by the Company. The non-controlling interest is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest's operating results are presented on the face of the consolidated statements of income and comprehensive income as an allocation of the total income for the year between non-controlling shareholders and the shareholders of the Company.

All significant transactions and balances between the Company, its subsidiaries, the VIE and the VIE's subsidiaries have been eliminated upon consolidation.

<u>Use of Estimate and Assumptions</u>

 ****

The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods presented. Estimates are adjusted to reflect actual experience when necessary. Actual results could differ from these estimates.

<u>Variable Interest Entities</u>

 ****

The Company applies the guidance codified in Accounting Standard Codification 810, Consolidations ("ASC 810") on accounting for the VIE and its respective subsidiaries, which requires certain variable interest entities to be consolidated by the primary beneficiary of the entity in which it has a controlling financial interest. A VIE is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional financial support; (b) as a group, the holders of the equity investment at risk lack the ability to make certain decisions, the obligation to absorb expected losses or the right to receive expected residual returns, or (c) an equity investor has voting rights that are disproportionate to its economic interest and substantially all of the entity's activities are on behalf of the investor. The accompanying consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIE.

The Company is considered the primary beneficiary of a VIE or its subsidiaries if the Company had variable interests, that will absorb the entity's expected losses, receive the entity's expected residual returns, or both.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Variable Interest Entities</u> (continued)

The Company's total assets and liabilities presented in the accompanying consolidated financial statements represent substantially all of the total assets and liabilities of the VIE because the other entities in the consolidation are non-operating holding entities with nominal assets and liabilities. The following financial statement amounts and balances of the VIE were included in the accompanying audited consolidated financial statements for the years ended December 31, 2025, 2024 and 2023, respectively:

---

| | | |
|:---|:---|:---|
|  | **As of <br> December 31,<br> 2025** | **As of <br> December 31, <br> 2024** |
| **Assets** | | |
| **Current Assets:** | | |
| &nbsp;&nbsp;&nbsp;**Cash and cash equivalents** | $33692 | $34318 |
| &nbsp;&nbsp;&nbsp;**Restricted cash** | 3278 | 5545 |
| &nbsp;&nbsp;&nbsp;**Notes receivable** | 7414 | 7309 |
| &nbsp;&nbsp;&nbsp;**Accounts receivable, net** | 135941 | 126467 |
| &nbsp;&nbsp;&nbsp;**Due from related parties** | 11686 | 662 |
| &nbsp;&nbsp;&nbsp;**Prepayments and other current assets, net** | 20808 | 28912 |
| **Total Current Assets** | 212819 | 203213 |
| &nbsp;&nbsp;&nbsp;**Property and equipment, net** | 68491 | 57827 |
| &nbsp;&nbsp;&nbsp;**Intangible assets, net** | 11213 | 11413 |
| &nbsp;&nbsp;&nbsp;**Operating lease right-of-use assets, net** | 5638 | 9827 |
| &nbsp;&nbsp;&nbsp;**Long-term investments** | 8852 | 1900 |
| &nbsp;&nbsp;&nbsp;**Deposits for investment** | 9177 | 10573 |
| &nbsp;&nbsp;&nbsp;**Deferred tax assets** | 1301 | 1396 |
| &nbsp;&nbsp;&nbsp;**Other non-current assets** | 23984 | 9623 |
| **Total Assets** | $341475 | $305772 |
| **Liabilities and Equity** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;**Notes payable** | $9248 | $14907 |
| &nbsp;&nbsp;&nbsp;**Accounts payable** | 92916 | 91936 |
| &nbsp;&nbsp;&nbsp;**Short-term bank loans** | 44652 | 39401 |
| &nbsp;&nbsp;&nbsp;**Long-term bank loans, current** | 2769 | - |
| &nbsp;&nbsp;&nbsp;**Due to related parties** | 1720 | 1687 |
| &nbsp;&nbsp;&nbsp;**Salary and welfare payables** | 5507 | 3017 |
| &nbsp;&nbsp;&nbsp;**Accrued expenses and other current liabilities** | 9242 | 7508 |
| &nbsp;&nbsp;&nbsp;**Operating lease liabilities, current** | 2655 | 4218 |
| &nbsp;&nbsp;&nbsp;**Tax payables** | 4131 | 2994 |
| **Total Current Liabilities** | 172840 | 165668 |
| &nbsp;&nbsp;&nbsp;**Long-term bank loans** | 33832 | 16390 |
| &nbsp;&nbsp;&nbsp;**Operating lease liabilities, non-current** | 2094 | 4649 |
| &nbsp;&nbsp;&nbsp;**Deferred tax liabilities** | 247 | 49 |
| &nbsp;&nbsp;&nbsp;**Other non-current liabilities** | 1256 | 2838 |
| **Total Liabilities** | 210269 | 189594 |
| **Net assets** | $131206 | $116178 |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Variable Interest Entities</u> (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Total revenues** | $563780 | $498122 | $401825 |
| **Cost of revenues** | $(512057) | $(453365) | $(355662) |
| **Income from operations** | $16724 | $14450 | $14420 |
| **Net income** | $11984 | $10490 | $10828 |

---

<u>Foreign currencies translation and transaction</u>

 ****

The reporting currency of the Company is the U.S. dollar. The Company in mainland China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Monetary assets and liabilities are translated at the unified exchange rate as quoted by the People's Bank of China at the end of the period. The statement of income accounts is translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive loss amounted to $6,200 and $9,047 as of December 31, 2025 and 2024, respectively. The balance sheet amounts, with the exception of shareholders' equity, at December 31, 2025 and 2024 were translated at RMB7.0288 and RMB7.1884, respectively. The shareholders' equity accounts were stated at their historical rates. The average translation rates applied to the statements of income accounts for the years ended December 31, 2025, 2024 and 2023 were RMB7.1429, RMB7.1217 and RMB7.0467 to $1.00 respectively. Cash flows are also translated at average translation rates for the periods; therefore, amounts reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

<u>Cash and cash equivalents</u> ****

Cash and cash equivalents represent demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use, and which have original maturities of three months or less and are readily convertible to known amounts of cash. The Company maintains most of its bank accounts in the mainland of China. Cash balances in bank accounts in mainland China are insured by the People's Bank of China Financial Stability Department ("FSD") while there is a RMB500,000 deposit insurance limit for a legal entity's aggregated balance at each bank. As of December 31, 2025 and 2024, the Company had approximately $35.3 million and $34.7 million, respectively, of cash in banks, most held in the banks located in the mainland of China. Most of cash balance as of December 31, 2025 and 2024 are denominated in RMB.

<u>Restricted cash</u>

 ****

Restricted cash represents cash that cannot be withdrawn without the permission of third parties. The Company's restricted cash is substantially cash balance in designated bank accounts as security for payment processing lawsuit, bank acceptance notes payables, letters of credit and letters of guarantee. Restriction on the use of such cash and the interest earned thereon is imposed by the banks and remains effective throughout the term of the security period. Upon maturities of the security period, the bank's deposits are available for general use by the Company.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Fair value of financial instruments</u>

 ****

ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

● Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

● Level 3 — inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the fair value of the Company's financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, prepayments and other current assets, due from related parties, accounts payable, due to related parties, short-term bank loans, salary and welfare payables, accrued expenses and other current liabilities, current operating lease liabilities and taxes payable, approximates their recorded values due to their short-term maturities. The carrying value of long-term lease liabilities approximated its fair value as of December 31, 2025 and 2024 as the interest rates applied reflect the current market yield for comparable financial instruments.

<u>Notes receivable</u>

Notes receivable represents trade accounts receivable due from various customers where the customers' banks have guaranteed the payments. The notes are non-interest bearing and normally paid within three to twelve months. The Company has the ability to submit request for payment to the customer's bank earlier than the scheduled payment date but will incur an interest charge and a processing fee. As of December 31, 2025 and 2024, no notes were pledged for the Company's notes payable.

<u>Accounts receivable, net</u>

Accounts receivable are recognized in the period when the Company has provided services to its customers and when its right to consideration is unconditional. On January 1, 2023, the Company adopted ASU 2016-13, "Financial Instruments — Credit Losses (Accounting Standards Codification ("ASC" Topic 326): Measurement on Credit Losses on Financial Instruments", including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, "ASC 326"). ASC 326 introduces an approach based on expected losses to estimate the allowance for doubtful accounts, which replaces the previous incurred loss impairment model. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. The Company's estimation of allowance for credit losses considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. The Company evaluates its accounts receivable for expected credit losses on a regular basis. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. The Company considers factors in assessing the collectability of its receivables, such as the age of the amounts due, the customer's payment history, credit-worthiness and other specific circumstances related to the accounts. The Company adjusts the allowance percentage periodically when there are significant differences between estimated bad debts and actual bad debts. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Company also makes specific allowance in the period in which a loss is determined to be probable. Accounts receivable balances are written off after all collection efforts have been exhausted. The allowance for credit losses was approximately $2.9 million and $3.0 million as of December 31, 2025 and 2024, respectively.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Prepayments and other assets, net</u> ****

Prepayment and other assets primarily consist of VAT recoverable, advances to vendors for purchasing goods, long-lived assets or services that have not been received or provided, advances to employees, security deposits made to customers and advances to employees. Prepayment and other assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability and recoverability of the advance become doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. The allowance is also based on management's best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management's estimate of credit worthiness and the economic environment. The allowance for credit losses for prepayments and other assets were approximately $0.5 million and $0.6 million as of December 31, 2025 and 2024, respectively.

<u>Property and equipment, net</u>

 ****

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives, taking into account any estimated residual value.

---

| | |
|:---|:---|
|  | **Useful Life** |
| **Building** | 10-40 years |
| **Office equipment** | 5-10 years |
| **Machinery and tools** | 5 years |
| **Vehicles** | 5-7 years |
| **Leasehold improvements** | Lesser of the lease term or the <br> estimated useful lives of the assets |

---

The Company constructs certain of its property and equipment. In addition to costs under the construction contracts, external costs that are directly related to the construction and acquisition of such property and equipment are capitalized. Depreciation and amortization is recorded at the time assets are ready for their intended use. Such properties are classified to the appropriate categories of property and equipment when completed and ready for intended use. Depreciation and amortization of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income (loss). Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Intangible assets, net</u>

 ****

Intangible assets consist primarily of land use rights and licensed software acquired, which are stated at cost less accumulated amortization and impairment, if any. Intangible assets are amortized using the straight-line method over the estimated useful lives, which are generally 5 to 50 years or based on the contract terms. The estimated useful lives of amortized intangible assets are reassessed if circumstances occur that indicate the original estimated useful lives have changed.

The estimated useful lives are as follows:

---

| | |
|:---|:---|
|  | **Useful life** |
| **Land use right** | 32 - 50 years |
| **Licensed software** | 5 years |

---

<u>Impairment of long-lived assets</u>

 ****

The Company evaluates its long-lived assets, including property and equipment and intangibles with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Company evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. The adjusted carrying amount of the assets become new cost basis and are depreciated over the assets' remaining useful lives. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Given no events or changes in circumstances indicating the carrying amount of long-lived assets may not be recovered through the related future net cash flows, the Company did not recognize any impairment loss on long-lived assets for the years ended December 31, 2025, 2024 and 2023.

<u>Long-term investments</u>

Long-term investments are primarily consisted of equity investments in privately held entities accounted for using equity investments accounted for using the equity method. On January 1, 2019, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company started to record equity investments at fair value, with gains and losses recorded through net earnings. And the Company elected to measure certain equity investments without readily determinable fair value at cost, less impairments, plus or minus observable price changes and assess for impairment quarterly.

*Equity investments accounted for using the equity method*

The Company accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, using the equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly for investments in a privately held entity, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Notes payable</u>

Notes payable represents trade accounts payable due to various suppliers where the Company's banks have guaranteed the payment. The notes are non-interest bearing and normally paid within three to twelve months. The Company shall keep sufficient cash in designated bank accounts or notes receivable pledged to the bank as security for payment processing.

<u>Revenue recognition</u>

 ****

The Company adopted ASC Topic 606. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is the transaction price the Company expects to be entitled to in exchange for the promised services in a contract in the ordinary course of the Company's activities and is recorded net of value-added tax ("VAT"). To achieve that core principle, the Company applies the following steps:

Step 1: Identify the contract (s) with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

The Company generates revenues from providing transportation services and warehouse storage management services. No practical expedients were used when adopting ASC 606. Revenue recognition policies for each type of revenue stream are as follows:

*Transportation services*

 

The Company derives its transportation service revenue by providing logistic services based on customers' orders. The Transportation service is considered a performance obligation as the customer can only obtain benefits when the goods are delivered to the destination. The transaction price is predetermined according to the distance of the transportation as well as the volume of the goods. Generally, the credit term is within two months. There is no other obligation in our contracts, such as return, refund or warranties. Revenue is recognized at the point in time when delivery of goods is made and the customer has accepted delivery.

 

*Warehouse storage management services*

 

The Company derives revenue from the warehouse storage management service provided to third-party companies, including handling services, security and other services. Generally, the Company's contracts provide the customer an integrated service. The transaction price is based on the fixed price or determinable amount specified in the contract with the customer. For these contracts, the Company does not consider the services to be distinct within the context of the contract when the separate scopes of work combine into a single commercial objective or capability for the customer. Accordingly, the Company generally identifies one performance obligation in its contracts, which is a series of distinct services that remain substantially the same over time and possess the same pattern of transfer. Revenue is recognized based on the Company's right to invoice using the series guidance over the period in which services are provided and invoicing is representative of the value of service being delivered.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Revenue recognition</u> <u>(continued)</u>

*Principal and Agent Considerations*

In the Company's transportation business, the Company utilizes independent contractors and third-party carriers in the performances of some transportation services as and when needed. GAAP requires us to evaluate, using a control model, whether the Company itself promises to provide services to the customers (as a principal) or to arrange for services to be provided by another party (as an agent). The Company has the primary obligation to fulfill the performance obligations and controls the services. The Company also bears the risk of payment to another party carriers and establishes the contract price directly with its customers based on the services requested in the statement of work. Based on the Company's evaluation using a control model, the Company determined that in all of its major business activities, it serves as a principal rather than an agent within their revenue arrangements. Revenue and the associated purchased transportation costs are both reported on a gross basis within the consolidated statements of income and comprehensive income.

*Contract liabilities*

 

A contract liability is recognized when a payment is received or a payment is due (whichever is earlier) from a customer before the Company transfers the related services. Contract liabilities are recognized as revenue when the Company performs under the contract. Revenue recognized that was included in contract liabilities at the beginning of the year was approximately $1.0 million, $0.8 million and $0.8 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, contract liabilities amounted to approximately $1.4 million and $1.6 million, respectively, were included in "accrued expenses and other current liabilities."

Disaggregated information of revenues by services:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Revenues:** |  |  |  |
| **Transportation** | $554761 | $484754 | $383211 |
| **Warehouse storage management service** | 14258 | 16432 | 18160 |
| **Others** | 3459 | 2972 | 2750 |
| **Total revenues** | $**572478** | $**504158** | $**404121** |

---

Disaggregated information of revenues by the timing of transfer of services:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Revenue recognized at a point in time (transportation services)** | $554761 | $484754 | $383211 |
| **Revenue recognized over time (warehouse storage management services and others revenues)** | 17717 | 19404 | 20910 |
| **Total revenues** | $**572478** | $**504158** | $**404121** |

---

As of December 31, 2025 and 2024, the Company had outstanding contracts for providing transportation, warehouse storage management services and others amounting to approximately $0.4 million and $0.5 million, all of which is expected to be completed within 12 months from December 31, 2025 and 2024, respectively.

The Company's operations are primarily based in the PRC, where the Company derived a substantial portion of revenues. Disaggregated information of revenues by geographic locations are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31** | **Years Ended December 31** | **Years Ended December 31** |
|  | **2025** | **2024** | **2023** |
| Fujian | $434998 | $362620 | $267393 |
| Beijing | 27707 | 30721 | 29110 |
| Liaoning | 19150 | 9106 | 8817 |
| Zhejiang | 15068 | 18297 | 15448 |
| Guangdong | 11619 | 14343 | 14130 |
| Others | 63936 | 69071 | 69223 |
| **Total** | $**572478** | $**504158** | $**404121** |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Government Subsidies</u>

The Company's PRC based subsidiaries received government subsidies from certain local governments. The Company's government subsidies consisted of specific subsidies and other subsidies. Specific subsidies are subsidies that the local government has provided for a specific purpose, such as truck station subsidies. Other subsidies are the subsidies that the local government has not specified its purpose for and are not tied to future trends or performance of the Company; receipt of such subsidy income is not contingent upon any further actions or performance of the Company and the amounts do not have to be refunded under any circumstances. The Company recorded specific subsidies as accrued expenses and other current liabilities when received. For specific subsidies, they are recognized as other income on a straight-line method within the useful life of relevant assets. Other subsidies are recognized as other income which is included in the consolidated statements of income upon receipt as further performance by the Company is not required. The government subsidies were approximately $0.2 million, $0.2 million and $0.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

<u>Advertising expenses</u>

 ****

Advertising expenditures are expensed as incurred and such expenses were included as part of selling and marketing expenses. For the years ended December 31, 2025, 2024 and 2023, the advertising expenses amounted to approximately $0.1 million, $0.1 million and $0.1 million, respectively.

<u>Employee defined contribution plan</u>

Full-time employees of the Company in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to them. Chinese labor regulations require that the Company make contributions to the government for these benefits based on government prescribed percentage of the employee's salaries. The Company has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred. For the years ended December 31, 2025, 2024 and 2023, employee welfare contribution expenses amounted to approximately $3.0 million, $2.3 million and $2.5 million, respectively.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Leases</u>

 ****

The Company has elected the package of practical expedients permitted which allows the Company not to reassess the following at the adoption date: (i) whether any expired or existing contracts are or contains a lease, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases (i.e. whether those costs qualify for capitalization under ASU 2016-02). The Company also elected the short-term lease exemption for certain classes of underlying assets including office space, warehouses and equipment, with a lease term of 12 months or less.

The Company determines whether an arrangement is or contains a lease at inception. A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. Operating leases are included in operating lease right-of-use ("ROU") assets, operating lease liability, current, and operating lease liability, non-current in the Company's consolidated balance sheets. Please refer to Note 13 for the disclosures regarding the Company's method of adoption of ASC 842 and the impacts of adoption on its financial position, results of operations and cash flows.

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The operating lease ROU assets and lease liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The operating lease ROU assets also includes any lease payments made and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease. Renewal options are considered within the ROU assets and lease liabilities when it is reasonably certain that the Company will exercise that option. Lease expenses for lease payments are recognized on a straight-line basis over the lease term.

For operating leases with a term of one year or less, the Company has elected not to recognize a lease liability or ROU asset on its consolidated balance sheet. Instead, it recognizes the lease payments as expenses on a straight-line basis over the lease term. Short-term lease costs are immaterial to its consolidated statements of income and cash flows. The Company has operating lease agreements with insignificant non-lease components and have elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Value added tax ("VAT")</u>

 ****

Revenue represents the invoiced value of goods and service, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of products sold or services provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company's subsidiaries in PRC remain subject to examination by the tax authorities for five years from the date of filing.

<u>Income taxes</u>

 ****

The Company follows the liability method of accounting for income taxes in accordance with ASC 740 ("ASC 740"), Income Taxes. The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the years ended December 31, 2025, 2024 and 2023. According to the PRC Tax Administration and Collection Law, the statute of limitation is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitation is extended to five years under special circumstances where the underpayment of taxes is more than RMB100. In the case of transfer pricing issues, the statute of limitation is 10 years.

<u>Statutory reserves</u>

 ****

The Company's PRC subsidiaries and the VIE are required to allocate at least 10% of their after-tax profit to the general reserve in accordance with the PRC accounting standards and regulations. The allocation to the general reserve will cease if such reserve has reached to 50% of the registered capital of respective company. Appropriations to discretionary surplus reserve are at the discretion of the board of directors of the VIE. These reserves can only be used for specific purposes and are not transferable to the Company in form of loans, advances, or cash dividends. There is no such regulation of providing statutory reserve in Hong Kong.

<u>Comprehensive income</u>

 ****

Comprehensive income consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Earnings per share</u>

 ****

The Company computes earnings per share ("EPS") in accordance with ASC 260, "Earnings per Share." ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

The rights, including the liquidation and dividend rights, of the holders of the Company's Class A and Class B Ordinary Shares are identical, except with respect to voting and conversion rights. Each Class A Ordinary Share is entitled to one vote; and each Class B Ordinary Share is entitled to ten votes and is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. For the years ended December 31, 2025, 2024 and 2023, the net earnings per share amounts are the same for Class A and Class B Ordinary Shares because the holders of each class are entitled to equal per share dividends or distributions in liquidation.

<u>Risks and Concentration</u>

&nbsp;&nbsp;&nbsp;&nbsp;a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's interest rate risk arises primarily from bank loans. Bank loans issued at variable rates and fixed rates expose the Company to cash flow interest rate risk and fair value interest rate risk respectively.

&nbsp;&nbsp;&nbsp;&nbsp;b) Concentration of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of December 31, 2025 and 2024, approximately $38.6 million and $40.2 million were deposited with financial institutions located in the PRC, respectively, where there is a RMB500,000 deposit insurance limit for a legal entity's aggregated balance at each bank. As a result, the amounts not covered by deposit insurance were approximately $35.8 million and $37.7 million as of December 31, 2025 and 2024, respectively.

The Company is also exposed to risk from its accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.

A majority of the Company's expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at the exchange rates set by the People's Bank of China ("PBOC"). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to process the remittance.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Risks and Concentration</u> <u>(continued)</u>

Shengfeng WFOE and its subsidiaries, Shengfeng VIE and its subsidiaries (collectively "Shengfeng PRC entities"), the functional currency is the RMB, and the Company's consolidated financial statements are presented in U.S. dollars. The RMB appreciated by 2.22% in the year ended December 31, 2025 and depreciated by 1.49% in the year ended December 31, 2024. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect its financial results reported in the U.S. dollar terms without giving effect to any underlying changes in its business or results of operations. Currently, the Company's assets, liabilities, revenues and costs are denominated in RMB.

To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;c) Concentration of customers and suppliers

Substantially all revenue was derived from customers located in China. There are no customers from whom revenue individually represented greater than 10% of the total revenue of the Company in any of the periods presented.

For the year ended December 31, 2025, Hubei LuGe Logistics Co., Ltd. contributed approximately 18.4% of total cost of revenues of the Company and Zhongbao Zhiyun (Huadian) Logistics Technology Co., Ltd. contributed approximately 18.1% of total cost of revenues of the Company.

For the year ended December 31, 2024, Hubei LuGe Logistics Co., Ltd. contributed approximately 22.0% of total cost of revenues of the Company and Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 12.3% of total cost of revenues of the Company.

For the year ended December 31, 2023, Fujian Jinwang Yuntong Logistics Technology Co., Ltd. contributed approximately 32.7% of total cost of revenues of the Company.

As of December 31, 2025 and 2024, no customers accounted more than 10% of the account receivables.

As of December 31, 2025, Zhongbao Zhiyun (Huadian) Logistics Technology Co., Ltd. contributed approximately 10.1% of total account payable balances. As of December 31, 2024, Hubei LuGe Logistics Co., Ltd. contributed approximately 10.9% of total account payable balances and Jilin Baoqi Smart Logistics Industry Center Co., Ltd. contributed approximately 10.8% of total account payable balances.

&nbsp;&nbsp;&nbsp;&nbsp;d) The VIE risk

Under the Contractual Agreements with the consolidated the VIE, the Company has the power to direct activities of the consolidated the VIE and the VIE's subsidiaries through the Company's PRC subsidiary, and can have assets transferred freely out of the consolidated the VIE and the VIE's subsidiaries without restrictions. Therefore, the Company considers that there is no asset of the consolidated the VIE that can only be used to settle obligations of the respective consolidated the VIE, except for the registered capital of the consolidated the VIE amounting to approximately $27.2 million as of December 31, 2025 and 2024. Since the consolidated the VIE and the VIE's subsidiaries are incorporated as limited liability companies under the PRC Law, creditors of the consolidated the VIE and the VIE's subsidiaries do not have recourse to the general credit of the Company.

The Company believes that the Company's PRC subsidiary's Contractual Arrangements with the consolidated the VIE and the Equity Shareholders are in compliance with PRC laws and regulations, as applicable, and are legally binding and enforceable. However, uncertainties in the PRC legal system could limit the Company's ability to enforce these Contractual Arrangements.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Risks and Concentration</u> <u>(continued)</u>

In addition, if the current structure or any of the Contractual Arrangements were found to be in violation of any existing or future PRC law, the Company may be subject to penalties, which may include, but not limited to, cancellation or revocation of the Company's business and operating licenses and being required to restructure the Company's operations or terminate the Company's operating activities. The imposition of any of these or other penalties may result in a material and adverse effect on the Company's ability to conduct its operations. In such case, the Company may not be able to operate or control the VIE, which may result in deconsolidation of the VIE.

<u>Contingencies</u>

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company's management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company's consolidated financial position, results of operations and cash flows.

<u>Related parties</u>

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence, such as a family member or relative, shareholder, or a related corporation.

<u>Segment reporting</u>

 ****

ASC 280, "Segment Reporting", establishes standards for reporting information about operating segments on a basis consistent with the Group's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Group's business segments. The Company's long-lived assets are all located in the PRC and substantially all of the Company's revenues are derived from the PRC. Therefore, no geographical segments are presented. The Group uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group's the chief operating decision maker (CODM) for making operating decisions and assessing performance as the source for determining the Group's reportable segments. The Company's chief operating decision-maker ("CODM") has been identified as its Chief Executive Officer. The Company's CODM relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one reportable segment as defined by ASC 280. The single reportable segment contains Transportation, Warehouse storage management service and Others. The Company has concluded that consolidated net income is the measure of segment profitability. The Company does not distinguish between markets or segments for the purpose of internal reporting. Within the information provided, the CODM specifically reviews employee compensation and benefits expenses, which are a significant segment expense, as this represents significant cost affecting the Company's decision on how to allocate resources. Other operating expenses are reviewed in aggregate.

The following tables present summary information by segment for the years ended December 31, 2025, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| Revenues | $572478 | $504158 | $404121 |
| Cost of revenues | (519390) | (457874) | (357615) |
| Gross profit | 53088 | 46284 | 46506 |
| Employee compensation and benefits expenses | (25245) | (20697) | (22540) |
| Other operating expenses | (10963) | (10921) | (10060) |
| Income from operations | 16880 | 14666 | 13906 |
| Other income (expense) | (2624) | (2173) | (1278) |
| Income before income taxes | 14256 | 12493 | 12628 |
| Provision for income taxes | (2047) | (1666) | (2320) |
| Net income | $12209 | $10827 | $10308 |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** 

<u>Recent Accounting Pronouncements</u>

The Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the "JOBS Act"), the Company meets the definition of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. This ASU aligns the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is in the process of evaluating the impact of the new guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments allow investors to better assess, in their capital allocation decisions, how an entity's worldwide operations and related tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows. The other amendments in this Update improve the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is in the process of evaluating the impact of the new guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is in the process of evaluating the impact of the new guidance on its consolidated financial statements.

In July 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses, and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue Recognition. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Company's annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Company is in the process of evaluating the impact of the new guidance on its consolidated financial statements.

ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. In September 2025, the FASB issued this ASU to modernize the accounting for internal-use software costs, primarily by simplifying the requirements to capitalize software development costs. This update is effective beginning with the Company's 2028 fiscal year annual reporting period, with early adoption permitted. The Company is in the process of evaluating the impact of the new guidance on its consolidated financial statements.

ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. In December 2025, the FASB issued this ASU to establish authoritative guidance on the accounting for government grants received by business entities. This update is effective beginning with the Company's 2029 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.

Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated balance sheets, consolidated statements of income and comprehensive income, changes in equity and cash flows

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **ACCOUNTS RECEIVABLE, NET** 

Accounts receivable, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Accounts receivable** | $139125 | $130345 |
| **Less: Allowance for credit losses for accounts receivable** | (2861) | (3045) |
| **Total** | $136264 | $127300 |

---

Movement of allowance of credit losses for accounts receivable

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2014** | **2013** |
| **Beginning balance** | $3045 | $3269 | $3115 |
| &nbsp;&nbsp;&nbsp;**(Recovery of) provision for credit losses** | (69) | (61) | 608 |
| &nbsp;&nbsp;&nbsp;**Written-off** | (180) | (117) | (401) |
| &nbsp;&nbsp;&nbsp;**Foreign currency translation adjustments** | 65 | (46) | (53) |
| **Ending balance** | $2861 | $3045 | $3269 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **PREPAYMENTS AND OTHER ASSETS, NET** 

The prepayments and other assets, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31, <br> 2025** | **As of<br> December 31,<br> 2024** |
| **Deposits (a)** | $12590 | $14510 |
| **Prepayments for goods and services** | 4362 | 3390 |
| **VAT recoverable (b)** | 6935 | 5600 |
| **Prepayments and other receivables for property and equipment (c)** | 4782 | 5232 |
| **Loan receivable (d)** | 17371 | 9738 |
| **Disposal consideration (d)** | - | 696 |
| **Advances to employees** | 69 | 81 |
| **Others** | 581 | 696 |
| **Prepayments and other assets** | 46690 | 39943 |
| **Less: Allowance for credit losses for prepayments and other assets** | (517) | (573) |
| **Prepayments and other assets, net** | 46173 | 39370 |
| **Less: Prepayments and other current assets, net** | (22189) | (29684) |
| **Other non-current assets** | $23984 | $9686 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Deposits represent the refundable deposits to the lessors for the leased warehouses and office space.

(b) VAT recoverable represents the balances that the Company can utilize to deduct its value-added tax liabilities within the next 12 months.

(c) Prepayments and other receivables for property and equipment represent mainly prepayments and other receivables for constructions of logistic stations.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **PREPAYMENTS AND OTHER ASSETS, NET (CONTINUED)** 

(d) (i) On June 19, 2024, Shengfeng Supply Chain Management Co., Ltd. completed the transaction to sell 49% equity interest of Fujian Pingtan Tianyu Shengfeng Technology Co., Ltd. ("Pingtan SF") and Pingtan SF's subsidiary (Fujian Shengfeng Smart Technology Co., Ltd. ("SF Smart")) to a third party for a consideration of approximately $7.0 million (RMB49.0 million). Shengfeng Supply Chain Management Co., Ltd. received approximately $6.3 million (RMB44.0 million) on December 31, 2024. In addition, according to the agreement, Pingtan SF and Pingtan SF's subsidiary (SF Smart) shall repay borrowing of approximately $7.0 million (RMB49.0 million) to the Company before July 30, 2024. the Company have received repayment of approximately $2.8 million (RMB20.0 million) before July 25, 2025. On July 25, 2025, Shengfeng Supply Chain Management Co., Ltd. and the third party signed an annulment agreement, pursuant to which, the above equity transaction shall be annulled and Shengfeng Supply Chain Management Co., Ltd. agreed to loan approximately $7.0 million (RMB49.0 million) to SF Smart. As a result, Shengfeng Supply Chain Management Co., Ltd. shall refund above-mentioned consideration to this third party and the third party shall transfer the 49% equity interest of Pingtan SF back to Shengfeng Supply Chain Management Co., Ltd. As of August 15, 2025, Shengfeng Supply Chain Management Co., Ltd. had refunded above-mentioned consideration of approximately $6.3 million (RMB44.0 million) to this third party and loaned approximately $2.8 million (RMB20.0 million) to SF Smart. The third party has transferred 49% equity interest of Pingtan SF back to Shengfeng Supply Chain Management Co., Ltd. (ii) On June 11, 2024, for the purpose of acquiring a land use right to expand the Company's logistic business, the Company signed Memorandum of Understanding of Share Purchase Agreement ("2024 MOU") with two shareholders of Hubei Xingqidian Supply Chain Management Co., Ltd. ("Xingqidian", formerly named Hubei Tongzhou Information Harbor Co., Ltd.) to acquire 100% equity interest of Xingqidian, which owns land use right and constructed certain office and warehouse on such land use right. As of December 31, 2025, the Company made a loan of approximately $17.3 million (RMB121.5 million) to Xingqidian to secure the transaction and provide working capital for its further development. The loan with interest at an annual rate of 2.6%, and payable quarterly starting August 1, 2025. As of the date of this report, the share purchase transaction is not completed yet.

Movement of allowance for credit losses for prepayments and other assets

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Beginning balance** | $573 | $405 | $454 |
| &nbsp;&nbsp;&nbsp;**Provisions for (recovery of) credit losses for prepayments and other assets** | 100 | 176 | (42) |
| &nbsp;&nbsp;&nbsp;**Written-off** | (168) | - | - |
| &nbsp;&nbsp;&nbsp;**Foreign currency translation adjustments** | 12 | (8) | (7) |
| **Ending balance** | $517 | $573 | $405 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **PROPERTY AND EQUIPMENT, NET** 

Property and equipment, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Buildings** | $47491 | $25838 |
| **Office equipment** | 3102 | 2887 |
| **Machinery and tools** | 1419 | 1562 |
| **Vehicles** | 32061 | 31007 |
| **Leasehold improvements** | 6281 | 5776 |
| **Constructions in progress** | 20700 | 28479 |
| **Subtotal** | 111054 | 95549 |
| **Less: accumulated depreciation and amortization** | (40960) | (35581) |
| **Property and equipment, net** | $70094 | $59968 |

---

As of December 31, 2025 and 2024, property and equipment with net book value amounted to approximately $33.0 million and $16.3 million, respectively, were pledged for obtaining various loans (See Note 10 Notes payables and Note 11 Bank loans).

Depreciation and amortization expenses for the years ended December 31, 2025, 2024 and 2023, amounted to approximately $6.4 million, $6.4 million and $6.4 million, respectively. For the years ended December 31, 2025, 2024 and 2023, depreciation and amortization included in the cost of revenue were approximately $5.7 million, $5.7 million and $5.7 million, respectively. For the years ended December 31, 2025, 2024 and 2023, depreciation and amortization included in operating expenses were approximately $0.8 million, $0.7 million and $0.7 million, respectively.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **INTANGIBLE ASSETS, NET** 

The Company's intangible assets with definite useful lives primarily consisted of land use rights and licensed software. The following table summarizes the components of acquired intangible asset balances.

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Land use rights** | $14194 | $13878 |
| **Licensed software** | 2132 | 2086 |
| **Subtotal** | 16326 | 15964 |
| **Less: accumulated amortization** | (5113) | (4551) |
| **Intangible assets, net** | $11213 | $11413 |

---

As of December 31, 2025 and 2024, land use rights with net book value amounted to approximately $8.3 million and $8.3 million, respectively, were pledged for obtaining various of loans (See Note 10 Notes payables and Note 11 Bank loans).

Amortization expenses for the years ended December 31, 2025, 2024 and 2023, amounted to approximately $0.5 million, $0.7 million and $0.6 million, respectively.

The future amortization for the intangible assets is expected to be as follows:

---

| | |
|:---|:---|
| **Twelve months ending December 31,** | **Estimated<br> amortization<br> expense** |
| **2026** | $453 |
| **2027** | 411 |
| **2028** | 348 |
| **2029** | 346 |
| **2030** | 337 |
| **Thereafter** | 9318 |
| **Total** | $11213 |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**7.** **LONG-TERM INVESTMENTS** 

The Company's long-term investments consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31, <br> 2025** | **As of<br> December 31, <br> 2024** |
| Equity investments accounted for using the equity method | $8873 | $1900 |

---

For the years ended December 31, 2025, 2024 and 2023, the Company has the following equity investments which were accounted for using the equity method:

Movement of equity method investment

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Beginning balance** | $1900 | $1913 | $2040 |
| &nbsp;&nbsp;&nbsp;**Addition** | 6860 | - | - |
| &nbsp;&nbsp;&nbsp;**Share of income in equity method investees** | (41) | 15 | 19 |
| &nbsp;&nbsp;&nbsp;**Dividend received** | - | - | (114) |
| &nbsp;&nbsp;&nbsp;**Foreign currency translation adjustment** | 154 | (28) | (32) |
| **Ending balance** | $8873 | $1900 | $1913 |

---

(a) In 2007, the Company acquired 40% of the equity interests of
Fujian Bafang Shengfeng Logistics Co., Ltd ("Fujian Bafang") with a cash consideration of approximately $1.7 million (RMB12 million).
As the Company is able to exercise significant influence over Fujian Bafang after such acquisition, the Company therefore accounted for
this investment under the equity method of accounting.

(b) On June 19, 2024, Shengfeng Supply Chain Management Co., Ltd. completed
the transaction to sell 49% equity interest of Pingtan SF and Pingtan SF's subsidiary (SF Smart) to a third party for a consideration
of approximately $7.0 million (RMB49.0 million). On July 25, 2025, Shengfeng Supply Chain Management Co., Ltd. and the third party signed
an annulment agreement, pursuant to which, the above equity transaction was annulled. As a result, Shengfeng Supply Chain Management Co.,
Ltd. refunded above-mentioned consideration to this third party and the third party transferred the 49% equity interest of Pingtan SF
back to Shengfeng Supply Chain Management Co., Ltd. (See Note 4). As the Company is able to exercise significant influence over Pingtan
SF after this transaction, the Company therefore accounted for this investment under the equity method of accounting.

No impairment loss was recognized for the long-term investments for the years ended December 31, 2025, 2024 and 2023.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**8.** **Deposits for investment** 

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Fujian Yingfu Integrated Circuit Co., Ltd. (a)** | $- | $1600 |
| **Xingqidian (b)** | 9177 | 8973 |
| **Deposits for investment** | $9177 | $10573 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) The balance as of December 31, 2024 represented purchase deposit refundable from Fujian Yingfu Integrated Circuit Co., Ltd. The balance was fully collected on July 15, 2025.

(b) On June 11, 2024, for the
purpose of acquiring a land use right to expand the Company's logistic business, the Company signed 2024 MOU with two shareholders
of Xingqidian to acquire 100% equity interest of Xingqidian, which owns land use right and constructed certain office and warehouse on
such land use right. In accordance with 2024 MOU, the Company made prepayment of approximately $9.2 million (RMB64.5 million) by December
31, 2025 to secure the transaction. As of the date of this report, the share purchase transaction is not completed yet.

&nbsp;&nbsp;&nbsp;&nbsp;**9.** **RELATED PARTY TRANSACTIONS** 

The table below sets forth the major related parties and their relationships with the Company as of December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023:

---

| | |
|:---|:---|
| **Name of related parties** | &nbsp;&nbsp;&nbsp;**Relationship with the Company** |
| **Fujian Bafang Shengfeng Logistics Co., Ltd ("Fujian Bafang")** | An equity investee of the Company |
| **Fuzhou Tianyu Shengfeng Industrial Co., Ltd ("Fuzhou Tianyu")** | A company controlled by Yongxu Liu, CEO and Chairman of the Company |
| **Fuzhou Tianyu Shengfeng Property Management Co., Ltd ("Fuzhou Tianyu Management")** | A company under the control of a shareholder |
| **Fuzhou Tianyu Yuanmei Catering Co., Ltd ("Fuzhou Tianyu Catering")** | A company under the control of a shareholder |
| **Fujian Desheng Logistics Co., Ltd ("Fujian Desheng")** | A company under the control of a shareholder |
| **Yongxu Liu** | The Company's CEO and Chairman |
| **Xiying Yang** | CEO's spouse |
| **Yongteng Liu** | CEO's brother |
| **Fujian Yunlian Shengfeng Industry Co., Ltd., ("Fujian Yunlian")** | Shengfeng VIE's shareholder |
| **Fuzhou Puhui Technology Co., Ltd** | Non-controlling shareholder of Ningde Shengfeng Logistics Co. Ltd. |
| **Chongqing Changjiang River Moulding Material (Group) Co., Ltd. ("Chongqing Changjiang")** | Non-controlling shareholder of Liaoning Tianyu Changsheng Supply Chain Management Co., Ltd. |
| **Pingtan SF** | An equity method investee of the Company |
| **Mid-Castle Development Ltd. ("Mid-Castle")** | The Company's shareholder |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**9.** **RELATED PARTY TRANSACTIONS (CONTINUED)** 

&nbsp;&nbsp;&nbsp;&nbsp;*i)* *Significant transactions with related parties were as follows:* 

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Transportation services to Fujian Bafang** | $40 | $- | $- |
| **Transportation services to Fujian Desheng** | 28 | 157 | 37 |
| **Transportation services to Chongqing Changjiang and its subsidiaries** | 13307 | 575 | - |
| **Total** | $13375 | $732 | $37 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Transportation services from Fujian Bafang** | $2796 | $1799 | $1108 |
| **Lease services from Fuzhou Tianyu** | 274 | 227 | 228 |
| **Lease services from Fuzhou Tianyu Management** | 17 | 47 | 17 |
| **Catering services from Tianyu Catering** | - | 1 | 2 |
| **Total** | $3087 | $2074 | $1355 |

---

*ii)* *Guarantees*

The Company's shareholder, CEO and Chairman, Yongxu Liu, his spouse, Xiying Yang, his brother, Yongteng Liu, Fujian Yunlian and Fuzhou Puhui Technology Co., Ltd, were the guarantors of the Company's bank loans.

*iii)* *Significant balances with related parties were as follows:*

 

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| ***<u>Due from related parties</u>*** | | |
| **Fuzhou Tianyu** | $42 | $41 |
| **Fujian Desheng** | - | 39 |
| **Fujian Bafang** | 31 | - |
| **Pingtan SF (a)** | 6971 | - |
| **Mid-Castle** | 472 | - |
| **Chongqing Changjiang and its subsidiaries** | 4642 | 621 |
| **Total** | $12158 | $701 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) See Note 4

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| ***<u>Due to related parties</u>*** | | |
| **Fujian Bafang (a)** | $1699 | $1662 |
| **Fuzhou Tianyu** | 21 | 18 |
| **Yongteng Liu** | 110 | - |
| **Fuzhou Tianyu Management** | - | 7 |
| **Total** | $1830 | $1687 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) On December 10, 2007, the Company entered into an interest-free loan agreement with Fujian Bafang for a principal amount of approximately $1.4 million (RMB 9.6 million). Such loan is due on demand.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**10.** **NOTES PAYABLE** 

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31, <br> 2025** | **As of<br> December 31,<br> 2024** |
| **Bank acceptance notes payable issued by Industrial Bank Fuzhou Branch** | $- | $6955 |
| **Commercial acceptance notes payable guaranteed by China Postal Savings Bank Fuzhou Branch** | 6403 | 4196 |
| **Letters of Credit issued by Industrial Bank Fuzhou Branch (a)** | 2845 | 3756 |
| **Total** | $9248 | $14907 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) On September 16, 2025, Industrial Bank Fuzhou Branch issued letter of credits approximately $2.8 million (RMB20.0 million) to the Company with due date of September 16, 2026. The letter of credit were drawn down from Industrial Bank Fuzhou Branch's credit line.

The movement of notes payable is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Beginning balance** | $14907 | $8471 | $2046 |
| **Additions** | 9114 | 34003 | 8515 |
| **Repayments** | (15016) | (27381) | (2022) |
| **Exchange rate effect** | 243 | (186) | (68) |
| **Total** | $9248 | $14907 | $8471 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**11.** **BANK LOANS** 

The following table presents bank loans from commercial banks as of December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Bank of China Fuzhou Jin'an Branch** | $11382 | $11129 |
| **China Merchant Bank Fuzhou Branch** | 22337 | 10340 |
| **Xiamen International Bank Co., Ltd. Fuzhou Branch** | 8536 | 6956 |
| **Haixia Bank of Fujian Fuzhou Jin'an Branch** | 1138 | 1113 |
| **Fujian Fuzhou Rural Commercial Bank Co., Ltd. Yuefeng Branch** | - | 1391 |
| **Shanghai Pudong Development Bank Co., Ltd. Fuzhou Branch** | - | 2087 |
| **Industrial Bank Fuzhou Branch** | 13637 | 4994 |
| **Haixia Bank of Fujian Fuzhou Minjiang Branch** | - | 1391 |
| **Postal Savings Bank Fuzhou Branch** | 2134 | - |
| **China Industrial and Commercial Bank Fuzhou Branch** | 4268 | - |
| **Bank of China Ningde Branch** | 17821 | 16390 |
| **Total** | 81253 | 55791 |
| **Less: Short-term bank loans** | (44652) | (39401) |
| **Less: Long-term bank loans, current** | (2769) | - |
| **Long-term bank loans** | $33832 | $16390 |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**11.** **BANK LOANS (CONTINUED)** 

The movement of bank loans is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Beginning balance** | $55791 | $36130 | $47655 |
| **Additions** | 73961 | 66844 | 37876 |
| **Repayments** | (50152) | (46464) | (48661) |
| **Foreign currency translation adjustment** | 1653 | (719) | (740) |
| **Total** | $81253 | $55791 | $36130 |

---

For the years ended December 31, 2025, 2024 and 2023, the capitalized interest for the above bank loans was approximately $0.03 million, $0.3 million and $nil, respectively. For the years ended December 31, 2025, 2024 and 2023, the interest expense for the above bank loans was approximately $2.1 million, $1.3 million and $1.4 million, respectively. The bank loans outstanding for the years ended December 31, 2025, 2024 and 2023 carried a weighted average interest rate of approximately 2.93%, 3.55% and 3.94% per annum, respectively.

The repayment schedule for the bank loans is as follows:

---

| | |
|:---|:---|
| **Twelve months ending December 31,** | **Repayment** |
| 2026 | $47421 |
| 2027 | 3660 |
| 2028 | 17252 |
| 2029 | 2228 |
| 20330 | 2450 |
| Thereafter | 8242 |
| Total | $81253 |

---

As of December 31, 2025 and 2024, certain plant and land use right of the Company with the aggregated net book value of approximately $41.3 million and approximately $24.6 million, respectively, were pledged for certain notes payable and bank loans.

As of December 31, 2025, the Company had an aggregate credit line of approximately $124.3 million (RMB874.0 million) and approximately $90.5 million (RMB636.1 million) was used for the loan balance, bank acceptance notes payable, letters of credit and letters of guarantee.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**12.** **ACCRUED EXPENSES AND OTHER LIABILITIES** 

Accrued expenses and other current liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Rental and freight logistics deposits received** | $7161 | $6160 |
| **Payables for long-term assets** | 619 | 965 |
| **Government subsidies** | 1014 | 1022 |
| **Contract liabilities** | 1379 | 1629 |
| **Consideration deposit received from a third party (a)** | 142 | 139 |
| **Loans from third parties (b)** | 590 | - |
| **Others** | 450 | 596 |
| **Total** | $11355 | $10511 |
| **Less: accrued expenses and other current liabilities** | (10099) | (7673) |
| **Other non-current liabilities** | $1256 | $2838 |

---

(a) On
September 2, 2024, the Company entered into a Memorandum of Understanding with a third party to sell 90% equity interest in Suzhou Shengfeng
Logistics Co., Ltd. The Company have received consideration deposit of approximately $0.1 million (RMB1.0 million).

(b) The
balances represented the working capital loans provided by third parties . Such loans were non-interest bearing and due on demand.

&nbsp;&nbsp;&nbsp;&nbsp;**13.** **LEASES** 

<u>Operating leases as lessee</u>

 

As of December 31, 2025 and 2024, the Company has operating leases recorded on its consolidated balance sheets for certain office spaces and warehouses that expire on various dates through 2044. The Company terminated leases for certain facilities with lower usage, the termination of the leases reduced operating ROU assets of approximately $2.1 million and operating lease liabilities of approximately $2.1 million, respectively, during such periods. The Company does not plan to cancel the remaining existing lease agreements for its existing facilities prior to their respective expiration dates. When determining the lease term, the Company considers options to extend or terminate the lease when it is reasonably certain that it will exercise or not exercise that option. The Company's lease arrangements may contain both lease and non-lease components. The Company has separately accounted for lease and non-lease components based on their nature. Payments under the Company's lease arrangement are fixed.

The following table shows ROU assets and lease liabilities, and the associated financial statement line items:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| ***Assets*** | | |
| **Operating lease right-of-use assets, net** | $5720 | $9918 |
| ***Liabilities*** |  |  |
| **Operating lease liabilities, current** | $2669 | $4218 |
| **Operating lease liabilities, non-current** | $2156 | $4719 |
| **Weighted average remaining lease term (in years)** | 2.58 | 3.25 |
| **Weighted average discount rate per annum (%)** | 5.84 | 5.84 |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**13.** **LEASES (CONTINUED)** 

Information related to operating lease activities during the years ended December 31, 2025, 2024 and 2023 is set forth follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended<br> December 31,<br> 2025** | **Year ended<br> December 31,<br> 2024** | **Year ended<br> December 31,<br> 2023** |
| **Operating lease right-of-use assets extinguished in exchange for lease liabilities** | $(181) | $(2115) | $(1347) |
| ***Operating lease expense*** |  |  |  |
| **Amortization of operating lease right-of-use assets** | 4172 | 5796 | 8096 |
| **Interest of operating lease liabilities** | 432 | 785 | 1241 |
| **Total** | $4604 | $6581 | $9337 |

---

Maturities of lease liabilities were as follows:

---

| | |
|:---|:---|
| **Twelve months ending December 31,** | **Lease<br> Liabilities** |
| **2026** | $2746 |
| **2027** | 1342 |
| **2028** | 496 |
| **2029** | 216 |
| **2030** | 183 |
| **Thereafter** | 250 |
| **Total lease payments** | 5233 |
| **Less: imputed interest** | (408) |
| **Total** | $4825 |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**14.** **TAXES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Corporate Income Taxes ("CIT")** 

*Cayman Islands*

Under the current tax laws of Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.

 ****

*Hong Kong*

Under the current Hong Kong Inland Revenue Ordinance, the Company's subsidiary incorporated in Hong Kong is subject to two-tier profit tax rates. The profits tax rate for the first HKD 2 million of assessable profits of a corporation will be subject to the lowered tax rate, 8.25% while the remaining assessable profits will be subject to the legacy tax rate, 16.5%. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. The Company did not make any provision for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception.

*PRC*

The Company's PRC subsidiaries, the VIE and the VIE's subsidiaries are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the "CIT Laws"), domestic enterprises and Foreign Investment Enterprises (the "FIE") are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. The total impact of preferential tax rates amounted to approximately $1.9 million, $1.4 million and $0.8 million for the years ended December 31, 2025, 2024 and 2023, respectively and the impact to EPS is not significant for the years ended December 31, 2025, 2024 and 2023.

Under the CIT Laws, an enterprise which qualifies as a High and New Technology Enterprise ("the HNTE") is entitled to a preferential tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Beijing Shengfeng Supply Chain Management Co., Ltd. as a HNTE is entitled for a preferential tax rate of 15% from calendar year 2020 to 2025. Beijing Tianyushengfeng e-commerce Technology Co. Ltd. as a HNTE is entitled for a preferential tax rate of 15% from calendar year 2021 to 2026. Fujian Dafengche Information Technology Co. Ltd. as a HNTE is entitled for a preferential tax rate of 15% from calendar year 2024 to 2026. Shengfeng Supply Chain Management Co. Ltd. is eligible to enjoy a preferential tax rate of 15% from calendar year 2020 to 2024 to the extent it has taxable income under the CIT Laws due to the local preferential tax policy.

For qualified small and low-profit enterprises, from January 1, 2023 to December 31, 2027, 25% of the first RMB3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the years ended December 31, 2025 and 2024, some PRC subsidiaries, the VIE and the VIE's subsidiaries are qualified small and low-profit enterprises, and thus are eligible for the above preferential tax rates for small and low-profit enterprises.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**14.** **TAXES (CONTINUED)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Corporate Income Taxes ("CIT") (continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;*i)* *The components of income (loss) before income taxes are as follows:* 

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Non-PRC** | $(160) | $(258) | $(421) |
| **PRC** | 14416 | 12751 | 13049 |
| **Total** | $14256 | $12493 | $12628 |

---

*ii)* *The components of the income tax provision are as follows:*

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Current income tax expense** | $1706 | $1077 | $796 |
| **Deferred income tax expense** | 341 | 589 | 1524 |
| **Total income tax expense** | $2047 | $1666 | $2320 |

---

*iii)* *The following table reconciles PRC statutory rates to the Company's effective tax rate:*

The following table reconciles the China statutory rates to the Company's effective tax rate for the years ended December 31, 2025, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended December 31,** | **Years ended December 31,** | **Years ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **PRC statutory income tax rate** | 25.0% | 25.0% | 25.0% |
| **Effect of preferential tax rates (a)** | (13.1)% | (10.8)% | (6.2)% |
| **Eligible additional deduction (b)** | 1.1% | (2.4)% | (3.5)% |
| **Impact of different tax rates in other jurisdictions** | 0.3% | 0.5% | 0.8% |
| **Non-taxable and exemptions** | 0.1% | 0.0% | (0.3)% |
| **Permanent differences (c)** | 1.0% | 1.0% | 2.6% |
| **Effective income tax rate** | 14.4% | 13.3% | 18.4% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Preferential tax rates for
small and low profit enterprise and high and new technology enterprise.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Eligible additional deduction mainly consisted of research and development super deduction and disabled staff super deduction.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Permanent differences mainly consisted of non-deductible meal and entertainment fees in PRC tax returns.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**14.** **TAXES (CONTINUED)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Corporate Income Taxes ("CIT") (continued)** 

 

*iv)* *The following table summarizes deferred tax assets and liabilities resulting from differences between financial accounting basis and tax basis of assets and liabilities:*

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Deferred tax assets:** | | |
| **Net operating losses carryforward** | $309 | $280 |
| **Allowance for credit losses** | 776 | 791 |
| **Deferred income (a)** | 253 | 256 |
| **Intangible assets (b)** | 203 | 193 |
| **Operating lease liabilities** | 951 | 1806 |
| **Total deferred tax assets** | 2492 | 3326 |
| Less: valuation allowance | - | - |
| **Total deferred tax assets, net of valuation allowance** | **2492** | **3326** |
| Net off against deferred tax liabilities | (1179) | (1892) |
| **Net deferred tax assets** | $**1313** | $**1434** |
| **Deferred tax liabilities:** |  |  |
| **Property and equipment (c)** | $355 | $41 |
| **Operating lease right-of-use assets** | 1071 | 1904 |
| **Deferred tax liabilities** | 1426 | 1945 |
| Net off against deferred tax assets | (1179) | (1892) |
| **Net deferred tax liabilities** | $247 | $53 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Deferred income represents the assets related government subsidies, which will amortize on a straight-line basis within the useful life of related assets. The tax basis is recognized when the Company received the subsidies.

(b) Intangible asset represents the amortization temporary difference of licensed software. Management uses 10 years useful life as the tax basis, which is different from the 5 years useful life in accounting basis.

(c) Property and equipment represent the amortized temporary difference between the tax basis and the accounting basis.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the cumulative earnings and projected future taxable income in making this assessment. Recovery of substantially all of the Company's deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, valuation allowances of nil were provided for the Company's certain subsidiaries with net operating loss carryforwards as of December 31, 2025 and 2024.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**14.** **TAXES (CONTINUED)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Corporate Income Taxes ("CIT") (continued)** 

 

According to PRC tax regulations, the PRC enterprise net operating loss can generally carry forward for no longer than five years, and HNTE's net operating losses can be carried forward for no more than 10 years, starting from the year subsequent to the year in which the loss was incurred. Carryback of losses is not permitted. The Group will re-apply for the HNTE certificate when the prior certificate expires in the foreseeable future. Total net operating losses (NOLs) carryforwards of the Group's VIEs in mainland China is $1.4 million and $1.7 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, net operating loss carryforwards from PRC will expire in calendar years 2026 to 2030, and 2033, if not utilized.

 

*Uncertain tax positions*

According to the PRC Tax Administration and Collection Law, the statute of limitation is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitation is extended to five years under special circumstances where the underpayment of taxes is more than RMB100. In the case of transfer pricing issues, the statute of limitation is 10 years. The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2025 and 2024, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interests and penalties tax for the years ended December 31, 2025 and 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Tax payable** 

Tax payable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> December 31,<br> 2025** | **As of<br> December 31,<br> 2024** |
| **Value-added tax payable** | $2627 | $1879 |
| **Income tax payable** | 1093 | 821 |
| **Other taxes payable** | 430 | 317 |
| **Total** | $4150 | $3017 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**15.** **EQUITY** 

<u>Ordinary shares</u>

The Company was established as a holding company under the laws of Cayman Islands on July 16, 2020. The original authorized number of ordinary shares is 50,000 shares with par value of $1.00 per share. On December 18, 2020, the Company amended the Memorandum of Association to increase the authorized share capital to 400,000,000 Class A ordinary Shares and 100,000,000 Class B ordinary Shares and reduced the par value to $0.0001 per share.

<u>Initial Public Offering</u>

On April 4, 2023, the Company completed its initial public offering (the "IPO") of 2,400,000 Class A ordinary shares at a public offering price of $4.00 per share. The gross proceeds were $9.6 million from the offering, before deducting underwriting discounts and other related expenses. The Company received approximately $8.5 million after deducting offering costs.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**15.** **EQUITY (CONTINUED)** 

<u>Underwriter's Warrants</u>

In connection with the IPO, the Company issued to Univest Securities, LLC, and its affiliates, as the representative of the underwriters, warrants that are exercisable for a period of one year after the effective date of the registration statement, entitling the holders of the warrants to purchase an aggregate of up to 144,000 Class A ordinary shares at a per share price of $4.46. Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to the Company's Class A ordinary shares and meet the requirements for equity classification. The warrants were recorded at their fair value on the date of grant as a component of shareholders' equity. The fair value of these warrants was $368,454, which was considered a direct cost of IPO and included in additional paid-in capital. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying share of $4.05, risk free rate of 4.5%; expected term of one year; exercise price of the warrants of $4.46, volatility of 183.5%; and expected future dividends of nil. On October 19, 2023, the underwriters opted to exercise all warrants on a cashless basis. On October 25, 2023, the Company issued 97,513 Class A ordinary shares to the underwriters.

As of December 31, 2025, 40,617,513 Class A ordinary shares and 41,880,000 Class B ordinary shares were issued and outstanding. The shares are presented on a retroactive basis to reflect the recapitalization.

<u>Non-controlling interests</u>

For the year ended December 31, 2025, one of the non-controlling shareholders made capital contributions totaling approximately $0.2 million to the Company. On January 21, 2025, Suzhou Shengfeng, one of VIE subsidiaries declared a dividend of approximately $0.3 million, of which approximately $0.03 million was paid to the non-controlling shareholders. For the year ended December 31, 2024, one of the non-controlling shareholders made capital contributions totaling approximately $2.1 million to the Company. For the year ended December 31, 2023, one of the non-controlling shareholders made capital contributions totaling approximately $0.6 million to the Company.

<u>Statutory reserves</u>

The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC ("PRC GAAP"). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity's registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve as determined pursuant to PRC statutory laws totaled approximately $7.3 million and $6.0 million as of December 31, 2025 and 2024, respectively.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**15.** **EQUITY (CONTINUED)** 

<u>Restricted assets</u>

The Company's ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by Shengfeng WFOE and its subsidiaries, Shengfeng VIE and its subsidiaries (collectively "Shengfeng PRC entities") only out of retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Shengfeng PRC entities.

Shengfeng PRC entities are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% their of its registered capital. In addition, Shengfeng PRC entities may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at their discretion. Shengfeng PRC entities may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange.

As a result of the foregoing restrictions, Shengfeng PRC entities are restricted in their ability to transfer their assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Shengfeng PRC entities from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2025 and 2024, amounts restricted are the paid-in-capital and statutory reserve of Shengfeng PRC entities, which amounted to approximately $89.5 million and $88.2 million, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**16.** **COMMITMENTS AND CONTINGENCIES** 

&nbsp;&nbsp;&nbsp;&nbsp;***(a)***  ***Commitments*** 

As of December 31, 2025, the Company had letters of guarantee in aggregate of approximately $7.8 million (RMB54.8 million) issued by serval banks to the customers, which terms extend through 2028. The Company was required to maintain restricted cash of approximately $2.1 million (RMB15.0 million) for letters of guarantee.

&nbsp;&nbsp;&nbsp;&nbsp;***(b)***  ***Contingencies*** 

The Company is subject to legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome arising out of any such matters will have a material adverse effect on our consolidated financial position, cash flows or results of operations on an individual basis or in the aggregate. The Company had various pending legal proceedings or disputes related to the customers, suppliers, labor contracts and traffic accidents, which were still pending court decisions as of December 31, 2025. The Company's maximum exposure on potential losses resulted from these pending legal proceedings or disputes is approximately $0.6 million (RMB4.3 million) in aggregate. Approximately $0.6 million (RMB4.1 million) was frozen in a bank due to the pending lawsuits, which amount was included in restricted cash as of December 31, 2025. As of the date of these consolidated financial statements, the above-mentioned amount is still frozen in bank and the other legal proceedings or disputes have no material impact on the Company's business or financial performances.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**16.** **COMMITMENTS AND CONTINGENCIES (CONTINUED)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(c)***  ***Variable interest entity structure*** 

It is the opinion of management that (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of Tianyu and the VIE are in compliance with existing PRC laws and regulations in all material respects.

However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of the Company's management. If the current corporate structure of the Company or the Contractual Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company's current corporate structure or the Contractual Arrangements is remote based on current facts and circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;**17.** **SUBSEQUENT EVENTS** 

The Company evaluated all events and transactions that occurred after December 31, 2025 up through March 27, 2026, no subsequent events have occurred that would require recognition or disclosure in the Company's consolidated financial statements.

---

| | |
|:---|:---|
| **18** | **CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY** |

---

The Company's PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. Payment of dividends by entities organized in the PRC are subject to limitations, procedures and formalities. Regulations in the PRC currently permit payments of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in the PRC. The Company's PRC subsidiaries are also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its statutory reserves account until the accumulative amount of such reserves reaches 50% of its respective registered capital. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

In addition, the Company's operations and revenues are conducted and generated in the PRC, all of the Company's revenue being earned and currency received is denominated in RMB. RMB is subject to the foreign exchange control regulation in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Company's ability to convert RMB into USD.

Regulation S-X requires that the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company's PRC subsidiary exceed 25% of the consolidated net assets of the Company.

Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted. The Company's investment in subsidiary is stated at cost plus equity in undistributed earnings of subsidiaries.

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**18.** **CONDENSED FINANCIAL INFORMATION OF THE PARENTCOMPANY (CONTINUED)** 

**CONDENSED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **As of <br> December 31, <br> 2025** | **As of <br> December 31, <br> 2024** |
| **Assets** | | |
| **Current assets** | | |
| &nbsp;&nbsp;&nbsp;**Cash** | $63 | $20 |
| &nbsp;&nbsp;&nbsp;**Due from a related party** | 471 | - |
| &nbsp;&nbsp;&nbsp;**Prepayments and other current assets** | 231 | 356 |
| **Total Current Assets** | 765 | 376 |
| &nbsp;&nbsp;&nbsp;**Investment in subsidiaries and VIEs (restricted)** | 131852 | 116768 |
| **Non-current assets** | 131852 | 116768 |
| **Total Assets** | $132617 | $117144 |
| **Liabilities and Shareholders' Equity** |  |  |
| **Liabilities** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;**Due to a related party** | $110 | $- |
| &nbsp;&nbsp;&nbsp;**Accrued expenses and other current liabilities** | 590 | - |
| **Total Current Liabilities** | 700 | - |
| **Total liabilities** | 700 | - |
| **Commitments and Contingencies** |  |  |
| **Shareholders' Equity** |  |  |
| &nbsp;&nbsp;&nbsp;**Class A Ordinary share, $0.0001 par value, 400,000,000 shares authorized; 40,617,513 shares issued and outstanding as of December 31, 2025 and 2024.** | 4 | 4 |
| &nbsp;&nbsp;&nbsp;**Class B Ordinary share, $0.0001 par value, 100,000,000 shares authorized; 41,880,000 shares issued and outstanding as of December 31, 2025 and 2024.** | 4 | 4 |
| &nbsp;&nbsp;&nbsp;**Additional paid-in capital** | 83762 | 83762 |
| &nbsp;&nbsp;&nbsp;**Retained earnings** | 54347 | 42421 |
| &nbsp;&nbsp;&nbsp;**Accumulated other comprehensive loss** | (6200) | (9047) |
| **Total Shareholders' Equity** | 131917 | 117144 |
| **Total Liabilities and Shareholders' Equity** | $132617 | $117144 |

---

**SHENGFENG DEVELOPMENT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(All amounts in thousands of USD, except for share and per share data, unless otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**18.** **CONDENSED FINANCIAL INFORMATION OF THE PARENTCOMPANY (CONTINUED)** 

**CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Equity in earnings of subsidiaries** | $12086 | $11137 | $10715 |
| **General and administrative expenses** | (160) | (259) | (421) |
| **Net income** | 11926 | 10878 | 10294 |
| **Other comprehensive income (loss)** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Foreign currency translation adjustments** | 2847 | (1681) | (1757) |
| **Comprehensive income** | $14773 | $9197 | $8537 |

---

**CONDENSED STATEMENTS OF CASH FLOW**

---

| | | | |
|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** | **2023** |
| **Cash flows from operating activities** |  |  |  |
| **Net income** | $11926 | $10878 | $10294 |
| **Adjustments to reconcile net income to net cash used in operating activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Equity income of subsidiaries and VIEs** | (12086) | (11137) | (10715) |
| &nbsp;&nbsp;&nbsp;**Due from a related party** | (471) | - | - |
| &nbsp;&nbsp;&nbsp;**Prepaid expenses and other current assets** | 124 | (263) | (92) |
| **Net cash used in operating activities** | (507) | (522) | (513) |
| **Cash flows from investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Loan to a subsidiary** | (150) | - | (6660) |
| **Net cash used in investing activities** | (150) | - | (6660) |
| **Cash flows from financing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Due to a related party** | 110 | - | (600) |
| &nbsp;&nbsp;&nbsp;**Loans from third parities** | 1190 | - | - |
| &nbsp;&nbsp;&nbsp;**Repayment to a third party** | (600) | - | - |
| &nbsp;&nbsp;&nbsp;**Deferred issuance costs** | - | - | (279) |
| &nbsp;&nbsp;&nbsp;**Proceeds from initial public offering** | - | - | 8547 |
| **Net cash provided by financing activities** | 700 | - | 7668 |
| **Net increase(decrease) in cash** | 43 | (522) | 495 |
| **Cash, beginning of year** | 20 | 542 | 47 |
| **Cash, end of year** | $63 | $20 | $542 |

---

## Exhibit 4.13

**Exhibit 4.13**

**ROAD FREIGHT TRANSPORTATION COOPERATION AGREEMENT**

This Road Freight Transportation Cooperation Agreement (hereinafter referred to as the "Agreement") is entered into by the following parties on September 24, 2025 in Hefei High-Tech Industrial Development Zone, China:

**Party A (Shipper): Shengfeng Logistics Group Co., Ltd.**

Unified Social Credit Code: XXX

**Party B (Carrier): Hefei Weitian Yuntong Information Technology Co., Ltd.**

Unified Social Credit Code: XXX

*(Party A and Party B are individually referred to as a "Party" and collectively referred to as the "Parties")*

**WHEREAS:**

&nbsp;&nbsp;&nbsp;&nbsp;1. Party A, in connection with its business development, has significant demand for road freight transportation services and intends
to integrate resources, leverage complementary strengths, and cooperate with Party B in carrying out road freight transportation.

&nbsp;&nbsp;&nbsp;&nbsp;2. Party B is a pioneer in China's "Internet + Logistics" industry, among the first batch of domestic enterprises to obtain
the "asset-light carrier / online freight platform" qualification pilot, and is committed to building a healthy logistics ecosystem
in China. Party B independently develops, builds, and operates the Luge "Internet + Logistics" platform with a service network
covering the entire country.

NOW, THEREFORE, based on principles of long-term cooperation, mutual benefit, and common development, and through friendly negotiations, and in accordance with the Civil Code of the People's Republic of China and other applicable laws and administrative regulations, the Parties hereby enter into this Agreement as follows:

**Article 1 Scope, Content, and Method of Cooperation**

1.1 Party A entrusts Party B to carry out road freight transportation from the origin designated by Party A to the destination:

Cargo Description: General Merchandise

Route: Nationwide

Party A shall truthfully fill in the cargo description and route information both under this Agreement and in Party B's system, ensuring that the information is consistent with the actual transportation details and does not violate any applicable laws and regulations.

1.2 Party B, as an asset-light carrier / online freight platform operator, accepts Party A's freight transportation commission, enters into a transportation contract with Party A as the carrier, and then commissions actual carriers/drivers to complete the transportation tasks. Party A publishes specific transportation tasks through the online system, and each transportation transaction is interactively confirmed through the online system.

1.3 The Parties may develop digital product cooperation on the basis of road freight transportation cooperation. Through processing, analyzing, and visualizing logistics and transportation data accumulated by Party A, Party B shall provide Party A with digital product services to improve the quality of freight services, enhance differentiated competitiveness, and help improve and elevate Party A's operational capabilities. The specific content of digital service cooperation shall be subject to the services actually provided.

**Article 2 Cooperation Model**

2.1 Based on the respective capabilities and strengths of both parties, and combined with the "Internet + Logistics" model of the Luge Internet logistics platform, the Parties shall cooperate through a combination of online and offline methods to jointly build a controllable capacity ecosystem and achieve a low-cost, high-efficiency, sustainable transportation model. Party A acknowledges and confirms the content of Party B's online freight platform business operation guidelines (Exhibit 1 to this Agreement) and undertakes to conduct business and operations in accordance with such content.

2.2 Party A shall fully leverage its advantages in face-to-face offline coordination with various participants, familiarity with loading/unloading site conditions, and knowledge of cargo status and specifications. Party A shall be responsible for organizing, coordinating, and reviewing the loading/unloading sites. Party A shall promptly notify the cargo receiving and dispatching personnel of the actual carrier driver's/vehicle's name/license plate number and contact information, and Party A's liaison personnel shall ensure communication remains open throughout the business process to ensure normal cargo delivery and receipt.

2.3 Party B shall fully leverage its advantages in information technology capabilities and standardized operational processes, and shall be jointly responsible for online vehicle integration and dispatch management, in-transit transportation management, business document circulation and review, transportation order exception coordination management, and providing standardized operation guidelines for each node of transportation orders. The scope of digital freight product cooperation between the Parties includes data on online management of freight order stages, freight service quality evaluation management data, and digital integration management data for capacity resources. Party B shall process and analyze logistics and transportation data accumulated on the Luge platform to precisely quantify key indicators in the freight business process, provide overall business operation data summaries, and analysis of key freight indicator trends, subject to the products/services actually delivered by Party B.

**Article 3 Rights and Obligations of Party A**

3.1 Party A is entitled to require Party B to transport the cargo to the destination at the time, location, and route agreed in this Agreement. After the cargo is consigned and before it reaches the destination, if Party A needs to change the waybill information (including destination, consignee, etc.) or cancel the consignment, Party A shall notify Party B in writing and obtain the consent of Party B or the actual carrier. All costs arising from Party A's change of transportation instructions (including but not limited to changing the consignee, cargo destination, or canceling the consignment) shall be borne by Party A.

3.2 Party A shall package the consigned cargo in accordance with the prescribed standards and shall strictly comply with relevant national laws and regulations and road transportation safety operating procedures, delivering cargo at the time and quantity specified in this Agreement. Party A must ensure the smooth loading/unloading operations upon the vehicle's arrival at the destination. Party B is not responsible for cargo loading/unloading at the site. Any personal injury and/or property damage sustained at the cargo loading/unloading site by Party A, the actual carrier driver, and/or any third party is unrelated to Party B, and Party A shall not make any claims against Party B for such injury and/or damage. If loading/unloading is involved in the Parties' cooperation, the Parties shall separately agree in writing on loading/unloading arrangements. Party B has not authorized any institution or individual to arrange loading/unloading, and Party B shall not bear any legal liability for loading/unloading services provided without Party B's written confirmation.

3.3 Party A is familiar with the transportation business scenarios and is primarily responsible for offline communication with various transportation participants. Party A must strictly require on-site personnel to review the actual carrier drivers and vehicles, verify the dispatched vehicle information and personnel identification, and ensure the safety of vehicles and cargo during transportation. Party A undertakes to load cargo reasonably, shall not conceal prohibited goods, hazardous materials, goods explicitly prohibited by the state, or contraband, and shall not intentionally misrepresent or conceal the weight, specifications, or nature of the cargo.

3.4 Party A is entitled to retrieve various resource information from the joint information system, including but not limited to vehicle resource information, business information, operational node records, and receipt management information. After cargo arrives at the destination, Party A or the consignee shall carefully verify the cargo quality, quantity, etc., and sign for receipt upon confirmation. After signing the receipt, the cargo shall be deemed to have been delivered in good condition.

**Article 4 Rights and Obligations of Party B**

4.1 Party B shall guide Party A to publish transportation tasks on the platform system, provide actual carrier drivers with system entry points for uploading qualification documents, accepting orders, and signing specific transportation order agreements, conduct online verification of qualification documents provided by actual carrier drivers, and formulate qualification collection and operation guidelines for actual carrier drivers.

4.2 Party B shall require actual carriers/drivers to timely deliver consigned cargo to the designated location within the period specified in this Agreement, and to deliver to the consignee and complete handover procedures as required by Party A. Party B shall conduct online tracking and management of in-transit transportation, and shall promptly coordinate with Party A to handle any abnormalities that may arise.

4.3 If cargo cannot be loaded on time due to Party A's reasons, or if the consignee cannot be reached, or if the consignee refuses to collect the cargo, Party B shall promptly notify Party A and await Party A's instructions before taking further action. Storage fees, vehicle detention fees, and all other reasonable expenses arising therefrom shall be negotiated and determined by Party A and the actual carrier/driver. Party B shall also proactively remind actual carriers/drivers to properly safeguard the cargo to minimize loss or damage.

4.4 Party B shall guide Party A and actual carriers/drivers to circulate transportation order documents online, and formulate standardized operation guidelines for each node of transportation orders. Party B shall comply with relevant laws and regulations to properly retain online transportation order transaction information. Both Parties confirm that the operator of the Luge platform is entitled to retain transportation transaction-related data and information. The operator of the Luge platform is entitled to use all or part of such data and information through copying, cleaning, processing, translation, distribution, analysis, and other means, and to generate data products and/or incorporate such data into other software/services/products in known or future-developed forms, media, or technologies, and to legitimately enjoy data resource ownership rights, data processing and usage rights, and data product operation rights.

**Article 5 Cargo Risk**

In the event of cargo loss during transportation, both Parties shall, upon receiving feedback, actively communicate and cooperate with each other to handle any anomalies promptly. Regarding compensation for cargo loss, the Parties further agree to adopt the following [Method 2]:

Method 1 – Cargo Loss Protection: For cargo consigned by Party A to Party B, Party A shall specify the cargo value when placing an order on the system. Party B shall configure a corresponding rate based on the cargo value range, calculate the corresponding cargo loss protection service fee based on the rate, and adjust the freight rate accordingly. Compensation liability for cargo damage or loss during transportation shall be borne by Party B, and the compensation amount shall be based on the lower of the cargo value specified when placing the order on the system and the sales value of the carried cargo or the value confirmed by Party A's customer. If Method 1 is adopted, the Parties shall separately enter into a supplementary agreement to specify compensation rules and claims operation procedures. For specific transportation orders not executed under the cargo loss protection method (where Party A did not specify the cargo value when placing the order on the system), the following "Method 2 – General Transportation" provisions shall apply.

Method 2 – General Transportation: For cargo consigned by Party A to Party B, Party A shall independently purchase cargo insurance offline. Risks and losses arising from cargo damage or loss during transportation shall be primarily claimed by Party A from the insurance company. After full consultation, the Parties agree: for any direct and indirect losses, costs, and expenses related to any single cargo transportation under this Agreement (including but not limited to scenarios such as price increases by actual carriers/drivers, damage, loss, delayed delivery, theft, cargo abandonment, and actual carriers/drivers requesting the shipper to collect the cargo themselves), Party B's liability and compensation to Party A is limited solely to the single freight fee already collected by Party B for that transportation.

**Article 6 Freight Settlement and Invoice Issuance**

6.1 For cooperation under this Agreement, Party B shall collect XXX% of the total freight per order as Party B's comprehensive transportation service margin. The remaining portion shall be settled online to the actual carrier vehicle. Payment records shall be transparent to Party A. If Party A selects cargo loss protection, the freight rate shall be adjusted upward accordingly. The specific freight for each order shall be subject to the transportation order displayed in the system.

6.2 Delivery Confirmation: Party A shall promptly click to confirm receipt in the system after the cargo is delivered under a transportation order. If Party A has not clicked to confirm receipt within 48 hours of cargo delivery and has not raised any objection, the system will automatically confirm that the cargo has been delivered.

6.3 Reconciliation: After a transportation order is completed in the system, both Parties shall use valid electronic documents uploaded by the actual carrier/driver to the system (including warehouse-out slips, receipts, etc.) as the basis for review. Freight verification and reconciliation shall be conducted on a per-transportation-order basis in the system, and corresponding settlement shall be made after freight verification. The Parties shall conduct reconciliation on a quarterly basis for completed but unsettled transportation orders in the system, and shall promptly complete corresponding settlement and processing. Losses caused by failure to complete reconciliation on time shall be borne by the responsible party.

6.4 Settlement Methods:

6.4.1 The Parties agree that Party A, after confirming receipt of cargo under a transportation order, must pay the freight payable to Party B to the settlement system account designated by Party B. Party B, upon receipt of the freight, shall pay the freight due to the actual carrier/driver. Party A's payment time shall not be later than 30 calendar days after the delivery confirmation of the current single transportation order.

6.4.2 To ensure high-quality service from vehicles and long-term good-faith cooperation, the Parties must guarantee the timeliness and completeness of freight payments to drivers. The Parties further agree that freight payments from Party A to Party B and then to actual carriers/drivers shall be made using the following [Method 1]:

Settlement Method 1: Party A first pays the freight for a transportation order to Party B's designated system account corresponding to that waybill, and then Party A triggers a settlement instruction to Party B in the system for that order. Upon receipt of the instruction, Party B's system freight account will immediately pay the freight due to the actual carrier/driver.

Settlement Method 2: Party B advances freight on behalf of Party A, or introduces a financial institution cooperating with Party B to provide financial factoring services for Party A (collectively referred to as "advance freight services"). After Party A confirms receipt of cargo under a transportation order, Party A triggers a settlement instruction to Party B in the system for that order. Upon receipt of the instruction, Party B directly settles and pays the freight to the actual carrier/driver on behalf of Party A (limited to the actual carrier driver personally collecting the corresponding freight). After Party B completes the advance payment, Party A shall pay Party B's freight to Party B within the agreed payment period. Both Parties confirm that the amount of advanced freight under this Agreement shall be subject to Party B's system data (electronic reconciliation statements, electronic data, etc., generated by Party B's system).

6.4.3 In the event of overdue payment by Party A, Party A shall pay Party B a late payment penalty on the overdue amount at four (4) times the one-year Loan Prime Rate (LPR) published by the National Interbank Funding Center for the month of the overdue payment (calculated on a 360-day year basis). Party B also has the right to suspend or terminate this Agreement without bearing any liability for breach of contract.

6.4.4 Party A understands and agrees that, in order to ensure timely settlement of freight by Party A and to safeguard the smooth progress of the Parties' cooperation, Party B is entitled to set certain limits on the cumulative total freight for all of Party A's in-transit waybills (including all waybills issued but not yet settled by Party A, as shown on the relevant page of Party B's system), with the specific limit subject to Party B's notification. Once the cumulative total freight for Party A's in-transit waybills reaches the corresponding limit, Party B will no longer accept Party A's commissions and will temporarily disable Party A's function to create waybills. If Party A settles the freight for in-transit waybills as required and the cumulative total freight for all of Party A's in-transit waybills falls below Party B's limit, Party B may resume accepting Party A's commissions and restore Party A's function to create waybills.

6.5 Invoice Issuance: Party B shall issue a value-added tax special invoice for road transportation services (at the current tax rate of 9%) for the total freight paid by Party A to Party B. Party A's invoicing information shall be subject to the information actually confirmed by both Parties.

6.6 Party B's designated freight settlement system account details are set forth in the Exhibit.

**Article 7 Further Agreements Between the Parties**

7.1 Within the scope of cooperation, the Parties shall designate corresponding dedicated institutions or personnel at the same business category or level for business communication and handling of daily business matters, such as document handover, contract management, system reconciliation, and voucher management.

7.2 Freight rate adjustments due to force majeure events caused by national overload governance policies, bridge and tunnel policies, road tolls, traffic controls on routes, height restrictions, changes in driving routes, fuel prices, and national policy changes shall be negotiated and adjusted proportionally by both Parties.

7.3 If either Party's business model or industry policies change, both Parties shall actively negotiate to sign a new contract or supplementary agreement under the new model. If no agreement is reached, this Agreement shall be terminated and neither Party shall bear any liability for breach of contract. Party A shall still continue to settle and pay outstanding transportation fees incurred before the termination of this Agreement in accordance with the provisions hereof.

7.4 Force Majeure: Force majeure as referred to in this Agreement means objective circumstances that were unforeseeable at the time of signing this Agreement, that are unavoidable, and whose consequences are insurmountable by both Parties. Such objective circumstances include but are not limited to policy changes, earthquakes, typhoons, floods, fires, wars, strikes, riots, hacker attacks, or any other unforeseeable, unavoidable, or uncontrollable events, including those generally recognized as force majeure in international commercial practice. In the event of force majeure, the Parties shall immediately consult to seek a fair solution and shall make all reasonable efforts to minimize the impact of force majeure.

7.5 If the actual carrier/driver fails to accept an order within 3 days (72 hours) after Party A creates a transportation task, or if the actual carrier/driver fails to commence transportation within 3 days (72 hours) after accepting the order, the waybill shall be cancelled, and neither Party shall bear any obligations or liabilities in respect of that waybill.

**Article 8 Confidentiality**

Both Parties undertake to strictly keep confidential any documents, data, and materials ("Confidential Information") obtained during the discussion, signing, and performance of this Agreement that belong to the other Party and cannot be obtained from public channels (including trade secrets, sales prices, transportation routes, vehicle sources, operational activities, and other information). Neither Party shall disclose or use such Confidential Information to any third party, nor use it for any purpose other than the purposes of this Agreement, except as required by laws, regulations, or regulatory authorities. Any Party that breaches this Agreement by disclosing the other Party's Confidential Information shall compensate the non-breaching Party for all losses incurred thereby.

**Article 9 Anti-Commercial Bribery Clause**

9.1 In order to jointly combat commercial bribery and other unfair competition practices, protect the legitimate rights and interests of both Parties, and ensure the healthy and orderly development of the commercial cooperation between the Parties, and in accordance with the Law of the People's Republic of China on Anti-Unfair Competition, the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Anti-Unfair Competition Law, and the Interim Provisions on Prohibition of Commercial Bribery, and adhering to the principles of voluntariness, equality, fairness, and good faith, and observing recognized commercial ethics, both Parties and their handlers and authorized representatives shall act in accordance with the law during commercial activities, maintain integrity and self-discipline, and shall not engage in any conduct involving commercial bribery or damaging the interests of either company.

9.2 Both Parties solemnly undertake that all financial transactions between the Parties shall be conducted through corporate accounts, and neither Party's handler or authorized representative shall be authorized to collect or make payments on behalf of the company through personal bank accounts, WeChat, Alipay, or other channels. Neither Party shall secretly solicit, accept, provide, or give any benefit outside the scope of this Agreement to the other Party, the other Party's handlers or authorized representatives, or other relevant personnel, including but not limited to rebates, kickbacks, cash, shopping cards, goods, securities, travel, or other non-material benefits. If any such benefit constitutes industry practice or common practice, it shall be explicitly stated in writing.

9.3 "Other relevant personnel" as referred to in this Article means persons other than the handlers or authorized representatives of both Parties who have a direct or indirect interest in the cooperation under this Agreement.

9.4 If either Party discovers that the other Party, or its handler, authorized representative, or other relevant personnel engages in commercial bribery or conduct damaging the interests of either company, it may report such conduct to the other Party. The recipient of the report shall strictly maintain the confidentiality of all informants and all materials provided. Reporting methods are as follows:

Party A reporting address: XXX

Party A reporting email/telephone: XXX

Party B reporting address: XXX

Party B reporting email: XXX

**Article 10 Notices and Service**

10.1 Any notice or other correspondence ("Correspondence") sent by either Party to the other shall be sent through the contact information of the other Party as recorded in this Agreement, by personal delivery, express mail, or registered mail, and shall take effect upon delivery under the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.1 If delivered in person, the date of personal delivery shall be deemed the date of service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.2 If sent by express mail or registered mail, the date of the recipient's signature shall be the date of service. If the recipient has not signed for receipt, the fifth calendar day after the date of mailing shall be deemed the date of service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.3 Correspondence may also be in the form of announcements or information pushes on the system page of Party B and/or Party B's affiliates, system announcements, emails sent to Party A, mobile or PC client push messages, or SMS and other electronic means. In the case of notification by electronic means, the date of sending shall be deemed the date of service.

10.2 If multiple methods are used simultaneously, the method that reaches the other Party first shall prevail.

10.3 If the contact person or contact information under this Agreement is changed, the changing Party shall promptly notify the other Party in writing. Correspondence sent by the other Party to the pre-change contact information before receipt of the change notice shall be deemed valid.

10.4 Both Parties agree that courts, arbitration institutions, or other dispute resolution bodies may serve legal documents on the other Party in accordance with the contact information recorded in this Agreement.

**Article 11 Governing Law and Dispute Resolution**

11.1 The conclusion, validity, interpretation, amendment, supplementation, termination, execution, and dispute resolution of this Agreement shall be governed by the laws of the People's Republic of China (for the purposes of this Agreement only, and for the avoidance of doubt, excluding the laws of the Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan region).

11.2 Both Parties undertake that, with respect to any dispute or controversy relating to this Agreement, they shall first make every effort to overcome difficulties and endeavor to ensure the performance of this Agreement. If actual or proper performance encounters insurmountable difficulties requiring modification or termination of this Agreement, the Parties shall consult with each other within the period prescribed by law or within a reasonable period. If no agreement is reached through consultation, either Party may bring a lawsuit before the people's court of competent jurisdiction at the place where this Agreement was signed.

11.3 During the period of consultation or litigation, the parties to this Agreement shall continue to perform the provisions of this Agreement that are not in dispute.

**Article 12 Formation, Effectiveness, and Term of the Agreement**

12.1 This Agreement may be executed by electronic signature or offline signature. If the Parties execute this Agreement by electronic signature, this Agreement shall take effect after both Parties complete the relevant electronic signing process in accordance with the rules of the electronic signing platform mutually agreed upon by both Parties. If the Parties execute this Agreement offline, this Agreement shall take effect upon the signing and sealing by all parties. In the case of offline execution, this Agreement shall be executed in duplicate, with each Party retaining one copy, each having equal legal effect.

12.2 The cooperation period under this Agreement shall be from XXX to XXX (the "Cooperation Period").

12.3 Upon the signing and effectiveness of this Agreement, all transportation agreements and supplementary agreements previously signed by both Parties regarding the relevant cooperation matters (including but not limited to exhibits and annexes) shall automatically be terminated and cease to be performed. However, any account authorization letters signed and sealed by the affiliates of Party A and Party B (if any) shall remain valid and effective.

**Article 13 Miscellaneous**

13.1 Party A under this Agreement includes Party A and its affiliates. Party A's affiliates shall exercise rights and perform obligations in accordance with the terms of this Agreement. Party A's affiliates under this Agreement refer to the following companies (see Exhibit 2 to this Agreement: List of Party A's Affiliated Enterprises; any newly added affiliated companies shall be supplemented by a supplementary agreement signed by both Parties). Party B under this Agreement includes Party B and its affiliates. Party B's affiliates shall exercise rights and perform obligations in accordance with the terms of this Agreement. Party B's affiliates under this Agreement refer to the following companies (see Exhibit 3 to this Agreement: List of Party B's Affiliated Enterprises; any newly added affiliated companies shall be supplemented by a supplementary agreement signed by both Parties).

13.2 Matters not covered by this Agreement, or matters requiring amendment to this Agreement, may be separately negotiated and resolved by the Parties through a supplementary agreement. The supplementary agreement shall form part of this Agreement and shall have equal legal effect. In the event of any inconsistency between a supplementary agreement and this Agreement, the supplementary agreement shall prevail.

13.3 The Exhibits to this Agreement (including other legal documents arising from the Exhibits, electronic reconciliation statements, electronic data, etc., generated by Party B's system) shall form part of this Agreement and shall have equal legal effect.

13.4 All written correspondence under this Agreement (including but not limited to notices, notifications, statements, etc.) shall form part of this Agreement and shall have equal legal effect.

(No further text below this line)

This Agreement is signed by the Parties on the date first written above.

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| | |
|:---|:---|
| **Party A: Shengfeng Logistics Group Co., Ltd.**<br>Authorized Representative: _______________<br>Date: _______________<br>| **Party B: Hefei Weitian Yuntong Information Technology Co., Ltd.**<br>Authorized Representative: _______________<br>Date: _______________<br>|

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## Exhibit 4.15

**Exhibit 4.15**

**WORKING CAPITAL LOAN CONTRACT**

Contract No.: XXXXXXXX

Debtor (Party A): Shengfeng Logistics Group Co., Ltd.

Address: XXXXXXXXXXXXXXXXXXXXXX

Creditor (Party B): Xiamen International Bank Co., Ltd. Fuzhou Branch

Address: XXXXXXXXXXXXXXXXXXXXXX

Important Notice: This contract is entered into by the borrower and lender in accordance with relevant laws and regulations, on an equal and voluntary basis through negotiation. All contract terms are the true expression of both parties' intentions. To fully protect the legitimate rights and interests of the debtor, the creditor specifically requests the debtor to carefully read all contract terms, especially the bold provisions, and pay full attention to their content. If there are any questions or uncertainties, please consult Party B or a professional institution or professional in a timely manner.

After negotiation by all parties, Party B agrees to provide the following working capital loan to Party A for its use. In order to clarify the economic responsibilities of all parties, this contract is hereby entered into as follows:

**1. Total Loan Amount**

Currency and amount (in words and figures): RMB XXX (CNY XXX,XXX,XXX.XX)

**2. Loan Validity Period**

The loan validity period is from XXX XX, 20XX to XXX XX, 20XX. Upon expiry of the loan validity period, any unused loan under this contract shall automatically become invalid.

**3. Loan Interest Rate and Interest Accrual (Simple Interest)**

3.1 The loan interest rate shall be handled in accordance with Method 3.1.1 below. The loan interest rate value under this contract is a tax-inclusive price including value-added tax.

3.1.1 The loan under this contract adopts a uniform fixed interest rate. The loan interest rate is a fixed value of 3.5% (annual rate). This fixed value is determined based on the LPR for the XX-year term published by the National Interbank Funding Center at the close of business of Party B on the last business day before the signing date of this contract, plus/minus XX%. This fixed value shall not be adjusted during the contract period.

3.2 Interest Accrual

3.2.1 Interest accrues from the date of actual drawdown by Party A, and is handled in accordance with Method (1) below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) (Applicable to RMB, USD, EUR, JPY, CHF loans) Interest payable = Actual drawdown amount × Loan interest rate (annual rate) × Number of days used ÷ 360

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) (Applicable to GBP, HKD loans) Interest payable = Actual drawdown amount × Loan interest rate (annual rate) × Number of days used ÷ 365

3.2.2 Interest settlement shall be handled in accordance with Method (2) below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) (Applicable to foreign currency loans, not applicable to discounting and overdrafts) During the validity period of this contract, Party B shall collect loan interest on a quarterly basis, with the interest settlement date being the last day of each quarter. When Party A repays all loans under a certain promissory note, the interest on all loans under that promissory note shall be settled at the same time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) (Applicable to RMB loans, not applicable to discounting and overdrafts) During the validity period of this contract, Party B shall collect loan interest on a quarterly basis, with the interest settlement date being the 21st of the last month of each quarter. When Party A repays all loans under a certain promissory note, the interest on all loans under that promissory note shall be settled at the same time.

**4. Purpose of the Loan**

The loan under this contract is exclusively for Party A's daily production and operation working capital. Without the creditor's written consent, the debtor shall not divert the loan under this contract for other purposes. At the same time, the debtor undertakes and guarantees that the loan funds under this contract shall not flow into the securities market or futures market in any form, shall not be used for investment in stocks, bonds, futures, financial derivative products and asset management products, shall not be used for Party A's shareholder dividends, shall not be used for financial assets, fixed assets, equity investments, shall not be used for real estate project development or the real estate sector, shall not be used in any form to purchase or repay residential mortgage loans or other real estate mortgage loans; shall not be used for money laundering or terrorist financing; shall not be used for other purposes prohibited or restricted by law.

**5. Use of the Loan**

5.1 Party A shall open a current account at Party B. Each drawdown by Party A shall be processed through its current account at Party B.

5.2 During the loan validity period, Party A shall submit a written application to Party B at least two banking business days in advance for each drawdown. Party B has the right to unilaterally review and decide whether to disburse the loan. For any reason, if Party B disagrees with disbursing the loan, Party A has no right to demand Party B to disburse.

5.3 If Party B has approved Party A's drawdown application, but Party A fails to draw down the loan within the notified drawdown period, Party A shall pay Party B a compensation fee of __/__ % of the notified drawdown amount in the original currency of the loan.

5.4 During the loan validity period, each loan shall be based on corresponding business vouchers (including but not limited to loan promissory notes) for the amount, term, and purpose.

5.5 For external payment of loan funds, Method 5.5.1 shall apply:

5.5.1 Entrusted payment by the lender. Party A entrusts Party B to transfer the loan funds disbursed to Party A's account to the transaction counterparties of Party A that comply with the agreed purpose of this contract. Party A shall bear all legal and economic responsibilities arising from this entrustment.

The loan under this contract shall adopt entrusted payment by the lender in any of the following circumstances: (1) Party A and Party B are establishing a new credit business relationship and Party A's credit status is average; (2) The payment object is clear and the single payment to a transaction counterparty exceeds RMB 10 million; (3) Other circumstances determined by Party B.

5.5.2 Independent payment by the debtor. After Party B disburses the loan funds to Party A's account, Party A shall independently pay the funds to the transaction counterparties of Party A that comply with the agreed purpose of this contract. Party A shall report to Party B on the actual payment of loan funds within one month after each drawdown and provide relevant contracts and other materials as evidence; otherwise, Party B has the right to suspend Party A's drawdowns.

5.6 During the disbursement and payment process of the loan, if Party A's credit status declines, or business and financial status deteriorates significantly, or the use of loan funds is abnormal, or entrusted payment is evaded, or there are other major violations of this contract, the external payment method of the loan funds shall all be adjusted to the method specified in 5.5.1, and Party B has the right to stop or suspend the disbursement and payment of loan funds.

5.7 Loans repaid under this contract may not be redrawn.

5.8 (Only applicable to situations where multiple contract loans are subject to aggregate control) The sum of the outstanding loan balance under this contract and the outstanding loan balance under the contract numbered __/__ signed by Party A at Party B shall not exceed __/__ (amount in words and figures) (converted at a rate of __/__).

5.9 Other conditions: __/__

**6. Repayment of Principal and Interest**

6.1 Party A shall pay the loan principal and interest in full and on time as agreed in this contract. Party A authorizes Party B to actively debit the loan principal, interest, penalty interest, compound interest, liquidated damages and other fees agreed under this contract (if any) from Party A's accounts opened at Xiamen International Bank Co., Ltd. and its branches. Such amounts may be in the original currency of the loan or in other currencies equivalent to the original currency of the loan after conversion.

6.2 If the funds in Party A's account are insufficient to pay the principal, interest and other fees due under this contract (if any), Party B has the right to determine the order of deduction.

6.3 Early repayment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) If Party A repays all or part of the outstanding loan before maturity, it shall obtain Party B's prior written consent, and shall pay Party B a compensation fee equivalent to __/__ of the loan principal currency, which shall be paid together with the interest due and the principal on the early repayment date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) At the time of early repayment, Party A shall simultaneously settle all loan principal, interest and other fees (if any) due under this contract up to the early repayment date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The order of early repayment must follow the repayment schedule agreed in this contract, repaying in order from first to last.

6.4 Party A shall designate a dedicated fund collection account and promptly provide Party B with the fund inflow and outflow status of the account.

**7. Security**

To secure Party A's performance of its obligations under this contract, legally valid security shall be provided to Party B in accordance with Method 7.1 below.

7.1 XXX and XXX (hereinafter referred to as 'Guarantors') shall provide joint and several liability guarantee for all debts owed by Party A to Party B under this contract (Guarantee Contract attached separately).

7.2 __/__ (hereinafter referred to as 'Mortgagor') shall provide a mortgage on the property located at __/__ owned by them to secure repayment of all debts owed by Party A to Party B under this contract, granting Party B the first priority lien (Mortgage Contract attached separately).

7.3 __/__ (hereinafter referred to as 'Pledgor A') shall pledge deposits (currency) of __/__ (amount in words and figures) __/__ and interest thereon at Party B as security for repayment of all debts owed by Party A to Party B under this contract, granting Party B the first priority pledge right (Pledge Contract attached separately).

7.4 __/__ (hereinafter referred to as 'Pledgor B') shall pledge the security deposit (currency) of __/__ (amount in words and figures) __/__ paid to Party B and interest thereon as security for repayment of all debts owed by Party A to Party B under this contract, granting Party B the first priority pledge right (Pledge Contract attached separately).

7.5 __/__ (hereinafter referred to as 'Pledgor C') shall pledge __/__ (fill in company name) shares/equity and interest thereon owned by them to secure repayment of all debts owed by Party A to Party B under this contract, granting Party B the first priority pledge right (Pledge Contract attached separately).

7.6 __/__ bank (hereinafter referred to as 'Issuing Bank') shall issue an irrevocable standby letter of credit with Party B as beneficiary in the total amount of (currency) __/__ (amount in words and figures) __/__ as joint and several guarantee for repayment of all debts owed by Party A to Party B under this contract. If Party A fails to repay the debt on time as agreed in this contract, we have the right to demand repayment of the debt owed by Party A from the Issuing Bank in accordance with the terms of the letter of credit.

7.7 Party A shall pledge accounts receivable from __/__ (fill in company name) of not less than (currency) __/__ (amount in words and figures) __/__ and the corresponding collection accounts as security for repayment of all debts owed by Party A to Party B under this contract. The collection accounts shall be used first to repay the loan principal, interest, penalty interest, compound interest and other fees owed by Party A to Party B (if any), or directly deposited into Party A's account at Party B and converted to pledge deposits to secure repayment of all debts owed by Party A to Party B under this contract. Party A guarantees that its deposit account at Party B is the sole collection account for accounts receivable.

7.8 Other security conditions: __/__

**8. Other Conditions**

8.1 Any change in Party A's organizational structure (including shareholders and shareholding ratios) must be notified to Party B in writing in advance.

8.2 Party A shall provide Party B with financial and accounting data, production and operation status data and related written explanations on a quarterly basis; Party A shall actively cooperate and voluntarily accept Party B's inspection and supervision of its production and operations, financial activities and the use of loans under this contract.

8.3 Party B has the right to inspect and understand Party A's loan payment management, capital utilization, and fund collection status, and Party A shall cooperate with Party B's monitoring of Party A's relevant accounts; Party A shall actively cooperate with and facilitate Party B's inspection, understanding, and account monitoring.

8.4 Party A shall promptly notify Party B and repay the debt and implement the guarantee as required by Party B upon occurrence of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Changes to the company's articles of association, business scope, registered capital, domicile, legal representative (person in charge), or equity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Serious difficulties in production and operations, deterioration of financial status, suspension of production, cessation of business, dissolution, liquidation, suspension of operations for rectification, revocation of business license, cancellation, or application for bankruptcy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Involvement in or potential involvement in major economic disputes, litigation, arbitration, or assets being legally sealed, frozen, seized, or supervised;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Directors, supervisors, and current senior management involved in major cases or economic disputes or being given administrative penalties by relevant departments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Liability accidents caused by violations of relevant laws and regulations on food safety, production safety, environmental protection, etc., which have or may have adverse effects on the performance of obligations under this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Other major adverse events affecting repayment ability.

8.5 During the validity of this contract, if Party A undergoes capital reduction, contracting, leasing, shareholding reform, joint venture, merger, amalgamation, division, joint venture, equity transfer, application for suspension of operations for rectification, application for dissolution, application for bankruptcy, and other major events and external investments, external guarantees, material increases in debt financing that may affect Party A's repayment ability or Party B's realization of creditor rights, Party A shall notify Party B in writing 30 days in advance and obtain Party B's consent, and shall repay debts and implement guarantees as required by Party B.

8.6 If Party A provides any person with debt guarantees, mortgages, pledges or other forms of security that may affect Party B's recovery of creditor rights, it shall obtain Party B's written consent.

8.7 Party A shall report to Party B in writing the actual use of each loan, and undertake to comply with all the provisions of Article 4 of this contract regarding loan purposes.

8.8 (Only applicable to group customer loans) Party A shall promptly notify Party B in writing of related-party transactions exceeding 10% of its net assets.

8.9 (Only applicable to guarantee-secured credit) If the guarantor under this contract becomes insolvent, ceases business, has its registration cancelled, has its business license revoked, is cancelled, goes bankrupt, or experiences other situations that cause it to partially or fully lose the guarantee capacity corresponding to this loan, Party A shall promptly provide other guarantees acceptable to Party B.

8.10 (Only applicable to mortgage/pledge-secured credit) If the value of mortgaged/pledged property under this contract decreases, is accidentally damaged or lost, or the mortgaged/pledged property is sealed, frozen, seized, occupied, or listed in the demolition scope or ownership disputes arise, Party A shall promptly notify Party B and provide other guarantees acceptable to Party B.

**9. Representations and Warranties**

Party A makes the following representations and warranties to Party B, which shall remain valid throughout the validity period of this contract:

9.1 Party A is a corporate legal person or organization established in accordance with the laws of its place of registration, holds a business license, documents or articles of association required for conducting its business at its place of registration or main business premises, and has the capacity as a debtor.

9.2 The signing of this contract has obtained all necessary authorizations or approvals, does not violate the company's articles of association or relevant laws and regulations, and is not in conflict with any other contracts already signed or currently in effect.

9.3 Party A operates legally and in compliance, has good credit status, has no record of credit violations or malicious default on bank loans, and ensures that the loan items and lending terms comply with legal requirements.

9.4 Party A has a sound organizational structure and financial management system, has not committed any major violations in its production and operations in the past year, and current senior management personnel have no major adverse records.

9.5 The loan purpose is proper and legal.

9.6 Party A guarantees to provide Party B with complete, true and valid materials in a timely manner, and to cooperate with Party B's relevant inspections of the loan. All documents, materials, reports and vouchers provided by Party A to Party B for this contract are true, complete, accurate and valid, with no false records, material omissions or misleading statements.

Financial reports provided to Party B are prepared in accordance with currently effective laws, regulations and accounting standards. Such financial reports are true, accurate, complete and valid in all material aspects, fairly reflecting Party A's financial status at the end of the relevant accounting period and operating results during that accounting period, and no material adverse changes in Party A's financial status have occurred since the date of the most recent financial report.

9.7 Party A has not concealed from Party B any events that have occurred or are occurring that may affect its financial status and repayment ability, such as those involving mediation, arbitration, litigation, compulsory execution, and violations and illegal acts that may endanger Party B's rights. If Party A experiences major adverse events affecting its repayment ability, it shall guarantee to notify Party B in a timely manner.

9.8 There are no ongoing litigation, arbitration, other administrative procedures or claims events that may affect Party A's signing or performance of this contract and repayment of the debt under this contract.

9.9 Party A has carefully read this contract and fully understands and accepts the content of this contract. Party A's signing and performance of this contract are voluntary, and all expressions of intent are genuine.

**10. Events of Default**

Upon occurrence of any of the following, Party A shall be deemed to be in default, and Party B has the right to take various default handling measures agreed upon in this contract:

10.1 Party A violates the terms of this contract, or makes false representations, warranties or undertakings under this contract.

10.2 Party A's credit status declines, or loan funds are not paid as agreed in the contract, or business and financial status deteriorates significantly, or the use of loan funds is abnormal, or entrusted payment is evaded.

10.3 Party A experiences any of the following, which has or may affect Party A's performance of its obligations under this contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any other debt is not repaid upon maturity (including those declared to be due in advance), or Party A fails to perform or violates its obligations under other agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Profitability, solvency, operational capacity and cash flow and other financial indicators deteriorate, which has or may have adverse effects on Party A's performance of its obligations under this contract, including but not limited to asset-liability ratio exceeding __/__; other indicators: __/__;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Major adverse changes occur in brand, customers, market channels, or major adverse changes occur in equity structure, production operations, and external investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Assets are sealed, frozen, seized, or subjected to compulsory execution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Involvement in or potential involvement in major economic disputes, litigation, arbitration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Being investigated by judicial authorities or tax, industry and commerce and other administrative enforcement agencies and administrative management agencies in accordance with law or being subject to penalty measures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) The legal representative, actual controller, major investors, key management personnel undergo abnormal changes or are involved in major cases or their major assets are adopted property preservation measures or are investigated by judicial authorities for suspected illegal and criminal acts or their personal freedom is restricted or other events occur that cause them to be unable to perform their duties normally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Dissolution, winding-up, liquidation, suspension of operations for rectification, revocation of business license, cancellation, or application for bankruptcy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Liability accidents caused by violations of relevant laws, regulations and regulatory provisions or industry standards on food safety, production safety, environmental protection, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Other circumstances that may adversely affect Party B's realization of creditor rights under this contract.

10.4 If the guarantors under this contract (i.e., guarantors, mortgagors, pledgors) experience any of the following, and Party A fails to separately provide new guarantees meeting Party B's requirements, this may be deemed as Party A's default:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The guarantor violates the provisions of the guarantee documents, or credit status deteriorates, or other events that reduce guarantee capacity occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The mortgagor violates the provisions of the mortgage contract, or intentionally damages the mortgaged property, or the value of the mortgaged property may or has already decreased significantly, or other events that harm Party B's mortgage rights occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The pledgor violates the provisions of the pledge documents, or the value of the pledged property has or may decrease significantly, or other events that harm Party B's pledge rights occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Failure to handle external guarantee registration, filing and other procedures with relevant authorities in accordance with legal provisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The security under this contract has undergone changes unfavorable to Party B's creditor rights (including but not limited to cases where target company shares or target assets are used as security, where Party A fails to complete target company share/target asset transfer registration procedures as agreed, and Party A fails to separately provide other guarantees acceptable to Party B.

10.5 (Applicable to group customer loans) If any of the following circumstances occurs to Party A, it shall be deemed that Party A has violated this contract, and Party B has the right to take various default handling measures agreed upon in this contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Using sham contracts with related parties, discounting or pledging accounts receivable and other creditor rights without actual trade background, to obtain funds or loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Intentionally evading bank creditor rights through related-party transactions.

**11. Default Handling**

Upon occurrence of any default event agreed in this contract, Party B has the right to take one or more of the following measures, and Party A has no objection to this:

11.1 Reduce, suspend or terminate this loan, or shorten the loan validity period.

11.2 Stop or suspend the disbursement of loans under this contract.

11.3 Call back loans already disbursed in advance and require Party A to immediately repay all debts owed to Party B under this contract.

11.4 For interest not paid on time by Party A (including interest on loans fully or partially called back by Party B in advance, penalty interest, compound interest and all other interest payable to Party B), in addition to continuing to pay, Party A shall also pay compound interest to Party B from the date the interest is due, with the compound interest rate executed at the overdue penalty interest rate specified in Article 11.5.

11.5 For overdue loan principal (including loan principal fully or partially called back by Party B in advance), overdue interest shall be calculated from the date the loan principal is overdue at the overdue penalty interest rate stipulated in this article. The overdue penalty interest rate is the sum of: (1) the loan interest rate agreed in Article 3.1 of this contract; and (2) 50% of the loan interest rate agreed in Article 3.1 of this contract.

11.6 If Party A fails to use the loan for the agreed purpose in accordance with the contract, a penalty shall be payable to Party B from the date the loan is misappropriated until the principal is fully repaid, at a rate of 100% of the loan interest rate agreed in Article 3.1 of this contract.

11.7 For loan principal overdue for three months (inclusive) or more, in addition to calculating and paying interest and overdue penalty interest and compound interest on each item in accordance with Articles 3.1, 11.4 and 11.5 of this contract and relevant provisions of this contract, Party A shall also pay Party B a delayed performance fee from the date the loan principal has been overdue for three months. The calculation formula for the delayed performance fee is: the total debt amount owed by Party A under this contract calculated as of the date the loan principal has been overdue for three months (including but not limited to loan principal, interest, penalty interest, compound interest, etc.) × 6.00%.

11.8 The right to exercise the security interest.

11.9 The right to require Party A to re-provide security acceptable to Party B.

11.10 If Party B takes judicial measures to realize its creditor rights due to default events under this contract, Party A shall bear all costs incurred by Party B in realizing its creditor rights (including but not limited to litigation fees, attorney fees, property preservation fees, travel expenses, execution fees, appraisal fees, auction fees, etc.).

11.11 If Party A fails to repay the loan principal, interest, penalty interest, compound interest and other payable amounts due (including those declared to be due in advance) as agreed, Party B has the right to deduct the corresponding amounts from all foreign currency accounts opened by Party A at Party B or Xiamen International Bank Co., Ltd. and its other branches to repay the debt, until all payable amounts under this contract are fully repaid. If the currency of the deducted funds is inconsistent with the currency of this contract, the conversion shall be made at the exchange rate published by Party B.

11.12 Refuse Party A to dispose of its funds in the corresponding amount in all foreign currency accounts (including but not limited to fund collection accounts) opened at Party B or Xiamen International Bank Co., Ltd. and its other branches, and take measures such as freezing, stopping payment, and closing non-counter transaction functions on the above accounts without prior notice.

11.13 The right to require Party A to rectify the violations or downgrade Party A's loan risk classification.

**12. Assignment of Rights and Obligations**

12.1 Party B has the right to assign part or all of its rights under this contract to a third party without the consent of Party A. After the creditor rights are assigned, the assignee shall obtain all rights related to the creditor rights.

12.2 Without Party B's written consent, Party A may not assign all or part of its rights and obligations under this contract.

**13. Effectiveness, Amendment and Termination**

13.1 This contract shall take effect from the date both parties (Party A and Party B) sign or affix seals and affix official seals. This contract shall terminate when Party A repays all loan principal, interest, penalty interest, compound interest, liquidated damages and other fees (if any) agreed under this contract.

13.2 Any amendment to this contract shall be made in writing after both parties reach agreement through negotiation. The amended terms or agreement constitute part of this contract and have the same legal effect as this contract. The original terms remain valid before the amended provisions take effect.

13.3 The amendment and termination of this contract shall not affect the right of the contracting parties to claim damages. The termination of this contract shall not affect the validity of relevant dispute resolution clauses.

**14. Applicable Law and Dispute Resolution**

The establishment, validity, interpretation, performance and dispute resolution of this contract shall be governed by the laws of the People's Republic of China (excluding the laws of Hong Kong, Macao Special Administrative Regions and Taiwan). Any disputes and controversies arising from or related to this contract shall be resolved through negotiation by both parties. If negotiation fails, the matter shall be under the jurisdiction of the people's court where Party B is located.

During the litigation period, the provisions of this contract not involved in the dispute shall continue to be performed.

**15. Other**

15.1 Guarantee documents, specific business vouchers (including but not limited to loan promissory notes, business vouchers issued by Party B unilaterally) and other legal documents related to this contract are inseparable components of this contract.

15.2 Party B's failure to exercise, partial exercise or delay in exercising any right under this contract does not constitute a waiver or change of that right or any other right, and does not affect its further exercise of that right or any other right.

15.3 The invalidity or unenforceability of any clause of this contract does not affect the validity and enforceability of other clauses, nor does it affect the overall validity of this contract.

15.4 The complete or partial invalidity of this contract does not affect the validity of the security clauses.

15.5 Terms such as 'related party', 'related-party relationship', 'related-party transactions', 'major investors' and 'key management personnel' in this contract have the same meaning as the corresponding terms in Accounting Standard for Business Enterprises No. 36 — Related Party Disclosures (Cai Kuai [2006] No. 3) issued by the Ministry of Finance.

15.6 In this contract, section headings are for reference only and do not constitute any interpretation of this contract, and do not constitute any limitation on the content and scope of the items under the heading.

**16. Other Matters Agreed by Both Parties**

Where other clauses of this contract are inconsistent with this clause, this clause shall prevail:

16.1 If Party A repays all or part of the outstanding loan before maturity, it shall obtain Party B's prior written consent.

16.2 Article 4 of this contract is amended to read: The loan under this contract is exclusively for Party A to pay freight charges, fuel costs, and highway tolls. Without the creditor's written consent, the debtor shall not divert the loan under this contract for other purposes. At the same time, the debtor undertakes and guarantees that the loan funds under this contract shall not flow into the securities market or futures market in any form, shall not be used for investment in stocks, bonds, futures, financial derivative products and asset management products, shall not be used for Party A's shareholder dividends, shall not be used for financial assets, fixed assets (including primary land development, real estate development, infrastructure project construction, etc.), equity investments; shall not be used for real estate project development or the real estate sector, shall not be used in any form to purchase or repay residential mortgage loans or other real estate mortgage loans; shall not be used for money laundering or terrorist financing; shall not be used for other purposes prohibited or restricted by law.

16.3 Under this contract, when Party A draws down for payment of freight charges, fuel costs, and highway tolls, Party A shall provide Party B with relevant purchase contracts, payment vouchers and other materials required by Party B. Party B has the right to decide whether to disburse the loan after review, and has the right to control the payment and transfer of loan funds.

16.4 Under this contract, Party B has the right to control the drawdown period for each individual loan of Party A.

16.5 Under this contract, Party A shall repay the loan principal in full and on time in the original currency of the loan as recorded on each loan promissory note upon maturity. When Party A repays the loan principal under a certain promissory note, the corresponding overdue interest must be repaid at the same time. Party B has the right to proactively deduct the principal and interest payable from Party A's account at Party B or Party B's affiliated branches.

16.6 Under this contract, the road transport business license and discharge permit held by Party A must have a valid period that covers the loan validity period of this contract; otherwise, it shall be deemed a fundamental breach of this contract by Party A.

16.7 During the period of this contract, Party A confirms that the service address, contact telephone, designated recipient and other service methods listed in the table below are true and valid service addresses/methods. In addition to the company (or the legal representative in person) signing for receipt, offices, mail rooms, property security, company colleagues and other adult co-residents signing for receipt shall also be deemed as service. The applicable scope includes notices and letters for all parties to the contract and relevant documents when disputes arise from the contract, as well as first instance, second instance, retrial, mediation, review, special civil procedure, civil supervision procedure, and execution procedure upon entering civil litigation proceedings. Party A voluntarily bears all legal consequences arising from service to the service address confirmed by Party A, designated recipient, etc. If the service address needs to be changed, Party A shall notify Party B or relevant courts and other institutions in writing. After Party B or the court and other relevant institutions receive the notice, the change of service address takes effect. Documents already sent to the original service address before Party B or the court and other relevant institutions receive the notice shall still be deemed as served.

If the service address provided or confirmed by Party A is inaccurate, if Party A fails to notify Party B and relevant courts and other institutions in writing after the service address changes, if Party A or its designated recipient refuses to sign for or other reasons cause legal documents to fail to be actually received by Party A, for mailed delivery, the document shall be deemed as delivered three days (calendar days) after the material is mailed; for direct delivery, the date recorded on the delivery receipt by the server shall be deemed as the delivery date. All notices, demands, litigation documents or other communications given to Party A by Party B or the court and other relevant institutions regarding this contract, including but not limited to emails, text messages, WeChat, QQ, fax, telegrams, and other electronic channel communications, shall be deemed as delivered to Party A upon sending, and Party A has no objection to this.

Service Address and Postal Code <u>Contact Telephone</u> <u>Designated Recipient</u> <u>Designated Recipient's Mobile</u> <br> <u>XXXXXXXXXXXXXXXXXXXXXX, Postal Code: XXXXXX</u> <u>XXXXXXXXXXX</u> <u>XXX</u> <u>XXXXXXXXXXX</u>

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;Other Service Methods |  |  |  |
| &nbsp;&nbsp;Email | &nbsp;&nbsp;XXXXXXXXXXXXXX | &nbsp;&nbsp;Fax | &nbsp;&nbsp;/ |
| &nbsp;&nbsp;SMS Mobile | &nbsp;&nbsp;XXXXXXXXXXX | &nbsp;&nbsp;WeChat | &nbsp;&nbsp;/ |
| &nbsp;&nbsp;QQ | &nbsp;&nbsp;XXXXXXXX | &nbsp;&nbsp;Other | &nbsp;&nbsp;/ |

---

**17. Copies**

This contract is made in XX copies, with Party A holding one copy and Party B holding two copies, each having equal legal effect.

**18. Declaration Clause**

The signing parties have read all the terms of this contract and have paid special attention to the bold provisions of this contract. At the request of the debtor, the creditor has provided appropriate explanations on the relevant terms of this contract. The debtor has fully understood all the meanings of the terms of this contract and the corresponding legal consequences, and voluntarily signs this contract.

Party A (Borrower): Shengfeng Logistics Group Co., Ltd. [Seal]

Party B (Lender) (Seal): Xiamen International Bank Co., Ltd. Fuzhou Branch [Seal]

Date of Signing: XXX XX, 20XX

Place of Signing: XXXXXX

Witnesses: XXX

## Exhibit 4.16

**Exhibit 4.16**

**WORKING CAPITAL LOAN CONTRACT**

Contract No.: XXX

Borrower: Shengfeng Logistics Group Co., Ltd.

Unified Social Credit Code: XXX

Legal Representative / Person in Charge: XXX

Address: XXX Postal Code: XXX

Account-opening Financial Institution & Account No.: Bank of China Co., Ltd. Fuzhou Jian'an Branch Business Department XXX

Tel: XXX Fax: XXX

Email: XXX

Lender: Bank of China Co., Ltd. Fuzhou Jian'an Branch

Legal Representative / Person in Charge: XXX

Address: XXX

Postal Code: XXX

Tel: XXX Fax: XXX

The Borrower and the Lender have reached agreement through equal negotiation on matters concerning the Lender's disbursement of working capital loans to the Borrower, and hereby enter into this Contract.

This Contract is a specific agreement under the "Credit Facility Agreement" with reference number XXX signed between Shengfeng Logistics Group Co., Ltd. and Bank of China Co., Ltd. Fuzhou Jian'an Branch.

**Article 1 Loan Amount**

Loan Currency: RMB.

Loan Amount: (In words) RMB XXX; (In figures) ¥XXX.

**Article 2 Loan Term**

Loan term: 12 months, calculated from the actual drawdown date; if drawn down in installments, calculated from the first actual drawdown date.

The Borrower shall strictly draw down funds at the agreed drawdown time. If the actual drawdown date is later than the agreed drawdown time, the Borrower shall still repay in accordance with the repayment schedule stipulated in this Contract.

**Article 3 Loan Purpose**

Loan purpose: XXX.

Without the Lender's prior written consent, the Borrower shall not change the loan purpose, including but not limited to the Borrower shall not use the loan for purchasing property or repaying residential mortgage loans, shall not use the loan for shareholders' dividends or investments in financial assets, fixed assets, or equity; shall not use the loan for any areas and purposes prohibited by laws and regulations, regulatory rules, or the State; shall not use the loan for on-lending or purchasing other financial products for arbitrage; shall not use the loan for inflating fiscal revenues; shall not use the loan for illegally adding new local government hidden debts; and other purposes prohibited by the State for bank loans.

**Article 4 Loan Interest Rate and Interest Settlement**

The Lender shall disclose the annualized interest rate of loans under this Contract to the Borrower through the "Notice of Annualized Loan Interest Rate" attached to this Contract. If the annualized interest rate of loans under this Contract is calculated only based on the loan interest rate disclosed in Clause 1 of this Article, the aforementioned "Notice of Annualized Loan Interest Rate" shall not apply.

1. Loan Interest Rate

The loan interest rate (annualized interest rate; RMB loans use simple interest; foreign currency loans use simple interest / simple-compound interest combination (choose one)) is the following type (2):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Fixed rate: annual interest rate XXX %. The interest rate remains unchanged during the loan term.

RMB loan fixed rate source: based on the Loan Prime Rate (LPR) for 1-year / 5-year or above (choose one) most recently published by the National Interbank Funding Center as of one working day before this Contract takes effect, plus / minus (choose one) XXX basis points;

Foreign currency loan fixed rate source:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The applicable benchmark rate on the effective date (T Day) of this Contract plus XXX basis points. The benchmark rate is the rate corresponding to the currency and term of the loan under this Contract as displayed on the Bloomberg Finance terminal or obtained from the Reuters information system, which is the XXX (term) USD TERM SOFR / JPY TIBOR / EUR EURIBOR / XXX rate value as of T-2 / T-3 working days. If the foreign currency benchmark rate is negative, it shall be taken as zero. Working days referred to in this paragraph mean working days at the location of the relevant currency benchmark rate management institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. (If the effective date (T Day) of this Contract is not a working day, the nearest working day before it shall be T Day) The applicable benchmark rate plus XXX basis points. The benchmark rate is the rate corresponding to the currency of the loan under this Contract as displayed on the Bloomberg Finance terminal, which is the USD overnight SOFR / GBP overnight SONIA / JPY overnight TONA / EUR overnight ESTR / CHF overnight SARON / XXX rate value as of T-5 working days. If the foreign currency benchmark rate is negative, it shall be taken as zero. Working days referred to in this paragraph mean working days at the location of the relevant currency benchmark rate management institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The latest XXX-month / XXX (foreign currency benchmark rate) obtained from the Reuters information system at 9:00 am Beijing time on one working day before the effective date of this Contract, plus XXX basis points. If the foreign currency benchmark rate is negative, it shall be taken as zero.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Floating rate: starting from the actual drawdown date (if drawn in installments, from the first actual drawdown date), with every 12 months as one floating period, repriced once. The repricing date is the corresponding date of the first month of the next floating period; if there is no corresponding date in that month, the last day of that month applies; if the floating period is daily, the repricing date is the next floating period day.

For each drawdown:

RMB loan floating rate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. During the first period (from the actual drawdown date to the last day of this floating period), the rate is based on the Loan Prime Rate (LPR) for 1-year / 5-year or above (choose one) most recently published by the National Interbank Funding Center as of one working day before the actual drawdown date, plus / minus (choose one) 20 basis points;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. On each repricing date, repriced together with other drawdowns based on the LPR for 1-year / 5-year or above (choose one) most recently published by the National Interbank Funding Center as of one working day before the repricing date, plus / minus (choose one) 20 basis points, as the applicable rate for that floating period.

Foreign currency loan floating rate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. If the term rate is applicable, the interest rate shall be determined as follows: during the first period (from the actual drawdown date to the last day of this floating period), the rate is determined based on the benchmark rate applicable on the actual drawdown date (T Day) plus XXX basis points. The benchmark rate is the rate corresponding to the currency of the loan under this Contract as displayed on the Bloomberg Finance terminal or obtained from the Reuters information system, which is the XXX (term) USD TERM SOFR / JPY TIBOR / EUR EURIBOR / XXX rate value as of T-2 / T-3 working days. On the repricing date (T Day), repriced together with other drawdowns based on the XXX (term) USD TERM SOFR / JPY TIBOR / EUR EURIBOR / XXX rate value as of T-2 / T-3 working days for the loan currency under this Contract as displayed on the Bloomberg Finance terminal or obtained from the Reuters information system, plus XXX basis points to determine the applicable rate for that floating period. The interest rate shall remain unchanged during the contract term. If the foreign currency benchmark rate is negative, it shall be taken as zero. Working days referred to in this paragraph mean working days at the location of the relevant currency benchmark rate management institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. If the overnight rate is applicable, the interest rate shall be determined as follows: on each interest calculation date (i.e., each calendar day during the loan period, same below), the applicable rate for the loan currency under this Contract is determined based on the USD overnight SOFR / GBP overnight SONIA / JPY overnight TONA / EUR overnight ESTR / CHF overnight SARON / XXX benchmark rate plus XXX basis points. The Lender shall thereafter determine the interest calculation date rate based on the benchmark rate applicable on each interest calculation date and the aforementioned spread. The interest calculation date shall determine the daily pricing benchmark rate as follows: the first rate determination date is the actual drawdown date, and subsequent rate determination dates are each interest calculation date after the first rate determination date. The benchmark rate on the rate determination date (T Day; if the rate determination date is not a working day, the nearest working day before it is T Day) is the XXX overnight SOFR / GBP overnight SONIA / JPY overnight TONA / EUR overnight ESTR / CHF overnight SARON / XXX rate value as of T-5 working days as displayed on the Bloomberg Finance terminal for the loan currency under this Contract. The spread shall remain unchanged during the contract term. If the foreign currency benchmark rate is negative, it shall be taken as zero. Working days referred to in this paragraph mean working days at the location of the relevant currency benchmark rate management institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. During the first period (from the actual drawdown date to the last day of this floating period), the rate is the latest XXX-month / XXX (foreign currency benchmark rate) obtained from the Reuters information system at 9:00 am Beijing time on one working day before the actual drawdown date, plus XXX basis points. On each repricing date, repriced together with other drawdowns based on the latest XXX (foreign currency benchmark rate) of the same floating period obtained from the Reuters information system at 9:00 am Beijing time (Beijing time) on the repricing date, plus XXX basis points, as the applicable rate for that floating period. If the foreign currency benchmark rate is negative, it shall be taken as zero.

2. Interest Calculation

(1) For the fixed rate under Clause 1(1), RMB loan floating rate under Clause 1(2), and foreign currency loan floating rates A and C under Clause 1(2):

Interest is calculated from the actual drawdown date, based on the actual drawdown amount and actual number of days used.

Interest calculation formula: Interest = Principal × Actual Number of Days × Daily Rate.

Daily rate calculation base is 360 days per year; conversion formula: Daily Rate = Annual Rate / 360.

(2) For foreign currency loan floating rate B under Clause 1(2):

Interest is calculated from the actual drawdown date, based on the actual drawdown amount and actual number of days used.

Simple interest: For portions calculated based on the pricing benchmark rate, as well as portions calculated based on the rate spread, simple interest applies.

Simple-compound interest combination: For portions calculated based on the pricing benchmark rate, daily interest for each working day = (loan principal + total accumulated interest of this portion up to the previous day) × the applicable benchmark daily rate; non-working days use simple interest. Portions calculated based on the rate spread use simple interest.

Daily rate calculation base is 360 days per year; conversion formula: Daily Rate = Annual Rate / 360.

Working days referred to above mean working days at the location of the relevant currency benchmark rate management institution.

3. Interest Settlement Method

The Borrower shall settle interest using the following method (1):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Quarterly settlement: the 20th of the last month of each quarter is the settlement date, and the 21st is the interest payment date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Monthly settlement: the 20th of each month is the settlement date, and the 21st is the interest payment date.

If the last repayment date of the loan principal is not an interest payment date, the last repayment date of the loan principal shall be the interest payment date, and the Borrower shall pay all accrued interest.

4. Penalty Interest

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For overdue loans or loans used for non-agreed purposes, from the date of default or misappropriation, penalty interest shall be charged on the overdue or misappropriated portion at the penalty interest rate stipulated in this Article, until the principal is fully repaid.

For loans that are both overdue and misappropriated, the higher penalty interest rate shall apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For interest and penalty interest that the Borrower cannot pay on time, compound interest shall be charged at the penalty interest rate stipulated in this Article based on the interest settlement method under Clause 3.

(3) Penalty Interest Rate

RMB loan penalty interest rate:

Fixed rate loan penalty interest rate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Floating rate, with floating period of XXX months / XXX years. Repriced once every floating period from the date of default or misappropriation. The repricing date is the corresponding date of the repricing month starting from the date of default or misappropriation; if there is no corresponding date in that month, the last day of that month is the repricing date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Overdue loan penalty interest rate = penalty base rate determined in item C below plus XXX %; misappropriated loan penalty interest rate = penalty base rate plus XXX %.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. During the first floating period, the penalty base rate equals the loan interest rate stipulated in Clause 1. After each floating period, the penalty base rate for the next floating period is determined based on the LPR for 1-year / 5-year or above (choose one) most recently published by the National Interbank Funding Center as of one working day before the repricing date, plus / minus (choose one) XXX basis points.

Floating rate loan penalty interest rate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The floating period of penalty interest follows the floating period of the loan interest rate stipulated in Clause 1. The repricing date for penalty interest is the corresponding date of the repricing month starting from the date of default or misappropriation; if there is no corresponding date in that month, the last day of that month is the repricing date for penalty interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Overdue loan penalty interest rate = penalty base rate determined in item C below plus 50%; misappropriated loan penalty interest rate = penalty base rate determined in item C below plus 50%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. During the first floating period, the penalty base rate is the actual loan interest rate in effect at the time of default or misappropriation; after each floating period, the penalty base rate for the next floating period is repriced on the repricing date in the manner stipulated in Clause 1.

Foreign currency loan penalty interest rate:

Fixed rate loan penalty interest rate:

Overdue loan penalty interest rate = loan interest rate stipulated in Clause 1(1) plus XXX basis points; misappropriated loan penalty interest rate = loan interest rate stipulated in Clause 1(1) plus XXX basis points.

Floating rate loan penalty interest rate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The floating period of penalty interest and the repricing date are determined in accordance with Clause 1(2). The penalty base rate during the first floating period is the actual loan interest rate in effect at the time of default or misappropriation; after each floating period, the penalty base rate for the next floating period is repriced on the repricing date in the manner stipulated in Clause 1(2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Overdue loan penalty interest rate = penalty base rate determined in item A above plus XXX basis points; misappropriated loan penalty interest rate = penalty base rate determined in item A above plus XXX basis points.

Floating rate loan penalty interest rate (interest settlement period basis):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. From the date of default or misappropriation, the penalty base rate floats according to the interest settlement period; the penalty base rate for each settlement period is the actual rate in effect during the previous settlement period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Overdue loan penalty interest rate = penalty base rate determined in item A above plus XXX basis points; misappropriated loan penalty interest rate = penalty base rate determined in item A above plus XXX basis points.

5. Other

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The "loan interest rate" and "penalty interest rate" under this Contract are both tax-inclusive interest rates; i.e., the interest collected by the Lender from the Borrower already includes VAT payable in accordance with national laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If the floating rate pricing benchmark undergoes a major change, current market rules shall apply. If the Lender requires the Borrower to sign a supplementary agreement on relevant matters, the Borrower shall cooperate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) "Pricing benchmark" and "benchmark rate" as used in this Article have the same meaning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) "TERM SOFR" under this Contract refers to the TERM SOFR published and managed by the Chicago Mercantile Exchange (or its successor manager); "TIBOR" refers to the TIBOR published and managed by the Japanese Bankers Association (or its successor manager); "EURIBOR" refers to the EURIBOR published and managed by the European Money Markets Institute (or its successor manager); "overnight SOFR" refers to the overnight SOFR published and managed by the Federal Reserve Bank of New York (or its successor manager); "overnight SONIA" refers to the overnight SONIA published and managed by the Bank of England (or its successor manager); "overnight TONA" refers to the overnight TONA published and managed by the Bank of Japan (or its successor manager); "overnight ESTR" refers to the overnight ESTR published and managed by the European Central Bank (or its successor manager); "overnight SARON" refers to the overnight SARON published and managed by the SIX Swiss Exchange (or its successor manager).

**Article 5 Conditions Precedent for Drawdown**

The Borrower must meet the following conditions before drawing down:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. This Contract and its attachments have taken effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Borrower has provided security as required by the Lender; the security agreement has taken effect and the legally required approval, registration, or filing procedures have been completed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Borrower has pre-submitted to the Lender all borrower documents, forms, specimen seals, personnel lists, signature samples, and completed relevant vouchers related to the conclusion and performance of this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Borrower has opened all accounts required by the Lender to perform this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The Borrower shall submit a written drawdown application and relevant loan purpose documentation to the Lender XXX bank working days before the drawdown, and complete the relevant drawdown procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The Borrower has submitted to the Lender resolutions and authorizations from the board of directors or other competent authorities approving the signing and performance of this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Other drawdown conditions stipulated by laws and agreed upon by both parties: XXX.

If the above conditions are not met, the Lender has the right to refuse the Borrower's drawdown application, except where the Lender agrees to disburse.

**Article 6 Drawdown Time and Method**

1. The Borrower shall draw down funds according to the following method (2):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) One-time drawdown on XXX year XXX month XXX day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Starting from XXX year XXX month XXX day, drawn down within XXX days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Installment drawdown according to the following schedule:

Drawdown Schedule:

Drawdown Date: XXX Drawdown Amount: XXX

Drawdown Date: XXX Drawdown Amount: XXX

Drawdown Date: XXX Drawdown Amount: XXX

2. The Lender has the right to refuse the Borrower's drawdown application for portions not drawn within the above time.

3. Loan Commitment Service

The Lender provides commitment services to the Borrower for loans that are currently drawable but not yet drawn ("undrawn loans") during the commitment service period (from the effective date of this Loan Contract to the drawdown date stipulated in this Contract). After negotiation between the Borrower and the Lender, the following is agreed:

The Borrower, in accordance with the principle of "fee reduction and benefit to the people", is exempt from commitment fees for the above commitment services; the estimated exempt amount is RMB XXX.

**Article 7 Loan Fund Payment**

1. Loan Disbursement Account

The Borrower has opened the following account with the Lender as the loan disbursement account; all loan disbursements and payments shall be processed through this account.

Account Name: Shengfeng Logistics Group Co., Ltd.

Account No.: XXX

2. Loan Fund Payment Method

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The loan fund payment method shall be implemented in accordance with laws and regulations, regulatory rules, and the provisions of this Contract. The payment method for single drawdowns shall be confirmed in the drawdown application. The Lender, if it determines that the payment method selected in the drawdown application does not meet requirements, has the right to change the payment method or stop the disbursement and payment of loan funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Lender-entrusted payment: the Lender, based on the Borrower's drawdown application and payment authorization, transfers loan funds through the Borrower's account to the Borrower's transaction counterparts that meet the agreed purpose of this Contract. In accordance with relevant CBIRC regulations and the Lender's internal management rules, loan fund payments meeting any one of the following conditions shall use lender-entrusted payment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Borrower has a new credit relationship with the Lender and the Borrower's credit rating does not meet the Lender's internal requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The payment recipient is clearly identified (with a clear account number and account name) at the time of the drawdown application and the single transaction amount for a certain counterpart exceeds RMB 10 million (exclusive; foreign currency is converted at the actual drawdown date exchange rate XXX);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Other circumstances stipulated by the Lender or agreed upon with the Borrower: XXX.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Borrower self-payment: the Lender disburses loan funds to the Borrower's account based on the Borrower's drawdown application, and the Borrower independently pays transaction counterparts that meet the agreed purpose. Except for circumstances where lender-entrusted payment is required as stipulated above, loan funds shall be paid using borrower self-payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Payment method change: after the drawdown application is submitted, if changes occur in the counterpart's payment conditions, credit rating, and other conditions stipulated in Clause 2(2) of this Article regarding self-payment loan funds, the loan fund payment method shall be changed. If the payment method is changed or the amount, counterpart, or purpose of the entrusted external payment changes, the Borrower shall provide the Lender with a written change request, re-submit the drawdown application, and provide relevant transaction documents certifying the fund purpose.

3. Specific Requirements for Lender-Entrusted Loan Fund Payment

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Payment authorization. For loan funds meeting lender-entrusted payment conditions, the Borrower shall clearly specify the payment authorization in the drawdown application, thereby authorizing and entrusting the Lender to directly transfer the loan funds to the Borrower's designated transaction counterpart accounts upon transferring the loan funds to the designated Borrower account, and shall provide necessary payment information including the name of the transaction counterpart, the transaction counterpart account, and the payment amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Transaction document provision. For loan funds meeting lender-entrusted payment conditions, the Borrower shall provide the Lender with its disbursement account, transaction counterpart account information, payment amount, and documentation proving that this drawdown meets the agreed purpose under this Contract. The Borrower shall ensure that all materials provided to the Lender are true, complete, and valid. If the Lender's obligation to perform entrusted payment cannot be completed in time due to inaccurate, incorrect, or incomplete transaction materials provided by the Borrower, the Lender bears no responsibility, and the Borrower's repayment obligations already incurred under this Contract shall not be affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Performance of the Lender's entrusted payment obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. For lender-entrusted payment, after the Borrower submits the payment authorization and relevant transaction materials and the Lender approves, the Lender will transfer the loan funds through the Borrower's account to the Borrower's transaction counterpart.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. If the Lender upon review discovers that the purpose documentation and other relevant transaction materials provided by the Borrower do not comply with the provisions of this Contract or have other defects, the Lender has the right to require the Borrower to supplement, replace, explain, or re-submit relevant materials. Before the Borrower submits transaction materials that the Lender deems qualified, the Lender has the right to refuse the disbursement and payment of the relevant items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. If a transaction counterpart bank rejects the transfer, causing the Lender to be unable to timely transfer loan funds to the Borrower's transaction counterpart as per the Borrower's payment authorization, the Lender bears no responsibility and the Borrower's repayment obligations already incurred under this Contract shall not be affected. For rejected items, the Lender is hereby authorized by the Borrower to freeze them. In this circumstance, the Borrower shall re-submit the payment authorization and purpose documentation and other relevant transaction materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Borrower shall not circumvent lender-entrusted payment by fragmenting payments to zero.

4. After loan funds are disbursed, the Borrower shall provide records and materials on loan fund usage as required by the Lender; the materials to be provided include but are not limited to: payment vouchers, etc.

5. Upon occurrence of any of the following circumstances, the Lender has the right to re-confirm loan disbursement and payment conditions, change the loan payment method, or stop or suspend loan disbursement and payment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Operating and financial conditions have significantly deteriorated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Borrower's credit status has declined or core business profitability is weak;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Loan funds are used abnormally or lender-entrusted payment is circumvented;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Borrower fails to provide loan fund usage records and materials in a timely manner as required by the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The Borrower violates the payment provisions of this Article;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Other serious violations of the contract.

**Article 8 Repayment**

1. The Borrower designates the following account as the fund return account; loan repayments shall be credited to this account. The Borrower shall timely provide information on the inflows and outflows of this account. The Lender has the right to require the Borrower to explain large or abnormal fund flows in and out of the return account and to monitor this account, and has the right to require the Borrower to separately sign an account management agreement for the return account.

Account Name: Shengfeng Logistics Group Co., Ltd.

Account No.: XXX

2. Unless otherwise agreed, the Borrower shall repay loans under this Contract in accordance with the following repayment plan (1):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Repay all loans under this Contract upon the loan maturity date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Repay loans under this Contract according to the following repayment schedule:

Repayment Schedule:

Repayment Date: XXX Repayment Amount: XXX

Repayment Date: XXX Repayment Amount: XXX

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Other repayment plan: XXX.

If the Borrower needs to change the above repayment plan, it must submit a written application to the Lender at least XXX bank working days before the relevant loan matures. Any changes to the repayment plan must be confirmed in writing by both parties.

3. Unless otherwise agreed, when the Borrower simultaneously owes the Lender loan principal and interest, as well as fees for enforcing creditor's rights, the Lender has the right to decide the order of repayment of principal, interest, and fees for enforcing creditor's rights; in installment repayment situations, if there are multiple matured loans or overdue loans under this Contract, the Lender has the right to decide the order of repayment for each installment; if there are multiple matured loan contracts between the Borrower and the Lender, the Lender has the right to decide the order of contract performance for each repayment.

4. Unless otherwise agreed, the Borrower may repay early, but shall notify the Lender in writing XXX bank working days in advance. Early repayment amounts shall first be applied to the loan with the latest maturity date, in reverse order.

For loans applying simple-compound interest combination, if early repayment or partial early repayment is involved, all interest corresponding to the early repayment principal shall be settled at one time.

The Lender has the right to charge early repayment penalties on the early repayment portion at the standard interest rate applicable on the early repayment date.

5. The Borrower shall repay loans using the following method (1):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Borrower shall deposit sufficient funds in the repayment account no later than XXX bank working days before each loan interest payment date; the Lender has the right to debit from this account on each loan interest payment date.

Repayment Account Name: Shengfeng Logistics Group Co., Ltd.

Account No.: XXX

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Other repayment methods agreed by both parties: XXX.

**Article 9 Security**

1. The security method for debts under this Contract is:

This Contract is a principal contract under the "Maximum Amount Guarantee Contract" with reference number XXX signed between guarantor XXX and the Lender, under which the guarantor provides maximum amount guarantee.

This Contract is a principal contract under the "Maximum Amount Mortgage Contract" with reference number XXX signed between mortgagor XXX and the Lender, under which the mortgagor provides maximum amount mortgage.

2. If events occur that the Lender considers may affect the Borrower's or guarantor's ability to perform obligations, or the security agreement becomes invalid, revoked, or released, or the Borrower's or guarantor's financial condition deteriorates or major litigation or arbitration cases are involved, or the Borrower's or guarantor's accounts are frozen, or due to other reasons violations occur under other contracts between the Borrower or guarantor and the Lender, or the security value decreases or is lost due to the collateral being damaged, destroyed, lost, or sealed, causing the security value to weaken or disappear, the Lender has the right to require, and the Borrower is obligated to provide new security, replace the guarantor, etc. to secure the performance of obligations under this Contract.

**Article 10 Invoice Issuance**

1. After the Lender confirms receipt of payment items, the Borrower may apply to the Lender for issuance of a VAT invoice (☐ VAT special invoice / VAT general invoice). After receiving the Borrower's application for issuance of a VAT invoice, the Lender will issue a VAT invoice to the Borrower.

2. The Borrower may apply for VAT invoice issuance at the relevant business handling institution or other institutions designated by the Lender.

3. The Borrower must confirm that the payment payer, contract signatory, and the buyer listed on the VAT invoice are the same taxpayer entity. If they are inconsistent, any losses resulting in the Borrower's inability to account for or lawfully deduct input tax shall be borne by the Borrower itself.

4. If the Borrower obtains the invoice and then loses it, the Lender need not re-issue a VAT invoice.

5. If the Lender provides discounts to the Borrower, the VAT invoice shall be issued at the discounted price.

6. If the Lender provides services to the Borrower free of charge, the Lender need not issue a VAT invoice.

7. When the Lender issues a VAT invoice to the Borrower, the Borrower should promptly verify the invoice information. If the invoice information is incorrect, the Borrower shall promptly apply to the Lender to re-issue the VAT invoice.

**Article 11 Representations and Warranties**

1. Borrower's Representations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Borrower is legally registered and approved by market supervision authorities or competent authorities and validly exists, with full civil rights capacity and civil conduct capacity to sign and perform this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The signing and performance of this Contract is based on the Borrower's true intention, having obtained legal and valid authorization in accordance with its articles of association or other internal management documents, and will not violate any agreement, contract, or other legal document binding on the Borrower. The Borrower has already obtained or will obtain all relevant approvals, permits, filings, or registrations required for signing and performing this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) All documents, financial statements, vouchers, and other materials provided by the Borrower to the Lender under this Contract are true, complete, accurate, and valid;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The transaction background for the Borrower's application to the Lender for business operations is genuine and lawful, not involving money laundering, terrorist financing, proliferation financing of weapons of mass destruction, tax evasion, fraud, or other illegal purposes, and not violating applicable sanctions regulations of the United Nations, China, or other applicable jurisdictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The Borrower has not concealed from the Lender any events that may affect its or the guarantor's financial condition and ability to perform obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) The Borrower and loan projects meet national environmental standards, and are not enterprises and projects with prominent energy consumption and pollution problems identified and announced by relevant national authorities that have failed to rectify; there are no energy consumption or pollution risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) The loan purpose and repayment source are genuine and lawful;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Other matters stated by the Borrower: XXX.

2. Borrower's Undertakings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) As required by the Lender, periodically or timely submit financial statements (including but not limited to annual, quarterly, and monthly reports) and other relevant materials to the Lender. The Borrower ensures continuous compliance with the following financial indicator requirements: A. The Borrower's most recent single and consolidated financial statements show an asset-liability ratio no higher than 65% and a current ratio no lower than 1; B. The Borrower's working capital loan balance does not exceed RMB 400 million and does not exceed 25% of consolidated annual revenue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If the Borrower has already or will sign a counter-guarantee agreement or similar agreement with the guarantor under this Contract regarding its guarantee obligations, the agreement will not harm the Lender's any rights under this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Cooperate with the Lender in loan payment management and post-loan management, accept the Lender's credit inspections and supervision, and provide sufficient assistance and cooperation. For self-payment by the Borrower, the Borrower shall accept and cooperate with the Lender's inspections and supervision through account analysis, voucher inspection, on-site investigation, and other methods to verify whether loan payments comply with the agreed purpose and whether there are situations of fragmenting payments to zero to circumvent entrusted payment. The Borrower shall periodically report to the Lender on loan fund payments and usage as required; specific reporting frequency: monthly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Before undertaking major events that may affect the Borrower's repayment ability, such as mergers, divisions, capital reductions, equity transfers, external investments, providing external guarantees, material increases in debt financing, and major asset and creditor's rights transfers, the Borrower must first obtain the Lender's written consent;

If any of the following situations occur, the Borrower shall promptly notify the Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Changes in the Borrower's or guarantor's articles of association, business scope, registered capital, or legal representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Changes in business operations such as joint operations, foreign joint ventures, cooperation, contract operations, reorganizations, restructurings, or planned public listings of any form;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Involvement in major litigation or arbitration cases, or assets or collateral being sealed, seized, or monitored, or new security being established on collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Suspension of business, dissolution, liquidation, suspension for rectification, revocation, cancellation of business license, or (being) subject to bankruptcy proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Shareholders, directors, and current senior management involved in major cases or economic disputes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Default events under the Borrower's other contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Occurrence of operational difficulties and financial deterioration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Other material adverse events affecting the Borrower's repayment ability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The Borrower's repayment priority to the Lender's debts is superior to the Borrower's debts to its shareholders, and is not inferior to similar debts to other creditors. Moreover, from the effective date of this Contract until the loans, interest, and related fees under this Contract are fully repaid, the Borrower shall not repay debts owed to its shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) When the after-tax net profit for the relevant accounting year is zero or negative, or when after-tax profits are insufficient to make up for accumulated losses from prior accounting years, or when pre-tax profits are not used to repay the principal, interest, and fees due under this Contract in the current accounting year, or when pre-tax profits are insufficient to repay the next installment of principal, interest, and fees, the Borrower shall not distribute dividends or bonuses to shareholders in any form;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) The Borrower shall not dispose of its own assets in a manner that reduces its repayment ability. The Borrower undertakes that the total amount of external guarantees provided shall not exceed 2 times its net assets, and the total amount and single-item amount of external guarantees shall not exceed the limits stipulated in its articles of association;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Except for uses agreed in this Contract or approved by the Lender, the Borrower shall not transfer loan funds under this Contract to accounts under the same name or affiliated party accounts;

For transfers to the Borrower's own-name accounts or affiliated party accounts, the Borrower shall provide relevant certification materials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Under loans under this Contract, the security conditions, loan interest rate pricing, repayment priority, and other loan conditions provided to the Lender shall not be lower than those currently or to be given to any other financial institution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) The Lender has the right to recover loans early based on the Borrower's fund return status;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) The Borrower shall submit to the Lender its environmental (climate), social, and governance risk reports. The Borrower declares and warrants to strengthen environmental (climate), social, and governance risk management, and undertakes to accept the Lender's supervision. If the Borrower violates the foregoing provisions, it constitutes or shall be deemed a default event under this Contract, and the Lender may take default remedy measures in accordance with this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Cooperate with the Lender in conducting due diligence work, cooperate in providing and updating information on this institution and its beneficial owners, and provide relevant transaction background information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) The Lender has the right to participate in major financing, asset disposals, mergers, divisions, equity restructuring, bankruptcy liquidation, and other activities involving the Borrower in accordance with laws and regulations to protect the Lender's creditor's rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) Provide complete, true, and valid materials to the Lender in a timely manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) Other matters undertook by the Borrower: if the Borrower newly adds external financing, provides external guarantees (including letters of guarantee, mortgages, etc.), plans shareholder dividends, or plans to repay shareholder loans, the Borrower must notify the Lender in advance and obtain the Lender's consent; the Lender has the right to adjust the credit strategy accordingly.

**Article 12 Related-Party Transaction Disclosure Within the Group**

Both parties agree that the following Clause 2 applies:

1. The Borrower does not belong to a group customer as determined by the Lender in accordance with the "Guidelines on Risk Management of Credit Business for Group Customers by Commercial Banks" (CBRC Order No. 4 of 2010) (hereinafter "the Guidelines").

2. The Borrower belongs to a group customer as determined by the Lender in accordance with the Guidelines. The Borrower shall promptly report to the Lender related-party transactions involving 10% or more of net assets, including the related party relationships of all transaction parties, the nature of the transaction, the amount or proportion of the transaction, and pricing policies (including transactions with no consideration or only nominal consideration).

Upon occurrence of any of the following situations, the Lender has the right to unilaterally decide to stop disbursing loans already approved but not yet disbursed, and to recover part or all of the loan principal in advance: using fictitious contracts with related parties and accounts receivable and other creditor's rights without actual trade backgrounds for bank discounting or pledge to obtain bank funds; undertaking large-scale mergers, acquisitions, and reorganizations that the Lender considers may affect the safety of the loans; intentionally evading bank creditor's rights through related-party transactions; other circumstances stipulated in Article 18 of the Guidelines.

**Article 13 Default Events and Handling**

Any of the following constitutes or shall be deemed a default event by the Borrower under this Contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Borrower fails to perform its payment and repayment obligations to the Lender in accordance with this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Borrower uses loan funds in a manner not in accordance with this Contract or uses funds obtained not in accordance with the purposes agreed in this Contract; or the Borrower uses loan funds for on-lending or purchasing other financial products for arbitrage; or the Borrower uses loan funds to inflate fiscal revenues; or the Borrower illegally adds new local government hidden debts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The representations made by the Borrower in this Contract are untrue, or the Borrower fails to comply with the undertakings made in this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The situations stipulated in Article 11, Clause 2(4) occur, and the Lender considers that the Borrower's or guarantor's financial condition and ability to perform obligations may be affected, while the Borrower fails to provide new security or replace guarantors as required by this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The Borrower's credit status has declined;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The Borrower's profitability, solvency, operating ability, and cash flow, and other financial indicators have deteriorated and breached the indicators agreed in this Contract or other financial undertakings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Default events occur under other contracts between the Borrower and the Lender or other institutions of Bank of China Co., Ltd.; default events occur under credit contracts between the Borrower and other financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. The guarantor violates the provisions of the guarantee agreement, or default events occur under other contracts between the guarantor and the Lender or other institutions of Bank of China Co., Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. The Borrower ceases business operations or dissolution, revocation, or bankruptcy events occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. The Borrower is involved in or may be involved in major economic disputes, litigation, or arbitration, or its assets are sealed, seized, or subject to compulsory enforcement, or the Borrower is investigated or penalized by judicial authorities, tax authorities, industrial and commercial authorities, or other administrative authorities pursuant to law, which has or may affect the Borrower's performance of obligations under this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Major unusual changes in the Borrower's key investors, key management personnel, loss of contact, or being investigated or having personal freedom restricted by judicial authorities, which has or may affect the Borrower's performance of obligations under this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. When the Lender conducts annual reviews of the Borrower's financial condition and ability to perform obligations (i.e., one year after the effective date of this Contract), situations are found that may affect the Borrower's or guarantor's financial condition and ability to perform obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. Large or abnormal fund inflows and outflows occur in the designated return account, and the Borrower cannot provide explanatory materials accepted by the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. Energy conservation projects are seriously delayed; severe defects appear in energy-saving technologies and equipment; major facilities or equipment shut down leading to significant decreases in energy load; actual energy savings are significantly lower than projected; energy conservation proceeds cannot be timely returned to the designated account; the Borrower participates in private high-interest lending, provides external guarantees or raises new funds without the Lender's consent, and major financial indicators have seriously deteriorated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. The Borrower refuses to cooperate with the Lender in conducting due diligence investigations; the Borrower or its transaction / trading counterparts are suspected of money laundering, terrorist financing, nuclear weapons proliferation, sanctions violations, or other illegal activities, or the Borrower or guarantor is listed on sanction lists of the United Nations, China, or other applicable jurisdictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. The Borrower violates other provisions in this Contract regarding the rights and obligations of the parties.

When any of the above default events occurs, the Borrower shall bear default liability, and the Lender has the right to take the following measures separately or simultaneously depending on the specific circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Require the Borrower and guarantor to rectify their default behavior within a time limit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Fully or partially reduce, suspend, cancel, or terminate the Borrower's credit facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Fully or partially suspend or terminate acceptance of the Borrower's drawdown and other business applications under this Contract, and other contracts between the Borrower and the Lender; for loans not yet disbursed and trade finance not yet processed, fully or partially suspend, cancel, or terminate disbursement, payment, and processing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Declare all or part of the outstanding loans / trade finance amounts under this Contract and other contracts between the Borrower and the Lender immediately due and payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Adjust the loan interest rate and charge penalty interest under this Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Adjust the loan payment method, such as changing self-payment to entrusted payment, lowering the threshold for entrusted payment, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Downgrade the risk classification of all credit assets under this Contract and other contracts between the Borrower and the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Terminate or release this Contract, and fully or partially terminate or release other contracts between the Borrower and the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Require the Borrower to compensate for losses caused to the Lender due to the default, including but not limited to litigation fees, attorney fees, notarization fees, enforcement fees, and other related expenses for enforcing creditor's rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Deduct funds from accounts opened by the Borrower with the Lender and other institutions of Bank of China Co., Ltd. to repay all or part of the obligations owed by the Borrower to the Lender under this Contract. Amounts not yet due in accounts shall be deemed due in advance. If the account currency differs from the Lender's business pricing currency, conversion shall be at the applicable foreign exchange rate of the Lender at the time of deduction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Exercise security rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Require the guarantor to assume guarantee obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. Other measures the Lender considers necessary and possible.

**Article 14 Reservation of Rights**

If one party fails to exercise part or all of the rights under this Contract, or fails to require the other party to perform, assume part or all of its obligations and responsibilities, it does not constitute that party's waiver of such rights or exemption from such obligations and responsibilities.

Any tolerance, extension, or delayed exercise of rights under this Contract by one party against the other shall not affect any rights it enjoys under this Contract and laws and regulations, nor shall it be deemed a waiver of such rights.

**Article 15 Amendment, Modification, and Termination**

This Contract may be amended or modified in writing upon agreement of both parties, and any amendments or modifications constitute inseparable components of this Contract.

Unless otherwise required by laws and regulations or agreed upon by the parties, this Contract shall not be terminated before all rights and obligations thereunder are fully performed.

Unless otherwise required by laws and regulations or agreed upon by the parties, the invalidity of any clause of this Contract shall not affect the legal validity of other clauses.

**Article 16 Applicable Law and Dispute Resolution**

This Contract is governed by the laws of the People's Republic of China (for the purposes of this Contract, not including the laws of the Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan).

After this Contract takes effect, all disputes arising from or in connection with the conclusion or performance of this Contract may be resolved through negotiation. If negotiation fails, either party may resolve the dispute using the following method (2):

1. Arbitration. Submit to:

China International Economic and Trade Arbitration Commission

Beijing Arbitration Commission (Beijing International Arbitration Centre)

XXX Arbitration Commission

Arbitration shall be conducted at XXX (place of arbitration) in accordance with the valid arbitration rules of the commission at the time the arbitration application is submitted. The arbitral award is final and binding on both parties.

2. Litigation. The parties may choose to resolve the dispute through litigation before Chinese courts:

File a lawsuit with the people's court at the location of the Lender or the location of the Bank of China Co., Ltd. institution exercising rights and obligations under this Contract;

File a lawsuit with the International Commercial Court of the Supreme People's Court (for international commercial disputes with a subject matter of RMB 300 million or more);

File a lawsuit with the people's court with jurisdiction.

During the dispute resolution period, if the dispute does not affect the performance of other clauses of this Contract, those other clauses shall continue to be performed.

**Article 17 Attachments**

The following attachments and other attachments jointly confirmed by both parties constitute inseparable components of this Contract and have the same legal effect as this Contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Drawdown Application (form);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Notice of Annualized Loan Interest Rate (form).

**Article 18 Other Provisions**

1. Without the Lender's prior written consent, the Borrower shall not transfer any rights or obligations under this Contract to a third party.

2. If the Lender needs to entrust other institutions of Bank of China Co., Ltd. to exercise rights and obligations under this Contract due to business needs, or to transfer the loan business under this Contract to other institutions of Bank of China Co., Ltd. for acceptance and management, the Borrower acknowledges and agrees. Other Bank of China Co., Ltd. institutions authorized by the Lender, or Bank of China Co., Ltd. institutions accepting the loan business under this Contract, have the right to exercise all rights under this Contract, and have the right to file lawsuits, submit to arbitration, or apply for compulsory enforcement with courts in the name of such institutions in connection with disputes under this Contract.

3. Without affecting other provisions of this Contract, this Contract shall be legally binding on both parties and their respective heirs and assignees arising from applicable law.

4. Unless otherwise agreed, both parties designate the addresses stated in this Contract as communication and contact addresses, confirmed by both parties as valid delivery addresses. The scope of delivery address application includes all notices and contract documents during the performance of this Contract by both parties, as well as the delivery of relevant documents and legal documents in connection with disputes arising from this Contract (including but not limited to all stages of arbitration, civil litigation procedures including first instance, second instance, trial supervision, jurisdictional objections and reconsideration, retrial, and enforcement proceedings). Legal documents include but are not limited to various notices, arbitral awards, judgments, rulings, conciliation statements, and mediation letters.

The Borrower agrees that the Lender or arbitration institutions and courts may send faxes and emails to the Borrower listed in this Contract to deliver relevant documents and legal documents in electronic form.

When both delivery addresses and electronic delivery methods are agreed upon, either method may be chosen; delivery to the Borrower's designated address and electronic delivery have equal legal effect. If multiple delivery methods are used for the same item or legal document, all are valid, with the earliest delivery date as the date of delivery.

If the delivery address or method changes, the changing party shall notify the other party in writing XXX working days in advance. During arbitration and civil litigation procedures, any change of address or method shall fulfill the obligation of notifying the arbitration institution and court of the change of delivery address or method. If one party fails to fulfill the notification obligation as required, the delivery address or method confirmed in this Contract shall still be deemed valid.

If, due to inaccurate delivery address or method provided or confirmed by one party, untimely notification of change of delivery address or method, refusal by the designated recipient to accept delivery, or other reasons, legal documents cannot be actually received by one party: for mailed delivery, the date the document is returned shall be deemed the delivery date; for personal delivery, the date the deliverer notes the circumstances on the delivery receipt shall be deemed the delivery date; for electronic delivery, the date the document automatically enters the Borrower's designated system shall be deemed the delivery date.

The provisions in this clause regarding delivery addresses and methods for relevant documents and legal documents constitute the conditions for confirmation of valid delivery addresses independently existing in this Contract; if this Contract is fully or partially confirmed as invalid or revoked, this clause shall continue to be valid.

5. Transactions under this Contract are conducted based on the independent interests of both parties. As required by relevant laws, regulations, and regulatory requirements, the other parties forming related parties of the Lender under other transactions shall not seek to use such related party relationships to affect the fairness of transactions.

6. The headings and business names in this Contract are used only for convenience of reference and shall not serve as the basis for interpreting the content and rights and obligations of the parties.

7. In accordance with laws and regulations, given that the Borrower applies to the Lender for financial products or services related to the credit facility, the Borrower agrees and authorizes the Lender to collect, query, store, use, process, transmit, provide, and delete the following information about the Borrower during relevant financial product and service due diligence, review and approval, business processing, financing disbursement, post-loan management, collateral registration and disposal, and overdue collection processes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Borrower's relevant information in the Financial Credit Information Basic Database and other credit information databases established pursuant to law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Borrower's industrial and commercial registration information, customs import and export information, tax information, invoice information, financial information, water and electricity fee payment status and data, payroll agency information, telecommunications fee payment information, POS collection data, internet credit information, payment and settlement information, mortgage information, and other relevant information of this entity held by third-party institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Borrower's public security case information, litigation or arbitration information, asset sealing / seizure / compulsory enforcement situations, court litigation judgments, arbitral awards, administrative penalties, social insurance payment situations, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Information generated or obtained in the course of the Lender providing financial products or services to the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) For the avoidance of doubt, relevant information does not include any information obtainable through public channels.

The Borrower agrees and authorizes the Lender to collect, query, store, use, process, transmit, provide, and delete the above information, specifically including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Querying the Borrower's relevant information through the Financial Credit Information Basic Database and other credit information databases established pursuant to law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Providing information related to this Contract and other relevant information of the Borrower to the Financial Credit Information Basic Database and other credit information databases established pursuant to law, for qualified institutions or individuals to query and use pursuant to law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Sharing the above relevant information internally among Bank of China Co., Ltd. group members to meet the needs of post-loan management and legal and regulatory requirements for unified credit management of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Providing the above relevant information to relevant third-party institutions as needed for credit facility business processing, overdue debt collection, creditor's rights transfer, and post-loan management.

This authorization is valid until the date when the Borrower has fully settled all credit facilities within the scope of the Lender's group.

8. If the drawdown date or repayment date falls on a weekend or statutory holiday and other non-working days, it shall be postponed to the first working day after the non-working day.

9. If the Lender cannot perform this Contract or cannot perform this Contract as agreed due to changes in laws and regulations or regulatory provisions or regulatory authority requirements, the Lender has the right to terminate or change the performance of this Contract in accordance with changes in laws and regulations or regulatory provisions or regulatory authority requirements. If this Contract is terminated or changed due to such reasons causing the Lender to be unable to perform or unable to perform this Contract as agreed, the Lender shall be exempt from liability.

10. The Borrower may consult and complain about this Contract and business and charges under this Contract through the Lender's contact telephone number listed in this Contract.

**Article 19 Contract Effectiveness**

This Contract takes effect upon signature by the legal representatives (responsible persons) or their authorized signatories of both the Borrower and the Lender and affixing the official seals.

This Contract is made in XXX copies; the Borrower and the Lender each hold XXX copy, all having equal legal effect.

Borrower: Shengfeng Logistics Group Co., Ltd.

Authorized Signatory: XXX

Date: XXX

Lender: Bank of China Co., Ltd. Fuzhou Jian'an Branch

Authorized Signatory: XXX

Date: XXX

Attachment Notice of Annualized Loan Interest Rate

Reference No.: XXX

To: XXX (Borrower)

1. Our institution has signed a "Working Capital Loan Contract" with reference number XXX with your company. Under the aforementioned contract, the annualized interest rate of loans provided by our institution to your company is XXX. This annualized interest rate (simple interest / simple-compound interest combination (choose one)) includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Loan interest calculated based on the loan interest rate stipulated in Article 4, Clause 1 of the aforementioned contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Various fees directly related to the loan as stipulated in Clause XXX of the aforementioned contract; (delete if not applicable)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Various fees directly related to the loan as stipulated in the agreement with reference number XXX separately signed by your company with our institution. (delete if not applicable)

2. This notice, as an attachment to the aforementioned contract, constitutes an inseparable component thereof, has the same legal effect as the aforementioned contract, and matters not specified herein are governed by the aforementioned contract.

Lender: XXX

Authorized Signatory: XXX

Date: XXX

## Exhibit 4.17

**Exhibit 4.17**

Important Notice:

Dear Customer, to protect your company's interests, please carefully read the full text of this Agreement before signing, especially the clauses in bold. If you have any questions, please promptly ask us for clarification. If your company still has doubts or uncertainties, please consult your lawyers and relevant professionals.

**CREDIT FACILITY AGREEMENT**

(Applicable to working capital loans where no separate loan agreement is required)

(Applicable to working capital loans where no separate loan agreement is required)

Reference No.: XXX

Credit Grantor: China Merchants Bank Co., Ltd. Fuzhou Branch (hereinafter referred to as Party A)

Credit Applicant: Shengfeng Logistics Group Co., Ltd. (hereinafter referred to as Party B)

Upon Party B's application, Party A agrees to provide Party B with a credit facility for Party B's use. Party A and Party B hereby reach agreement on the following terms in accordance with relevant laws and after full negotiation, and enter into this Agreement.

**1. Credit Facility Amount**

1.1 Under this Agreement, Party A shall provide Party B with a credit facility of RMB (in words) XXX (including revolving and/or one-time facility amounts). Party B may apply for specific business in other currencies within the credit facility (exchange rates shall be converted at Party A's published foreign exchange rates at the time of the specific transaction).

Party A (or Party A's subordinate institution) and Party B previously signed an agreement with reference number XXX titled "Credit Facility Agreement (Applicable to working capital loans where no separate loan agreement is required)" (fill in agreement name here). The outstanding balance of specific businesses conducted under that agreement shall automatically be incorporated under this Agreement and directly occupy the credit facility under this Agreement.

1.2 The credit period is XXX months, from XXX to XXX. Party B shall submit an application to Party A for use of the credit facility within this period to handle specific credit transactions. Party A will not process applications submitted by Party B beyond the credit expiry date, except as otherwise provided in this Agreement.

1.3 Credit facility products include but are not limited to loans / order loans, trade finance, bill discounting, commercial bill acceptance, commercial acceptance bill discounting / guarantee, domestic / international letters of guarantee, customs duty payment guarantees, corporate account overdrafts, derivative transactions, gold leasing, and other credit products.

"Trade Finance" includes but is not limited to international / domestic letters of credit, import bill financing, delivery guarantee, import collection bill financing, packing loans, export bill financing, export negotiation, export collection bill financing, import / export remittance financing, Sinosure financing, factoring, bill guarantee payment, and other products.

1.4 Revolving facility refers to the maximum outstanding balance of one or more of the aforementioned credit products that Party A provides to Party B during the credit period on a continuous, revolving basis.

One-time facility refers to the cumulative amount of all types of credit products that Party A provides to Party B during the credit period, which shall not exceed the approved one-time credit facility amount. Party B may not use the one-time credit facility on a revolving basis; the amounts of multiple credit transactions applied for by Party B shall occupy the one-time credit facility amount cumulatively until fully utilized.

**2. Utilization Arrangement of Credit Facility**

2.1 Specific credit transactions approved by Party A upon Party B's application during the credit period shall automatically be incorporated under this Agreement and occupy the credit facility under this Agreement.

2.2 If Party A handles factoring business with Party B as the payment obligor, the creditor's rights against Party B that Party A receives from third parties, or based on debt instruments / unconditional payment undertakings signed by Party B, shall occupy the above credit facility; if Party B applies to Party A to handle factoring business with Party B as the payee (accounts receivable creditor / creditor under debt instrument or payment undertaking), the purchase amount (receivables purchase) that Party A pays to Party B using its own funds or other legally sourced funds to purchase accounts receivable / debt instruments or creditor's rights under payment undertakings held by Party B shall occupy the above credit facility.

2.3 When Party A, based on its internal process requirements, entrusts other China Merchants Bank branches to transfer letters of credit to beneficiaries after issuing them, the issuance and any bill financing and delivery guarantee transactions thereunder shall occupy the above credit facility.

When handling import letter of credit issuance, if import bill financing subsequently occurs under the same letter of credit, the import letter of credit and the import bill financing shall occupy the same facility amount at different stages. That is, when import bill financing occurs, the facility amount restored after the letter of credit makes external payment and re-used for import bill financing shall be deemed to occupy the same facility as the original import letter of credit.

2.4 When Party B applies to Party A to open a letter of guarantee with a third party as the guaranteed party, such transaction shall occupy the above credit facility. Party B also confirms that it bears the primary repayment obligation for any advance principal balance, interest, penalty interest, compound interest, liquidated damages, and delay performance fees formed by Party A's performance of the guarantee obligation under such letter of guarantee.

**3. Approval and Use of Credit Facility**

3.1 The type of credit facility under this Agreement (revolving or one-time), applicable credit products, specific credit facility amounts for each product, whether inter-product adjustments are allowed, and specific usage conditions shall all be subject to Party A's approval. If Party A adjusts its original approval based on Party B's application during the credit period, subsequent approvals by Party A shall constitute supplements and amendments to the original approval, and so on.

3.2 Party B must submit a written application to use the credit facility and provide materials required by Party A. Party A will approve each application after review and has the right to comprehensively consider its internal management requirements and Party B's operating conditions in deciding whether to approve. Party A has the right to unilaterally refuse Party B's application without bearing any form of legal liability to Party B. If this clause conflicts with other relevant provisions of this Agreement, this clause shall prevail.

3.3 After Party A's approval, when handling specific credit transactions, the specific business documents signed by Party A and Party B (including but not limited to single agreements / applications, framework agreements or specific business contracts) shall constitute inseparable components of the "Credit Facility Agreement". The specific amount, interest rate, term, purpose, fees, and other business terms of each loan or other credit transaction shall be determined by the specific business documents, business vouchers confirmed by Party A (including but not limited to drawdown applications, loan notes (if any)), and Party A's system business records. Unless otherwise stipulated in the specific business documents, Party A-confirmed business vouchers (including but not limited to loan notes), and Party A's system business records regarding interest rates, interest under this Agreement shall be calculated using the simple interest method.

For working capital loans applied by Party B within the credit facility, Party A and Party B do not need to separately sign a "Loan Agreement". When Party B applies to use funds, it shall submit drawdown applications one by one, and Party A shall approve them one by one.

3.4 Party A has the right to periodically or non-periodically adjust the benchmark interest rate or interest rate pricing method for loans / other credit under this Agreement based on changes in national policies, domestic and overseas market conditions, or its own credit policies. Such adjustments shall take effect after Party A notifies Party B (notification methods include announcement at Party A's outlets or on China Merchants Bank's official website, or sending notice to Party B via any contact address / method reserved in this Agreement). If Party B does not accept the adjustment, it may repay early; otherwise, Party B is deemed to have accepted and shall implement per the notice.

If this clause conflicts with other relevant provisions of this Agreement, this clause shall prevail.

3.5 The usage period of each loan or other credit under the credit facility shall be specifically determined based on Party B's operational needs and Party A's business management rules. The maturity date of each specific transaction may be later than the credit facility expiry date (except where Party A has other requirements).

3.6 During the credit period, Party A has the right to periodically evaluate Party B's operations and financial condition each year, and adjust the credit facility available to Party B based on the evaluation results.

**4. Working Capital Loan Interest Rate Terms**

4.1 The interest rate of any single loan under this Agreement shall be confirmed by Party B in the corresponding drawdown application and approved by Party A. If the drawdown application is inconsistent with the loan note (if any) or Party A's system records for that loan, the loan note (if any) or Party A's system records shall prevail.

4.2 If Party B uses the loan not in accordance with the agreed purpose under this Agreement, penalty interest shall be charged on the portion used for non-agreed purposes from the date of change of use at a rate of the original interest rate plus XXX%. The original interest rate refers to the interest rate applicable to the loan before its purpose was changed.

If Party B fails to repay the loan on time, penalty interest (default interest) shall be charged on the unpaid portion from the date of default at the original interest rate plus XXX% (overdue loan interest rate). The original interest rate refers to the rate applicable to the loan before maturity (if it is a floating rate, it refers to the rate applicable in the last floating period before the loan maturity date (including early maturity date)).

If a loan is simultaneously overdue and used for non-agreed purposes, the higher of the above two rates shall apply for interest calculation.

4.3 If the People's Bank of China adjusts loan interest rate regulations during the loan period, the relevant People's Bank of China regulations shall apply.

4.4 If the loan maturity date falls on a holiday, the loan shall automatically be extended to the first working day after the holiday, and interest shall be calculated based on the actual number of days the loan funds are occupied.

4.5 Party B must pay interest on each interest settlement date. Party A may directly deduct the interest due from any account Party B has with China Merchants Bank. If the last repayment date of a loan's principal is not an interest settlement date, the last repayment date of the loan principal shall be the interest payment date, and the borrower shall settle all interest payable corresponding to the principal on that date. If Party B fails to pay interest on time, compound interest shall be calculated on the outstanding interest (including penalty interest) in accordance with the overdue loan interest rate stipulated in this clause.

**5. Security Terms**

5.1 For all debts owed by Party B to Party A under this Agreement, Party B or a third party recognized by Party A shall provide property mortgage / pledge security or joint and several guarantee. Party B or the third party acting as guarantor shall separately issue or sign security documents as required by Party A.

5.2 If the guarantor fails to sign the security documents and properly complete the security procedures as required by this clause (including submitting objections by the accounts receivable debtor regarding accounts receivable pledged before the pledge), Party A has the right to refuse to extend credit to Party B.

5.3 Where the mortgagor provides real estate mortgage security for all debts owed by Party B to Party A under this Agreement, if Party B becomes aware that the mortgaged property has been or may be included in the government's demolition or expropriation plans, Party B shall immediately notify Party A and urge the mortgagor to continue providing security for Party B's debts with the compensation provided by the demolition party pursuant to the mortgage agreement and promptly complete the corresponding security procedures, or provide other security measures recognized by Party A as required by Party A.

**6. Party B's Rights and Obligations**

6.1 Party B enjoys the following rights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.1 The right to require Party A to provide loans or other credit within the credit facility under the conditions stipulated in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.2 The right to use the credit facility as agreed in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.3 The right to require Party A to keep confidential the production, operation, assets, accounts, and other information provided by Party B, except as otherwise provided in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.4 After obtaining Party A's written consent, the right to transfer debts to a third party.

6.2 Party B undertakes the following obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1 To truthfully provide documents and materials required by Party A (including but not limited to periodically providing true financial books / reports and annual financial reports, major decisions and changes in production, operations, and management, drawdown / fund usage materials, materials related to collateral, etc.), as well as information on all bank accounts and deposit balances, and to cooperate with Party A's investigations, reviews, and inspections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2 To accept Party A's supervision of its use of credit funds and related production, operating, and financial activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3 To use loans and / or other credit in accordance with the purposes stipulated in this Agreement and the specific business documents and / or as committed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.4 To repay the principal, interest, and fees of loans, advances, and other credit debts on time and in full as stipulated in this Agreement and specific business documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.5 To obtain Party A's written consent before transferring all or part of the debts under this Agreement to a third party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6 If any of the following events occur, Party B shall immediately notify Party A and actively cooperate with Party A in implementing measures to ensure the safe repayment of principal and interest and all related fees of loans, advances, and other credit debts under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.1 Major financial losses, asset losses, or other financial crises;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.2 Providing loans or guarantees for the benefit of or to protect third parties from losses, or providing mortgage (pledge) security with own property (rights);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.3 Suspension of operations, revocation or cancellation of business license, application for or being subject to bankruptcy, dissolution, and other situations, or major changes in enterprise information such as company name, registered address, place of business, beneficial owner, and other information changes; or changes in the borrower's controlling shareholders / actual controllers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.4 Major crises in the operations or finances of controlling shareholders or other affiliated companies or actual controllers affecting normal operations, or abnormal personnel changes in legal representatives / principal responsible persons / directors or important senior management, or being punished / restricted in personal freedom by national authorities due to violations of laws or discipline, or being missing for more than 7 days, which may affect normal operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.5 Related-party transactions with controlling shareholders, other affiliated companies, or actual controllers involving amounts reaching 10% or more of Party B's net assets (Party B's notification shall at least cover the related relationships of the transaction parties, the nature of the transaction, the amount or proportion of the transaction, and pricing policies (including transactions with no consideration or only nominal consideration));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.6 Any litigation, arbitration, criminal, or administrative penalties that may have major adverse consequences on its operations or property status;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.7 Party B or its actual controllers have large-scale private high-interest lending behaviors; or adverse credit records such as revolving debts, overdue payments, or interest arrears at other financial institutions; or fund chain breaks within affiliated enterprises, triggering a debt crisis; or Party B / its key stakeholders / Party B's subsidiaries have money laundering, terrorist financing, or sanctions compliance risks, or may bring money laundering, terrorist financing, or sanctions compliance risks to Party A; or Party B's projects are suspended, delayed, or have major investment errors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6.8 Other major events that may affect Party B's or its controlling shareholders' / actual controllers' ability to repay debts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.7 Not to neglect the management and pursuit of its due creditor's rights, or to dispose of existing major assets at no consideration or in other inappropriate ways;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.8 Party B must first obtain Party A's written consent before undertaking major events such as mergers (acquisitions), divisions, reorganizations, joint ventures (cooperation), equity transfers, equity restructuring, external investments, increase in debt financing, and other major events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.9 In the case of accounts receivable pledges, Party B guarantees that the credit balance at any point during the credit period is less than XXX% of the pledged accounts receivable balance; otherwise Party B must provide new accounts receivable recognized by Party A for pledge or deposit a guarantee deposit (the guarantee deposit account number is subject to the automatic generation or records in Party A's system at the time of deposit, same below), until pledged accounts receivable balance × XXX% + valid guarantee deposit > credit balance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.10 Where Party B (or other third parties) provides guarantee deposits, certificates of deposit, bills, and other pledges, if exchange rate fluctuations cause the pledge value to be insufficient for XXX% of the corresponding specific transaction amount, Party B is obligated to add the corresponding amount of guarantee deposit or provide other collateral as required by Party A.

Where the facility currency differs from the specific transaction currency, if exchange rate fluctuations cause the specific transaction amount converted at the latest exchange rate published by Party A to exceed the amount at the time the specific transaction actually occurred, resulting in the total specific transaction amount actually occurring under this Agreement exceeding the total credit facility amount, Party B is obligated to add a guarantee deposit or provide other security conditions as required by Party A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.11 To ensure that sales proceeds from import transactions are returned to Party A's designated account; under export negotiation, to transfer to Party A the bills and / or documents under the letter of credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.12 Party B guarantees that its settlement, payment, and collection activities are mainly conducted through bank settlement accounts opened with Party A. During the credit period, Party B's settlement transaction share in the designated account shall be no less than Party B's financing share with Party A among all banks.

**7. Party A's Rights and Obligations**

7.1 Party A enjoys the following rights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.1 The right to require Party B to repay on time and in full the principal, interest, and fees of loans, advances, and other credit debts under this Agreement and specific contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.2 The right to require Party B to provide materials related to its use of the credit facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.3 The right to understand Party B's production, operations, and financial activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.4 The right to supervise Party B's use of loans and / or other credit in accordance with the purposes stipulated in this Agreement and specific business documents; the right to unilaterally directly suspend or restrict Party B's corporate online banking / corporate APP / other online functions (including but not limited to closing corporate online banking / corporate APP / other online functions, presetting payment recipient lists / single payment limits / tiered payment limits and other restriction measures) and other electronic payment channels, restricting the issuance of settlement vouchers, or restricting Party B's account counter payments and transfers, as well as payment and remittance functions of telephone banking, mobile banking, and other non-counter channels, when business needs require;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.5 The right to entrust other China Merchants Bank branches at the beneficiary's location to transfer letters of credit to the beneficiary upon receiving Party B's application to open letters of credit, based on its internal process requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.6 The right to directly deduct funds from any account opened by Party B at any China Merchants Bank institution to repay debts owed by Party B under this Agreement and specific business documents (when credit debts are denominated in non-RMB currencies, the right to directly purchase foreign exchange or sell foreign exchange at the exchange rate published by Party A at the time of deduction from any account of Party B to repay credit principal, interest, and fees);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.7 The right to transfer the creditor's rights it holds against Party B, and to notify Party B of the transfer by means it considers appropriate, including but not limited to fax, mail, personal delivery, public announcement in public media, etc., and to collect from Party B;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.8 The right to supervise Party B's accounts and to entrust other China Merchants Bank institutions other than Party A to supervise Party B's accounts, and to control loan fund payments according to the loan purpose and payment scope agreed by both parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.9 When Party A discovers that Party B has any situation described in Article 6.2.6 of this Agreement, Party A has the right to require Party B to implement measures to ensure the safe repayment of principal, interest, and all related fees of credit debts under this Agreement as required by Party A, and also has the right to directly take one or more of the default remedies stipulated in the "Default Events and Handling" clause of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.10 The right to report to regulators any new local government hidden debts of Party B;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.11 Other rights stipulated in this Agreement.

7.2 Party A undertakes the following obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1 To disburse loans or provide other credit to Party B within the credit facility under the conditions stipulated in this Agreement and specific contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.2 To keep confidential Party B's assets, finances, production, and operating conditions, except as otherwise required by laws and regulations, as required by regulators, or as provided to Party A's superior or subordinate institutions, guarantee parties, or external auditors, accountants, lawyers, or other professional institutions that bear confidentiality obligations.

**8. Party B's Special Warranties**

8.1 Party B is formally established and validly existing under Chinese law, is an entity with legal person status, has true, legal, and valid registration and annual report disclosure procedures, and has full civil capacity to sign and perform this Agreement.

8.2 The signing and performance of this Agreement has been duly authorized by the board of directors or any other competent authority.

8.3 The documents, materials, and certificates provided by Party B regarding Party B, guarantors, mortgagors (pledgors), and mortgaged (pledged) property are true, accurate, complete, and valid, and do not contain material errors or omissions of any material facts.

8.4 To strictly abide by the provisions of specific business documents and all types of letters and related documents issued to Party A.

8.5 At the time of signing this Agreement, no litigation, arbitration, criminal, or administrative penalties have occurred that may have major adverse consequences for Party B or Party B's major assets, and such litigation, arbitration, criminal, or administrative penalties will not occur during the performance period of this Agreement. If they do occur, Party B shall immediately notify Party A.

8.6 To strictly comply with national laws and regulations in business activities, strictly conduct various businesses within the scope of business licenses or as legally approved, and timely handle enterprise (legal person) registration, enterprise annual report procedures, and business period extension / extension procedures.

8.7 To maintain or improve the current level of business management, ensure the preservation and appreciation of existing assets, not abandon any due creditor's rights, and not dispose of existing major assets at no consideration or in other inappropriate ways.

8.8 Without Party A's permission, Party B shall not repay other long-term debts in advance.

8.9 Party B's Statement and Warranty on Environmental, Social, and Governance (ESG) Risks

Environmental, social, and governance (ESG) risks refer to major risks related to environmental, social, and governance factors that may be brought about by Party B and its affiliates, main contractors, and suppliers in their construction, production, and business activities, including risks related to ecological protection, environmental pollution, climate change, biodiversity, water resource utilization, production safety, occupational health, gender equality, employee rights, land requisition and relocation, and immigrant resettlement. Regarding the management of ESG risks, Party B declares and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9.1 To establish sound ESG risk internal management systems that comply with legal and regulatory requirements and are effectively implemented;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9.2 All behaviors and practices related to ESG risks are compliant, and there are no major litigation, arbitration cases, or other legal proceedings related to ESG risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9.3 To establish sound ESG risk emergency response mechanisms and measures, set up dedicated departments and / or designated personnel to be responsible for ESG risk matters, and detail the responsibilities, obligations, and penalties of relevant responsible personnel in internal systems; to respond appropriately or take other necessary actions in the face of strong public or stakeholder challenges regarding Party B's control of ESG risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9.4 To urge its affiliates, main contractors, and suppliers to strengthen management and prevent the spread of ESG risks from those institutions to Party B;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9.5 To submit ESG risk reports as required by Party A, cooperate with Party A or its recognized third parties in evaluating and inspecting ESG risks, and timely inform Party A of relevant information on controlling ESG risks, including but not limited to various permits, approvals, and verifications related to ESG risks during start-up, construction, operation, and closure; evaluation and inspection of ESG risks by environmental, social, and governance risk regulators or their recognized institutions for Party B or its affiliates, main contractors, and suppliers; ancillary construction and operation of environmental facilities; pollutant discharge and compliance; safety and health of Party B's employees; major complaints and protests from neighboring communities against Party B or its affiliates, main contractors, and suppliers; major environmental, social, and governance claim situations; other major situations related to ESG risks as determined by Party A;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9.6 Party B itself shall comply with and urge its affiliates, main contractors, and suppliers to comply with relevant laws and regulations on ecology, environment, land, health, safety, etc. in the countries or regions where the project is located, follow relevant international practices or guidelines, and ensure that the project management is substantially consistent with international good practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9.7 To perform other obligations related to controlling ESG risks as determined by Party A.

8.10 Party B undertakes to comply with national regulatory requirements on local government hidden debts, and not to illegally incur any local government hidden debts after signing this Agreement. Local government hidden debts in this Agreement refer to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10.1 Debts recognized as hidden debts by national finance departments, audit departments, and other regulatory agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10.2 Debts that have not yet been recognized as hidden debts by regulatory agencies, but are financed outside the statutory government debt limits actually relying on fiscal funds for repayment or providing credit support (including guarantees, buy-backs, etc.).

8.11 To strictly comply with and implement anti-money laundering and sanctions compliance-related policies and regulations applicable in China and elsewhere, not participate in or assist others in participating in suspected money laundering, terrorist financing, proliferation financing, tax evasion, fraud, and other illegal and criminal activities. To comply with and implement Party A's anti-money laundering and sanctions compliance systems and documents as required by Party A. When Party A requires, to actively cooperate with Party A in taking appropriate actions and investigations in accordance with relevant anti-money laundering, counter-terrorist financing, and anti-tax evasion regulations.

8.12 Party B shall not use fictitious contracts with affiliates or bills without trade backgrounds, accounts receivable, and other creditor's rights to handle bill discounting, factoring, pledging, letters of credit, welfare extensions, and other businesses with Party A.

8.13 The loan projects applied for under the credit facility comply with legal and regulatory requirements. Loan funds shall not be used for fixed assets, equity and other investments, shall not be used in violation of regulations for speculation in securities, futures, and real estate; shall not be used for inter-lending to obtain illegal income; shall not be used for areas and purposes prohibited by the State; shall not be used for other purposes beyond those stipulated in this Agreement and specific business documents.

Where loan fund payments are made using the borrower's self-payment method, Party B shall periodically (at least monthly) report to Party A a summary of loan fund payments. Party A has the right to verify whether loan fund payments comply with the agreed purposes through account analysis, voucher inspection, on-site investigation, and other methods.

8.14 At the time of signing and performing this Agreement, no other material events have occurred that affect Party B's performance of its obligations under this Agreement.

**9. Special Provisions on Working Capital Loans**

9.1 Drawdown and Fund Usage

The methods for Party B to use working capital loans under this Agreement include self-payment and entrusted payment.

9.1.1 Self-Payment

Self-payment means Party A disburses loan funds to Party B's account based on Party B's drawdown application, and Party B independently pays to Party B's transaction counterparts that meet the agreed purpose of the Agreement.

9.1.2 Entrusted Payment

Entrusted payment means Party A transfers loan funds through Party B's account to Party B's transaction counterparts that meet the agreed purpose of the Agreement, based on Party B's drawdown application and payment authorization. For loans using entrusted payment, Party B authorizes Party A to pay to Party B's transaction counterparts through Party B's account on the disbursement date (or the next working day after disbursement).

9.1.3 In the following circumstances, Party B must unconditionally use entrusted payment in full:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.3.1 Party B's single drawdown exceeds RMB XXX (inclusive, or equivalent in foreign currency);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.3.2 Party A requires Party B to adopt entrusted payment based on regulatory requirements or risk management needs.

9.1.4 For entrusted payment, external payments after loan disbursement are subject to Party A's approval. Party B shall not circumvent Party A's supervision through online banking, reverse billing, fragmentation, or similar methods.

9.2 When Party B applies for drawdown, it shall submit a drawdown application as required by Party A (for offline submissions, it shall be stamped with Party B's company seal or Party B's pre-registered seal with Party A; for online submissions, digital certificates or other methods recognized by Party A shall be used for signing), loan notes (if required), and materials required by Party A based on the different requirements for self-payment and entrusted payment. Otherwise, Party A has the right to refuse Party B's drawdown application. Party A shall not bear any responsibility for transaction counterpart defaults or other losses caused by inaccurate or incomplete payment information provided by Party B, resulting in delayed or failed fund payments.

9.3 Loan Extension

If Party B is unable to repay loans under this Agreement on time and needs to apply for a loan extension, Party B shall submit a written application to Party A one month before the relevant loan matures. If Party A approves the extension after review, Party A and Party B shall separately sign an extension agreement. If Party A does not agree to the extension, Party B shall repay the already-occupied loans and accrued interest in accordance with this Agreement and the corresponding loan notes or Party A's system records.

**10. Default Events and Handling**

10.1 Any of the following events by Party B shall be deemed a default event:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.1 Failure to perform or violation of any obligations stipulated in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.2 Any special warranty items of Party B under this Agreement are untrue or incomplete, or Party B violates or fails to perform special warranty items;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.3 Failure to draw down or use loans in accordance with this Agreement, or failure to repay the principal, interest, or fees of loans on time and in full as stipulated in this Agreement, or failure to use funds for return to the cage account as required by Party A, or failure to accept Party A's supervision, or failure to promptly rectify as required by Party A;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.4 Party B has major default events under legally valid contracts signed with other creditors, and such defaults are not resolved within three months from the date of default; or any affiliated party of Party B has major defaults against China Merchants Bank or other creditors, and such defaults are not resolved within three months from the date of default, which Party A determines may have adverse effects on Party B's performance of its obligations (regardless of whether Party B has default events under this Agreement).

The aforementioned major default events refer to defaults by Party B where the creditor's right to claim compensation reaches RMB XXX or more.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.5 If Party B is a NEEQ-listed enterprise or plans to apply for NEEQ listing, and Party B's NEEQ listing encounters major obstacles or the listing application is suspended; Party B is issued warning letters, ordered to make corrections, has securities account transactions restricted, or other self-regulatory measures totaling 3 or more times, or is subject to disciplinary actions, terminated from listing, or similar situations by the NEEQ market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.6 When Party B acts as a supplier to a government procurement unit, and the government procurement unit experiences continuous or cumulative three-period payment delays and other risk information unfavorable to Party A's credit recovery, or Party B is disqualified as a supplier (placed on the government procurement blacklist), experiences delivery delays, unstable product quality, operational difficulties, significantly deteriorated financial condition (insolvency), construction stoppages, and other situations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.7 Party B's financial indicators fail to continuously meet the requirements stipulated in this Agreement / specific business documents; or any precondition for Party A to provide credit / financing to Party B stipulated in this Agreement / specific business documents (if any) is not continuously satisfied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.8 Party B uses loans in a "fragmented to zero" manner to circumvent the requirement under this Agreement to entrust Party A to make external payments of loan funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.9 Party B fails to earnestly fulfill / satisfy the declarations and warranties in this Agreement regarding ESG risk management, or is penalized by relevant regulatory authorities or strongly questioned by the public and / or media due to poor ESG risk management, or other default events related to ESG risk management occur, including Party B and its affiliates, main contractors, and suppliers violating ESG agreements with their respective creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.10 Party B uses related-party transactions to damage or evade Party A's or other China Merchants Bank institutions' creditor's rights, which shall be deemed a default.

Related-party transactions refer to matters involving the transfer of resources or obligations between related parties, regardless of whether consideration is received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.11 Other situations that Party A determines are damaging to Party A's legitimate rights and interests.

10.2 If any of the following events occurs with a guarantor, and Party A determines that it may affect the guarantor's guarantee capacity, requiring the guarantor to eliminate the adverse effects caused thereby, or requiring Party B to add or replace security conditions, and the guarantor or Party B fails to cooperate, it shall be deemed that a default event has occurred:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.1 Occurrence of situations similar to Article 6.2.6 of this Agreement, or occurrence of the situations described in Article 6.2.8 without obtaining Party A's consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.2 Concealed its actual ability to assume guarantee obligations when issuing the irrevocable letter of guarantee, or failed to obtain authorization from competent authorities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.3 Failure to timely handle registration, enterprise annual report procedures and / or business period extension / extension procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.4 Neglecting the management and pursuit of due creditor's rights, or disposing of existing major assets at no consideration or in other inappropriate ways;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2.5 Violating any obligations, undertakings, or declarations in the signed irrevocable letter of guarantee.

10.3 If any of the following events occurs with a mortgagor (or pledgor), and Party A determines that it may cause the mortgage (or pledge) to fail or the mortgaged property (or pledged property) to be insufficient in value, requiring the mortgagor (or pledgor) to eliminate the adverse effects caused thereby, or requiring Party B to add or replace security conditions, and the mortgagor (or pledgor) or Party B fails to cooperate, it shall be deemed that a default event has occurred:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.1 No ownership or disposal rights over the mortgaged property (or pledged property), or ownership is disputed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.2 The mortgaged property (or pledged property) has not properly completed mortgage / pledge registration procedures, or has been leased out, has a residential right established on it, is sealed, seized, or monitored, has joint ownership / statutory prior priority rights (including but not limited to construction project payment priority, chattel price payment mortgage priority), has a seller's ownership retention priority established, has a lessor's financial lease priority established, etc., and / or such situations have occurred but are concealed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.3 Without Party A's written consent, the mortgagor transfers, leases, establishes residential rights, re-mortgages, or otherwise improperly disposes of the mortgaged property or establishes any form of rights burdens, or although Party A's written consent is obtained, the proceeds from disposing of the mortgaged property are not used to repay Party B's debts to Party A as required by Party A;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.4 The mortgagor fails to properly manage, maintain, and repair the mortgaged property, causing the value of the mortgaged property to significantly depreciate; or the mortgagor's actions directly endanger the mortgaged property, causing the value of the mortgaged property to decrease; or the mortgagor fails to insure / renew insurance for the mortgaged property as required by Party A during the mortgage period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.5 The mortgaged property has been or may be included in the scope of government demolition or expropriation, but the mortgagor fails to immediately notify Party A and perform relevant obligations as stipulated in the mortgage agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.6 The mortgagor uses the excess value of mortgage properties at China Merchants Bank to provide residual value mortgage security for transactions under this Agreement; before Party B repays all credit under this Agreement, the mortgagor repays the mortgagor's personal mortgage loans in advance without Party A's consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.7 Where the pledgor pledges financial products, the source of funds for purchasing the financial products is illegal / non-compliant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.8 The mortgaged (pledged) property undergoes or may undergo other events affecting the value of the mortgaged (pledged) property or Party A's mortgage (pledge) rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3.9 The mortgagor (or pledgor) violates any obligations, undertakings, or declarations in the signed mortgage agreement / pledge agreement.

10.4 The mortgagor (or pledgor) has money laundering or sanctions compliance risks that may harm Party A's interests.

10.5 If the security under this Agreement includes accounts receivable pledges, and the accounts receivable debtor's operations significantly deteriorate, assets are transferred / funds are misappropriated to evade debts, or collusion with the accounts receivable pledgor changes the repayment route causing accounts receivable repayments not to enter the dedicated repayment account, or the accounts receivable debtor loses commercial credit, loses or may lose the ability to perform obligations, or other major events affecting its repayment capacity occur, Party A has the right to require Party B to provide corresponding security or provide new valid accounts receivable for pledge; if Party B fails to provide, it shall be deemed that a default event has occurred.

10.6 Upon the occurrence of any of the above default events, Party A has the right to take the following measures separately or simultaneously:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.1 Reduce the credit facility under this Agreement, or stop the use of the remaining credit facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.2 Recover in advance the principal, interest, and related fees of loans disbursed within the credit facility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.3 For bills accepted, letters of credit issued (including entrusted transfers), letters of guarantee, delivery guarantee letters, etc. already committed to by Party A during the credit period, regardless of whether Party A has made advances, Party A may require Party B to add the amount of guarantee deposits, or transfer deposits from other accounts opened by Party B at Party A to the guarantee deposit account as the guarantee deposit for Party A's future advances for Party B, or have the corresponding amounts held in escrow by a third party, as the guarantee deposit for Party A's future advances for Party B;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.4 For uncollected accounts receivable creditor's rights assigned by Party B to Party A under factoring business, the right to require Party B to immediately perform repurchase obligations and take other indemnification measures in accordance with relevant specific business documents; for accounts receivable creditor's rights against Party B assigned under factoring business, the right to immediately pursue Party B for recovery;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.5 Party A may also directly require Party B to provide other property acceptable to Party A as new security; if Party B fails to provide new security as required, Party B shall bear liquidated damages equivalent to XXX% of the credit facility amount under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.6 Directly freeze / deduct deposits in any settlement account and / or other accounts opened by Party B at China Merchants Bank, stop opening new settlement accounts for Party B, and cancel new credit cards for Party B's legal representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.7 Report Party B's dishonest information to credit agencies and banking associations, and has the right to share such information among banking institutions and even make public disclosures through appropriate means;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.8 Dispose of mortgage and pledged property in accordance with the provisions of security documents and / or pursue guarantors for recovery;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.9 For working capital loans under the credit facility, change the loan fund entrusted payment conditions and cancel Party B's use of loans in "self-payment" mode;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6.10 Pursue recovery in accordance with this Agreement.

10.7 For amounts recovered by Party A, repayment shall be made in order from the latest to the earliest actual maturity date of each credit item. The specific repayment order for each credit item shall be fees, liquidated damages, compound interest, penalty interest, interest, and finally the credit principal, until all principal, interest, and all related fees are fully repaid.

Party A has the right to unilaterally adjust the above repayment order, except as otherwise required by laws and regulations.

**11. Amendment and Supplement of the Agreement**

This Agreement may be amended upon mutual agreement of Party A and Party B and the conclusion of a written agreement. Before the conclusion of a written agreement, this Agreement shall remain in effect. Neither party may unilaterally amend this Agreement.

Written supplementary agreements reached by Party A and Party B through negotiation on matters not covered or changes in this Agreement, as well as specific business documents under this Agreement, shall all constitute inseparable components of this Agreement.

**12. Other Matters**

12.1 During the effective period of this Agreement, any tolerance, indulgence, or delayed enforcement by Party A of any violation or delay of Party B's obligations shall not damage, affect, or limit all rights and interests that Party A should enjoy under relevant laws and this Agreement as a creditor, and shall not be deemed as Party A's permission or recognition of any violation of this Agreement, nor shall it be deemed as Party A's waiver of the right to take action against existing or future violations.

12.2 Regardless of the reason for this Agreement becoming legally invalid, or when partial clauses are invalid, Party B shall still bear the liability to repay all debts owed to Party A under this Agreement. If such a situation occurs, Party A has the right to terminate the performance of this Agreement and immediately pursue Party B for all debts owed under this Agreement.

If changes in applicable laws or policies result in new costs to Party A for performing obligations under this Agreement, Party B shall compensate Party A for such increased costs as required by Party A.

12.3 Notices, requirements, or other documents related to this Agreement between Party A and Party B shall be sent in written form (including but not limited to letters, faxes, emails, China Merchants Bank corporate online banking / corporate APP and other electronic platforms, mobile SMS or WeChat, and other forms). Party B confirms the document delivery address and delivery methods as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3.1 Party B confirms and agrees that the contact address reserved in Party B's China Merchants Bank corporate online banking / corporate APP and other electronic platforms, or the contact address, email, fax number, mobile phone number, or WeChat account stated in this Agreement, may all be used as the delivery address for notices, requirements, or other documents related to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3.2 Party B confirms and agrees: delivery by personal service (including but not limited to lawyers / notaries, express delivery, etc.) shall be deemed delivered upon the recipient's signature (if the recipient refuses to accept, it shall be deemed delivered on the refusal date / return date or the date that is 7 days after the mailing date, whichever is earlier); delivery by postal mail shall be deemed delivered 7 days after mailing; delivery by fax, email, China Merchants Bank corporate online banking / corporate App internal announcement / notice, mobile SMS, WeChat, and other electronic methods shall be deemed delivered on the date the corresponding Party A system / electronic device displays successful sending.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3.3 If Party B changes its contact address, email, fax number, mobile phone number, or WeChat account, it shall notify Party A in writing within five working days from the date of change; otherwise Party A has the right to deliver based on Party B's original contact address or information. Party B shall bear any losses that may result and shall not affect the legal validity of the delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3.4 Courts / arbitration institutions / notarization institutions delivering judicial / arbitration documents / notarial documents to the delivery addresses agreed in this Agreement shall be deemed effective delivery (specific delivery standards shall be implemented with reference to the preceding provisions).

Party B further agrees that courts may electronically deliver judicial documents to Party B through the China Judicial Process Information Disclosure Network, the National Unified Delivery Platform, and other electronic means; for electronic delivery of judicial documents by courts pursuant to the above provisions, the date displayed as successfully sent on the China Judicial Process Information Disclosure Network, National Unified Delivery Platform, and other platforms shall be the delivery date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3.5 The delivery addresses and delivery methods stipulated in this clause apply to all stages of the performance period of the Agreement, dispute resolution period, arbitration period, court trial period (first instance, second instance, retrial), and enforcement.

12.4 Both parties agree that for all business applications under trade finance transactions, Party B's affixing of a pre-reserved seal at Party A's location shall suffice, and both parties recognize the validity of such sealed documents.

12.5 Both parties confirm: electronic signatures generated using digital certificates for applications or business vouchers submitted by Party B through Party A's electronic platform (including but not limited to corporate banking / corporate APP) shall be deemed valid signatures of Party B, representing Party B's true intent. Party A has the right to fill in the relevant business vouchers based on the application information submitted online, and Party B acknowledges the authenticity, accuracy, and legality thereof and is bound by it.

12.6 For the convenience of business handling, all operations related to Party A's transactions (including but not limited to receiving applications, reviewing materials, disbursing funds, confirming transactions, deducting funds, inquiries, re-printing statements, collections, fund deductions, and various notices) may be processed by any business outlet under Party A's jurisdiction, and the documents generated, signed, or issued. The business operations and documents of outlets under Party A's jurisdiction shall be deemed as actions of Party A and shall be binding on Party B.

12.7 Attachments under this Agreement constitute inseparable components of this Agreement and automatically apply to corresponding specific transactions actually occurring between the parties.

12.8 Fee Allocation

☐ 12.8.1 Where this Agreement involves Party B purchasing accident insurance with Party A as the first beneficiary, insurance fees shall be allocated in the following manner (marking "√" in "☐" indicates that the provision is applicable):

Please mark "√" in "☐" to select: ☐ Party A bears. ☐ Both parties share in the following proportion: Party A XXX%, Party B XXX%.

☐ 12.8.2 Where this Agreement involves compulsory enforcement notarization fees (except for fees for applying for enforcement certificates), the fee allocation shall be in the following manner (marking "√" in "☐" indicates that the provision is applicable):

Please mark "√" in "☐" to select: ☐ Party A bears. ☐ Both parties share in the following proportion: Party A XXX%, Party B XXX%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8.3 For matters entrusting third parties to provide services, related fees shall be borne by the entrusting party. If both parties act as entrusting parties jointly, each shall bear 50%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8.4 In the event that Party B is unable to repay debts owed to Party A under this Agreement on time, all fees incurred by Party A to realize its creditor's rights, including attorney fees, litigation fees, travel expenses, announcement fees, delivery fees, fees for applying for enforcement certificates, etc., shall be fully borne by Party B. Party B authorizes Party A to directly deduct from Party B's bank account at Party A. If there is a shortfall, Party B guarantees to repay promptly upon receiving Party A's notice, without requiring Party A to provide any proof.

12.9 Party B shall comply with Party A's requirements (select with "√"):

☐ To insure its core assets and designate Party A as the first-priority beneficiary;

☐ Not to sell or pledge Party A's designated ___/___ assets before credit debts are settled;

☐ To restrict dividends distributed to its shareholders before credit debts are settled as required by Party A:

XXX

12.10 Party B shall ensure that all financial indicators of Party B during the credit period are no lower than the following requirements:

XXX

12.11 Party B simultaneously acknowledges that China Merchants Bank XXX Branch and Party B's parent company / head office / holding company XXX (company name) have signed a group credit business cooperation agreement with reference number XXX (including adjustments and supplements made at the time of signing). Party B agrees to be bound by this agreement and agrees to serve as a group subsidiary under this agreement, bearing all obligations set for group subsidiaries therein. If this is violated, it shall be deemed that a default has occurred by Party B, and Party A has the right to take all default remedy measures stipulated in this Agreement.

12.12 In enterprise financial and business decisions, if one party has the ability to directly or indirectly control or jointly control another party, or exert major influence on another party, it shall be the related party referred to in this Agreement; if two or more parties are jointly controlled by one party, they shall also be related parties, with Party A's determination as the standard.

The "key stakeholders" referred to in this Agreement means Party B's legal representative or unit head, authorized signatories, actual controllers, beneficial owners, major investors, major investees, major creditors, controlled entities, etc., with Party A's determination as the standard.

12.13 Other agreed matters: XXX

**13. Account Information**

☐ 13.1 Dedicated Loan Account (if applicable, please mark "√" in "☐")

All loan fund disbursements and payments under this Agreement must be processed through the following account:

Account Name: XXX

Account Number: XXX

Bank: XXX

13.2 Fund Return Account

13.2.1 Party A and Party B agree to designate the following account as Party B's fund return account:

Account Name: Shengfeng Logistics Group Co., Ltd.

Account Number: XXX

Bank: China Merchants Bank Fuzhou Baima Sub-branch

If the above account information is inconsistent with the account information recorded in the loan note or Party A's system, the account information recorded in the loan note or Party A's system shall prevail.

13.2.2 Account monitoring requirements for this account: XXX

Party A has the right to recover loans in advance based on Party B's fund return situation; that is, when there are returned funds in this account, the corresponding loan amount may be deemed due in advance, and Party A has the right to directly deduct from this account to repay such portion of the loan.

13.3 Party B shall provide quarterly reports on the inflows and outflows of the above account, cooperating with Party A in monitoring relevant accounts and returned funds.

**14. Applicable Law and Dispute Resolution**

14.1 The conclusion, interpretation, and resolution of disputes under this Agreement shall all be governed by the laws of the People's Republic of China (excluding the laws of Hong Kong, Macao, and Taiwan). The rights and interests of Party A and Party B are protected by the laws of the People's Republic of China.

14.2 Disputes arising between Party A and Party B during the performance of this Agreement shall be resolved through negotiation. If negotiation fails, either party shall (choose one of three, mark "√" in "☐"):

☑ 14.2.1 File a lawsuit with the people's court with jurisdiction at Party A's location;

☐ 14.2.2 File a lawsuit with the people's court with jurisdiction at the place of signing the Agreement; the place of signing the Agreement is XXX;

☐ 14.2.3 Submit to XXX (fill in specific arbitration institution name) for arbitration; the place of arbitration is XXX.

14.3 After this Agreement and specific business documents have been notarized by Party A and Party B to grant enforcement effect, Party A may directly apply to the people's court with jurisdiction for compulsory enforcement to recover debts owed by Party B under this Agreement and specific business documents.

**15. Agreement Effectiveness**

This Agreement shall become effective when the legal representatives / principal responsible persons or their authorized representatives of both Party A and Party B sign (or affix name seals) and affix company seals / contract-specific seals, and shall automatically become invalid on the date the credit period expires or on the date all debts owed by Party B to Party A under this Agreement and all other related fees are fully settled (whichever is later).

**16. Appendix**

This Agreement is made in XXX copies; Party A, Party B, and XXX Real Estate Registration and Transaction Center, XXX each hold one copy, all having equal legal effect.

Attachment 1: Special Terms for Cross-Border Trade Finance Business

Attachment 2: Special Terms for Buyer / Import Factoring Business

Attachment 3: Special Terms for Order Loan Business

Attachment 4: Special Terms for Commercial Acceptance Bill Discounting Business

Attachment 5: Special Terms for Derivative Trading Business

Attachment 6: Special Terms for Gold Leasing Business

Attachment 1

**Special Terms for Cross-Border Trade Finance Business**

1. Cross-border linked trade finance business refers to trade finance business provided jointly by Party A and China Merchants Bank overseas institutions (hereinafter referred to as the "Linked Platform") that Party B applies to handle based on the genuine cross-border trade background between Party B and overseas companies.

2. Specific products of cross-border linked trade finance business include: back-to-back letters of credit, entrusted letter of credit issuance, entrusted overseas financing, bill guarantee payment, letter of guarantee overseas credit extension, and cross-border trade finance express. The specific meaning, business rules, and other details of each product shall be stipulated in specific business documents.

3. Under back-to-back letters of credit, the master letter of credit that Party B applies to Party A to issue directly occupies the credit facility under this Agreement. Advances or payments (regardless of whether they occur during the credit period) made by Party A in performing the issuance obligation under such master letters of credit, and the corresponding interest and fees, constitute Party B's financing debts to Party A and fall within the scope of credit security.

Under entrusted letter of credit issuance / entrusted overseas financing, the letters of credit issued by the Linked Platform upon receiving applications from overseas companies, or trade finance provided by the Linked Platform, occupy the credit facility under this Agreement based on Party A's entrustment of Party B's application. When Party A disburses import documentary collection advances or provides advances for external payments under import documentary collection to Party B, such advances (regardless of whether they occur during the credit period) and the corresponding interest and fees directly constitute Party B's financing debts to Party A and fall within the scope of credit security.

Under bill guarantee payment, Party A directly occupies the credit facility under this Agreement for Party B's accepted commercial bills on Party B's application. If Party B fails to make full payment on schedule, Party A has the right to directly make advances against the guaranteed bills, and such advances (regardless of whether they occur during the credit period) and the corresponding interest and fees fall within the scope of credit security.

Under letter of guarantee overseas credit extension business, letters of guarantee / standby letters of credit issued by Party A based on Party B's application directly occupy the credit facility under this Agreement. After the overseas company assigns the collection rights (not indemnity rights) under the letter of guarantee to the Linked Platform, when the Linked Platform claims compensation from Party A based on the letter of guarantee / standby letter of credit, any advances made by Party A (regardless of whether they occur during the credit period) and the corresponding interest and fees directly constitute Party B's financing debts to Party A and fall within the scope of credit security.

Under the cross-border trade finance express business, Party A reviews Party B's trade finance applications and the Linked Platform directly provides trade finance to Party B, occupying the credit facility under this Agreement. If Party B fails to repay the Linked Platform trade finance on time and in full, Party A has the right to repay through bill financing or advances. Such advances (regardless of whether they occur during the credit period) and the corresponding interest and fees directly constitute Party B's financing debts to Party A and fall within the scope of credit security.

Attachment 2

**Special Terms for Buyer / Import Factoring Business**

1. Definitions

1.1 Buyer / import factoring business refers to business where Party A acts as the buyer / import factor, receives assignment of accounts receivable from sellers / export factors against Party B as the commercial contract payment obligor, and provides comprehensive factoring services to sellers / export factors including payment guarantee, accounts receivable collection, and management.

Under buyer / import factoring business, if Party B's buyer credit risk occurs, Party A shall bear payment guarantee obligations to the seller / export factor; if disputes arise during the performance of commercial contracts, Party A has the right to reverse-assign the assigned accounts receivable to the seller / export factor.

1.2 Seller / export factor refers to the party that signs factoring business agreements with the supplier / service provider (accounts receivable creditor) under the commercial contract and receives assignment of accounts receivable held by the accounts receivable creditor. Party A may simultaneously act as both the buyer / import factor and the seller / export factor.

1.3 Disputes refer to objections, counterclaims, offsets, or similar actions raised by the accounts receivable creditor against accounts receivable assigned to Party A, and actions by third parties to claim rights or apply for asset preservation on accounts receivable under this Agreement, due to disputes arising from related goods, services, invoices, or any other commercial contract-related matters between the accounts receivable creditor and Party B. Any situation where the accounts receivable assigned to Party A cannot be fully or partially realized due to reasons other than buyer credit risk shall be deemed a dispute.

1.4 Commercial contract refers to a transaction contract signed by Party B and the accounts receivable creditor, for the purpose of goods trading and / or service transactions, with payment by installment as the settlement method.

1.5 Payment guarantee / guarantee payment refers to the payment that Party A, as the buyer / import factor, should make to the seller / export factor within a certain period after the accounts receivable matures, in the event of buyer credit risk occurring for Party B.

2. Upon Party B's application, Party A agrees to handle buyer / import factoring business for Party B within the credit facility amount. Accounts receivable assigned from the seller / export factor shall be deducted / occupy the credit facility under the Credit Facility Agreement based on their amount.

Payments made by Party A as buyer / import factor in performing payment guarantee / guarantee payment obligations, and related fees, shall be deemed as credit extended by Party A to Party B under the "Credit Facility Agreement", falling within the scope of security provided by Party B. Party A has the right to pursue Party B for payment guarantee / guarantee payment amounts using all measures stipulated under the Credit Facility Agreement. As long as the seller / export factor (regardless of whether it is Party A) assigns accounts receivable during the credit period, even if Party A performs payment guarantee obligations beyond the credit period, Party A still has the right to pursue Party B in accordance with the "Credit Facility Agreement" and the commercial contract.

3. Buyer / Import Factoring Service Fees

Factoring service fees are business management fees that Party A collects for providing buyer / import factoring services, and Party A collects them from Party B at a certain proportion of the accounts receivable amount at the time of assignment and delivery. The specific fee standards shall be reasonably determined by Party A based on its business rules.

4. For disputes arising during the performance of commercial contracts, Party B waives the right to raise disputes. Accordingly, regardless of any other provisions, once Party B fails to make external payments as agreed in the commercial contract, it shall be deemed that buyer credit risk has occurred for Party B. Party A will then make payment guarantees, and Party B has no objection to this.

Attachment 3

**Special Terms for Order Loan Business**

1. Order loan business refers to loans disbursed by Party A to Party B based on commercial contracts (or engineering contracts) signed between Party B and its downstream customers (paying parties), for use in daily production and operations to perform commercial contracts (or engineering contracts), with contract sales proceeds (or engineering proceeds) as the primary repayment source.

2. Party B opens a sales proceeds dedicated account at Party A for commercial contracts (or engineering contracts). All sales proceeds from commercial contracts (or engineering contracts) for which order loans are applied must be directly deposited into the dedicated account, and may not be used without Party A's approval, nor may the dedicated account be changed. Party B must notify the paying party that this dedicated account is the only account for sales proceeds. Party A has the right to deduct funds in the dedicated account to repay the principal, penalty interest, and other related fees of order loan financing.

3. When any of the following situations occurs, Party A may immediately stop Party B's use of the facility under the "Credit Facility Agreement" and take default handling measures pursuant to the "Credit Facility Agreement":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Party B's downstream customers experience continuous three-period payment delays, which Party A reasonably determines to be situations such as deteriorating financial conditions unfavorable to protecting Party A's creditor's rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Party B is disqualified as a supplier by downstream customers; Party B experiences delays in delivering goods to downstream customers, unstable product quality, failure to construct according to the engineering contract schedule without downstream customer approval, Party B's qualification is downgraded making it no longer meet the downstream customer's requirements, Party A reasonably determines that it has operational difficulties or deteriorating financial conditions, or for three consecutive months, downstream customer repayments to Party B are less than Party B's total monthly repayment obligations under all financing contracts in this credit facility, or downstream customers continuously fail to make installment payments as stipulated in the engineering contract for two periods.

Attachment 4

**Special Terms for Commercial Acceptance Bill Discounting Business**

1. Commercial acceptance bill discounting business refers to business where Party A provides discount financing for commercial acceptance bills accepted, endorsed, or guaranteed by Party B, or permits bill holders to apply for discounting at any China Merchants Bank branch (hereinafter referred to as other discounting banks). Bill holders (hereinafter referred to as discounting applicants) may apply to Party A or other discounting banks for discounting of such commercial acceptance bills, and all such discounting transactions occupy the credit facility under this Agreement.

Since Party A's provision of commercial acceptance bill discounting services to Party B is a prerequisite for other discounting banks to accept bill holder applications for discounting, other discounting banks that have processed discounting have the right to transfer the discounted bills to Party A, and Party A is obligated to accept the transfer. Party B has no objection to this.

2. Commercial acceptance bills referred to in this clause include both paper commercial acceptance bills and electronic commercial acceptance bills (hereinafter referred to as electronic bills). Payment methods include buyer payment, seller payment, other-party payment, and agreed payment.

3. Party B must open a commercial acceptance bill guarantee deposit account at Party A (the account number is subject to Party A's system automatic generation or records at the time the guarantee deposit is deposited, same below), and before each bill is accepted, deposit a certain amount of funds into this guarantee deposit account at the proportion required by Party A, as the payment guarantee deposit for commercial acceptance bills discounted by Party A or assigned from other discounting banks.

If Party B is the acceptor of commercial acceptance bills, Party B should deposit the full amount of bills payable into the guarantee deposit account opened with Party A before each commercial acceptance bill matures, in preparation for paying the bills upon maturity.

4. During the credit period, bill holders may apply for discounting of commercial acceptance bills accepted, endorsed, or guaranteed by Party B directly from Party A or from other discounting banks. Party A or other discounting banks have the right to conduct qualification reviews of discounting applicants, require Party B to review and confirm, and independently decide whether to process the discounting.

After other discounting banks process discounting, they have the right to endorse and transfer the discounted commercial acceptance bills to Party A in accordance with China Merchants Bank's relevant regulations. After Party A processes discounting or receives commercial acceptance bills transferred from other discounting banks, when bill holders require Party B to make payment, Party B shall unconditionally and promptly pay Party A the full amount payable.

5. The issuance, acceptance, guarantee, endorsement, discounting, and other information for each electronic bill shall be subject to the business information stored in the China Bills Trading System or the Electronic Commercial Bill System, or customer statements and other business records printed based on such information. Information stored in the China Bills Trading System or the Electronic Commercial Bill System and business records generated therefrom are components of this attachment and have equal legal effect as this attachment. Party B acknowledges their accuracy, authenticity, and legality.

6. For disputes arising from underlying contracts of commercial acceptance bills discounted by Party A, Party B shall resolve them independently with the relevant parties, which shall not exempt Party B from the obligation to timely deposit the full guarantee deposit and bill payment amounts as stipulated in Clause 3.

7. Where Party A has discounted commercial acceptance bills accepted, endorsed, or guaranteed by Party B, or has received such commercial acceptance bills transferred from other discounting banks, if the bill payer or Party B fails to make full payment before the commercial acceptance bill matures, Party A has the right to directly take collection measures against Party B, including but not limited to deducting funds from any account opened by Party B at China Merchants Bank for payment. For advances made by Party A due to Party B's failure to make full payment and insufficient account balance for deduction, Party A shall charge penalty interest to Party B at the rate of XXX per ten thousand per day in accordance with the "Payment and Settlement Management Measures".

Attachment 5

**Special Terms for Derivative Trading Business**

1. For derivative product transactions accepted by Party A upon Party B's application, a certain percentage of the transaction notional principal / transaction amount may occupy the credit facility, or when derivative product transactions generate floating losses, Party A may additionally occupy Party B's credit facility based on specific agreements between both parties (the specific credit facility amount to be occupied shall be determined by Party A based on the product type, term, risk level, risk coefficient corresponding to the credit facility being reduced, etc. of each specific transaction at the time it occurs). The actual credit facility amount occupied shall be subject to the credit facility occupation notice issued by Party A and / or transaction confirmation / certificate and other transaction documents.

2. All derivative transactions that still have balances or have incurred losses during the credit period shall occupy the credit facility in accordance with the preceding clause, regardless of whether the transaction date falls within the credit period.

Attachment 6

**Special Terms for Gold Leasing Business**

1. "Gold leasing" business refers to business where Party A leases physical gold to Party B, and upon maturity, Party B returns gold of the same weight, quality, and commodity attributes, and periodically pays leasing fees to Party A in RMB.

2. Party A may handle gold leasing business for Party B within the credit period and credit facility based on Party B's application. The physical gold leased by Party A shall occupy the credit facility based on the agreed value in the gold leasing agreement signed by both parties and constitute debts owed by Party B to Party A.

Party B's Declaration:

All clauses of this Agreement have been fully negotiated by both parties. Party B has particularly noted the clauses related to exempting or reducing Party A's liability that are materially related to Party B's interests. Party A has made corresponding explanations on these clauses at Party B's request. Party B has a full and accurate understanding of them. The signing parties have a completely consistent understanding of the clauses of this Agreement.

(No further text below)

(The following is the signature column for the "Credit Facility Agreement" with reference number XXX)

Party A: China Merchants Bank Co., Ltd. Fuzhou Branch (bank seal)

Principal responsible person or authorized representative (signature / name seal): XXX

Contact address: XXX

Corporate email: XXX

Corporate fax: XXX

Contact mobile number: XXX

Corporate WeChat: XXX

Party B: Shengfeng Logistics Group Co., Ltd. (seal)

Legal representative / principal responsible person or authorized representative (signature / name seal): XXX

Contact address: XXX

Corporate email: XXX

Corporate fax: XXX

Contact mobile number: XXX

Corporate WeChat: XXX

Date of Signing: XXX

## Exhibit 4.18

**Exhibit 4.18**

Contract No.: XXXXXXXX

**WORKING CAPITAL LOAN CONTRACT**

(2024 Edition)

Special Notice: This contract is entered into by the lender and borrower on an equal and voluntary basis in accordance with law through negotiation. All contract terms are the true expression of both parties' intentions. To protect the legitimate rights and interests of the borrower, the lender specifically requests the borrower to pay full attention to all terms and conditions related to the rights and obligations of both parties, especially the content in bold.

Lender: Industrial and Commercial Bank of China Co., Ltd. Fuzhou Jin'an Branch

Person in Charge: XXX Contact Person: XXX

Address: XXXXXXXXXXXXXXXXXXXXXX Postal Code: XXXXXX

Tel: XXXXXXXXXXX Fax: / Email: /

Borrower: Shengfeng Logistics Group Co., Ltd.

Legal Representative: XXX Contact Person: XXX Mobile: XXXXXXXXXXX

Address: XXXXXXXXXXXXXXXXXXXXXX Postal Code: XXXXXX

Tel: XXXXXXXXXXX Fax: / Email: /

[Please ensure the borrower fills in the above information accurately and completely to ensure timely delivery of subsequent notices and legal documents]

The borrower and lender, through equal negotiation, have reached agreement on the matter of the lender extending a loan to the borrower, and hereby enter into this contract.

**PART ONE BASIC PROVISIONS**

**Article 1 Purpose of the Loan**

The loan under this contract shall be used for the following purpose. Without the lender's prior written consent, the borrower shall not divert the loan for other uses. The lender has the right to supervise the use of the loan proceeds.

Purpose of loan: Payment of freight charges

**Article 2 Loan Amount and Term**

2.1 The currency of the loan under this contract is RMB, and the amount is XXX,XXX,XXX.XX (in words: XXX). In case of discrepancy between figures and words, the written form shall prevail.

2.2 The term of this contract is determined by Method No. 1 (1/2) as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The loan term under this contract is XX months, calculated from the date of actual drawdown (for multiple drawdowns, from the date of first drawdown).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The loan term under this contract is from ___/___/___ to ___/___/___ .

2.3 For each drawdown, the drawdown date is the date the loan funds are actually credited to the borrower's account, and the repayment date is the repayment date recorded on the loan note (for installment repayments, executed per the repayment schedule agreed under this contract or separately agreed upon by the parties). The repayment date for any drawdown shall not exceed the loan term of this contract.

**Article 3 Interest Rate, Interest and Fees**

3.1 [RMB Loan Interest Rate Determination Method]

The RMB loan interest rate is determined as follows:

The interest rate for each loan is determined by adding a floating spread to the benchmark rate. The benchmark rate is the 1-year term Loan Prime Rate (LPR) published by the National Interbank Funding Center on the last business day before each loan's drawdown date (drawdown date/contract effective date) (first interest rate determination date). The floating spread is minus (add/subtract) 20 basis points (one basis point = 0.01%). The added spread remains unchanged during the loan term. For multiple drawdowns, each drawdown's interest rate is calculated separately. If the LPR for the relevant term is not published by the National Interbank Funding Center on the day before the interest rate determination date, the most recently published LPR by the center shall apply.

After the first interest rate determination date, regardless of whether drawdown has occurred, the loan interest rate shall be adjusted by Method A (A/B) as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. With 12 (1/3/6/12) months as one period, adjusted once per period on a segmented basis. The interest rate determination date for the second period and beyond is the corresponding date one full period after the first interest rate determination date. The lender adjusts the loan interest rate on that date based on the applicable LPR and floating spread published by the National Interbank Funding Center on the preceding business day. If the adjustment month has no date corresponding to the first interest rate determination date, the last day of that month applies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. No adjustment during the entire loan term.

3.2 [Foreign Currency Loan Interest Rate Determination Method]

The foreign currency loan interest rate is determined by Method ___/____ (1/2/3) as follows: [Sections not applicable are omitted]

3.3 Interest on this contract's loan accrues daily from the actual drawdown date, with interest settlement on a ___monthly (monthly/quarterly/semi-annual) basis. Upon maturity, any outstanding interest is repaid together with the principal. For loans in GBP, AUD, CAD, or SGD, the daily rate = annual rate/365; for other currencies, daily rate = annual rate/360.

3.4 For RMB loans, the penalty interest rate for overdue payments under this contract is the original loan rate plus 50%. For foreign currency loans, the overdue penalty interest rate is the original rate plus ___/_ basis points. The penalty interest rate for misappropriated loans is the original loan rate plus 50%.

3.5 In addition to interest, for undisbursed portions of the loan, the borrower shall also pay the lender a commitment fee. The commitment fee is calculated on the difference between the loan amount under Article 2 and the average daily outstanding balance during the fee period, at an annual rate of ___/___‰, payable in Method ___/___ (1/2): (1) as a lump sum upon expiry of the fee period; or (2) paid to the lender in installments on the 20th of each ___/___ (month/quarter/half-year) from contract effectiveness.

For installment commitment fee payments, if the borrower fails to pay on time, the lender has the right to suspend disbursements or cancel part or all of the borrower's undrawn loan.

**Article 4 Drawdown (Not Applicable to Revolving Loans)**

4.1 The borrower shall draw down the loan according to actual funding needs, by Method No. 1 (1/2/3):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) One-time drawdown by [DATE];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) One or more drawdowns from the contract effective date until ___/___/___ ;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Drawdowns per the schedule below; the borrower may change the drawdown timing or amount based on funding needs with lender's consent, but must draw down by ___ at the latest.

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| | |
|:---|:---|
| &nbsp;&nbsp; Drawdown Date | &nbsp;&nbsp;Drawdown Amount |
| &nbsp;&nbsp;/ | &nbsp;&nbsp;/ |
| &nbsp;&nbsp;/ | &nbsp;&nbsp;/ |
| &nbsp;&nbsp;/ | &nbsp;&nbsp;/ |

---

4.2 If the borrower fails to draw down as agreed, the lender has the right to cancel part or all of the borrower's undrawn loan.

**Article 5 Repayment**

5.1 The borrower shall repay the loan under this contract by Method No. 1 (1/2):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Lump sum repayment at maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Repayment in installments per the schedule below (attach additional pages if needed). Loans with interest rates determined by the floating overnight rate (Method 3 of Article 3.2, Part One) may not use equal principal and interest repayment.

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| | |
|:---|:---|
| &nbsp;&nbsp; Scheduled Repayment Date | &nbsp;&nbsp;Scheduled Repayment Amount |
| &nbsp;&nbsp;/ | &nbsp;&nbsp;/ |
| &nbsp;&nbsp;/ | &nbsp;&nbsp;/ |

---

5.2 For loans falling under the following circumstances, the borrower shall repay immediately upon receipt of the corresponding funds, and no prepayment penalty applies: /

5.3 Except as provided in Article 5.2, for prepayment, the borrower shall pay the lender a prepayment penalty calculated as: Prepayment Amount × Remaining Loan Term (months) × ___/___‰. Remaining months less than one month shall be counted as one month.

**Article 6 Special Provisions for Revolving Loans (Optional Clause — NOT APPLICABLE)**

[This article is not applicable per the contract.]

**Article 7 Security**

The security for the loan under this contract is a maximum amount security, with the corresponding maximum security contracts including but not limited to No. 1 (1/2/3, multiple selections allowed):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Maximum Guarantee Contract (Contract No.: XXXXXXXX)

Guarantors: Fujian Yunlian Shengfeng Industrial Co., Ltd.; XXX

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Maximum Mortgage Contract (Contract No.: /)

Mortgagor: /

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Maximum Pledge Contract (Contract No.: /)

Pledgor: /

**Article 8 Financial Covenants (Optional Clause — NOT APPLICABLE)**

During the validity of this contract, the borrower shall comply with the following financial indicators: /

**Article 9 Dispute Resolution**

The dispute resolution method under this contract is No. 1 (1/2):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Submit disputes to the Fuzhou Arbitration Commission for arbitration in Fuzhou in accordance with the effective arbitration rules at the time of submission. The arbitral award is final and binding on both parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Resolved through litigation at the court where the lender is located.

**Article 10 Other Matters**

10.1 This contract is made in two (2) originals, one each for the borrower, lender, and ___/___; each original has equal legal effect.

10.2 The following attachments and other attachments mutually confirmed by both parties form an integral part of this contract and have equal legal effect:

Attachment 1: Drawdown Notice (Template)

Attachment 2: Entrusted Payment Agreement

Attachment 3: /

**Article 11 Other Matters Agreed Upon by Both Parties**

A. Any disputes arising from the performance of this contract shall first be resolved through negotiation. If negotiation fails, the dispute shall be submitted to the Fuzhou Arbitration Commission for arbitration in accordance with the applicable rules. The arbitral award is final and binding.

B. If submitted to arbitration, both parties agree to use summary procedures, and legal documents (including arbitration-related documents) shall be delivered to the residential address recorded in this contract by express mail (if changed, written notice shall be given). Delivery information entering the addressee's system constitutes valid delivery.

C. Both parties agree that after initiation of arbitration, the arbitration tribunal may make advance rulings if debt obligations can be ascertained; if a mortgage right exists without any other mortgage or seizure, the tribunal may authorize an auction agency to auction the mortgaged property, with proceeds applied first to repay the loan under this contract.

D. The loan under this contract is only for the borrower's daily business operations and shall not flow into fixed assets, equity investments, or other restricted areas.

E. A 4-month observation period is established; after the observation period, the borrower's loan repayments at this bank shall account for no less than the proportion of financing transactions.

F. The borrower shall regularly provide the lender with true and complete financial statements; and certify to the lender that the financial statements accurately reflect operating revenue, profit, assets, liabilities, and equity.

G. Without the lender's written consent, the borrower shall not pledge (mortgage) its effective operating assets or provide guarantees to third parties.

H. The borrower shall periodically report to the lender on external guarantees and commit to providing the lender with complete, accurate, and timely information on the lender's security amount. During the loan term, if financial indicators fall below the agreed standards (if any), the lender may declare the loan due immediately, require early repayment, suspend further disbursements, or require the borrower to provide legally valid and effective security acceptable to the lender.

I. If the borrower violates any of the above, the lender has the right to declare the financing due, recover part or all of the financing, or require the borrower to provide additional security.

**PART TWO SPECIFIC TERMS**

**Article 1 Interest Rate and Interest**

1.1 For foreign currency loans priced by term rate or floating overnight rate, the pricing benchmark on the interest rate determination date (T-day; if T-day is not a business day, the nearest preceding business day is used) is the rate value for T-N business days corresponding to the pricing benchmark as shown on Reuters or Bloomberg terminals. If the pricing benchmark is negative, it is treated as zero. Business day means the business day in the jurisdiction of the pricing benchmark management institution. For term rates, N = 2; for floating overnight rates, N = 5.

For avoidance of doubt, the SOFR term rate under this contract refers to the SOFR term rate published by the CME Group (CME) as recognized by the Alternative Reference Rates Committee (ARRC); the SONIA term rate refers to the SONIA term rate published by Refinitiv.

If the pricing benchmark undergoes a material change, the prevailing market rules at the time shall apply. If the lender requires the borrower to sign a supplemental agreement on related matters, the borrower shall cooperate.

1.2 For floating rate loans under this contract, the interest rate adjustment rules remain the same after default.

1.3 For monthly settlement, the settlement date is the 20th of each month; for quarterly settlement, the 20th of the last month of each quarter; for semi-annual settlement, June 20 and December 20 each year.

1.4 The first interest period runs from the actual drawdown date to the first settlement date; the last interest period runs from the day following the end of the second-to-last period to the final repayment date; other periods run from the day following the end of the previous period to the next settlement date.

1.5 Loan Interest = Loan Principal × Daily Interest Rate × Actual Days Used.

For loans with interest calculated using a combined simple-compound interest method (Method 3 of Article 3.2), the accrual rules are: for the benchmark-rate portion, daily interest = (loan principal + accumulated daily interest from the preceding day) × applicable daily benchmark rate; for non-business days, the interest equals that of the nearest preceding business day; however, if the principal changes, the interest shall be recalculated accordingly. The spread portion uses simple interest.

For equal principal and interest repayment, the monthly payment formula is:

Monthly Payment = [Loan Principal × Period Rate × (1 + Period Rate)^n] / [(1 + Period Rate)^n - 1]

1.6 If the People's Bank of China adjusts the loan interest rate determination method and applies it to loans under this contract, the lender will comply with the PBOC's relevant regulations without separately notifying the borrower.

1.7 Where the loan interest rate under this contract is set below the LPR published by the National Interbank Funding Center, the lender has the right to re-evaluate the interest rate discount annually and may, at its discretion, partially or fully withdraw such discount based on national policy, borrower creditworthiness, and collateral conditions, with timely notification to the borrower.

1.8 Unless otherwise specified, the loan interest rate in this contract is an annualized rate calculated using simple interest.

**Article 2 Loan Disbursement and Payment**

2.1 The borrower must meet the following preconditions for drawdown; otherwise the lender has no obligation to disburse any funds, except where the lender agrees to disburse in advance:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except for credit loans, the borrower has provided security acceptable to the lender and completed all related security formalities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) No default event has occurred under this contract or any other contract signed between the borrower and lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The loan purpose documentation provided is consistent with the agreed purpose;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Other materials required by the lender have been submitted.

2.2 Documents provided by the borrower at drawdown shall be originals; if originals cannot be provided, copies stamped with the borrower's official seal may be provided with the lender's consent.

2.3 The borrower shall submit a drawdown notice to the lender at least 5 banking business days before drawing. Once submitted, the notice cannot be withdrawn without the lender's written consent. The borrower shall affix its official seal or financial seal on the loan note corresponding to the reserved account used as the disbursement account.

For notes bearing both official seal and financial seal, affixing either seal on the loan note shall constitute a valid loan note.

2.4 When the lender approves the drawdown, it credits the loan to the designated borrower account, which is deemed to constitute disbursement of the loan by the lender in accordance with this contract.

2.5 Pursuant to regulatory requirements and the lender's management policies, loans exceeding a certain amount or meeting other conditions shall be disbursed through the lender's entrusted payment method. The lender shall, based on the borrower's drawdown application and payment authorization, transfer the loan funds to the payment recipient in compliance with the agreed purpose. For this purpose, the borrower and lender shall sign a separate entrusted payment agreement as an attachment to this contract, and a dedicated account shall be opened or designated at the lender's premises for entrusted payment.

**Article 3 Repayment**

3.1 The borrower shall repay the full loan principal, interest, and other payable amounts on time as agreed in this contract. On each repayment date and the banking business day before each settlement date, the borrower shall maintain sufficient funds in its repayment account at the lender. The lender has the right to debit the account on the repayment or settlement date, or require the borrower to cooperate in processing debit authorization.

If the funds in the repayment account are insufficient to cover all amounts due, the lender has the right to determine the repayment sequence.

If the repayment account is suspended, frozen, stopped, or cancelled, or if the borrower needs to change the repayment account, the borrower shall handle the account change formalities at the lender. Prior to the change taking effect, if the original account cannot be debited as required, the borrower shall visit the lender in person for repayment. Failure to update the account or appear in person resulting in delayed payments shall constitute a breach by the borrower.

3.2 For full or partial prepayment, the borrower shall submit a written application to the lender at least 10 banking business days in advance, obtain lender's consent, and pay the prepayment penalty per this contract.

3.3 Upon lender's approval of prepayment, the borrower shall settle all principal, interest, and other payable amounts from the prepayment date to the scheduled repayment date on the day of prepayment. For combined simple-compound interest calculations, any outstanding interest at the time of prepayment shall continue to accrue after the prepayment date until fully paid.

3.4 The lender has the right to call back the loan in advance based on the borrower's fund recovery situation.

3.5 If early repayment or early recall reduces the actual loan term, the interest rate tier shall not change; the original loan interest rate continues to apply.

**Article 4 Revolving Loans**

For revolving loans under this contract, during the revolving credit limit usage period, the total outstanding balance of the borrower's loans at any time shall not exceed the revolving credit limit, and the limit shall decrease progressively with repayments (the repayment amount specified in the circumstances under Article 5, Part One, is the amount to be deducted from the revolving credit limit at that time).

**Article 5 Security**

5.1 Except for credit loans, the borrower shall provide valid and legally effective security acceptable to the lender for its obligations under this contract. The security contract shall be signed separately.

5.2 If the collateral under this contract is damaged, depreciated, or subject to ownership disputes, or is seized or confiscated, or if the guarantor violates the guarantee contract, or if the guarantor's financial situation deteriorates unfavorably for the lender's creditor rights, the borrower shall promptly notify the lender and provide other security acceptable to the lender.

5.3 The lender has the right to periodically or irregularly reassess the value of the collateral and the guarantor's guarantee capacity. If the collateral's value decreases or the guarantor's capacity weakens, the borrower shall provide additional security equivalent to the decrease, or provide other security acceptable to the lender.

5.4 If accounts receivable are pledged as security for this contract, the lender may declare the loan immediately due and require the borrower to immediately repay part or all of the principal or provide additional legally valid and sufficient security acceptable to the lender in any of the following circumstances: (1) the bad debt ratio of the pledgor's receivables from the payment obligor increases for 2 consecutive months; (2) the outstanding overdue receivables from the payment obligor exceed 5% of the total receivables from that obligor; (3) a trade or debt dispute arises between the pledgor and payment obligor (including quality, technical, or service disputes) that may cause the receivables to be uncollectable on time.

**Article 6 Account Management**

6.1 The borrower shall designate a dedicated fund collection account at the lender for receiving corresponding sales revenue or planned repayment funds. For non-cash sales settlements, the borrower shall ensure timely crediting to the fund collection account upon receipt.

6.2 The lender has the right to monitor the fund collection account, including but not limited to understanding and supervising fund inflows and outflows. The borrower shall cooperate. If required by the lender, the borrower shall sign a dedicated account monitoring agreement with the lender.

**Article 7 Representations and Warranties**

The borrower makes the following representations and warranties to the lender, which remain effective throughout the validity of this contract:

7.1 The borrower has the legal capacity as a borrower and has the qualifications and ability to sign and perform this contract.

7.2 The signing of this contract has obtained all necessary authorizations or approvals, does not violate the borrower's articles of association or applicable laws and regulations, and is not in conflict with other contractual obligations.

7.3 The borrower operates legally and in compliance, has good creditworthiness, has paid all due debts, and has no intentional default on bank loans or interest.

7.4 The borrower has a sound organizational structure and financial management system, has not committed any major violations in its production and operations in the past year, and current senior management has no major adverse records.

7.5 All documents and materials provided to the lender are true, accurate, complete, and valid, with no false records, material omissions, or misleading statements.

7.6 The financial and accounting reports provided to the lender are prepared in accordance with Chinese accounting standards, truthfully, fairly, and completely reflecting the borrower's operating and financial conditions, and no material adverse changes have occurred in the borrower's financial position since the latest financial report.

7.7 The borrower has not concealed any litigation, arbitration, or claims. There are no pending proceedings that may affect the borrower's ability to sign or perform this contract or repay debts hereunder.

7.8 The borrower has not concealed any events that have occurred or are occurring that may materially affect its financial condition or repayment ability.

**Article 8 Borrower's Undertakings**

8.1 Draw down and use the loan within the agreed period and for the agreed purpose. The loan proceeds shall not be used for shareholder dividends, bonuses, fines, financial assets, fixed assets (except for loans below RMB 500,000), or equity investments; shall not be used to falsify fiscal revenue or increase implicit local government debt; shall not flow into real estate markets in violation of regulations; shall not flow into the stock market, futures market, or any other areas prohibited or restricted by national laws, regulations, or regulatory policies.

8.2 Repay the loan principal, interest, and other payable amounts per this contract.

8.3 Accept and actively cooperate with the lender's oversight of loan payment management and fund usage through account analysis, voucher inspection, on-site investigations, and other means, including all loan purposes; regularly report on loan fund usage as required by the lender.

8.4 Accept the lender's credit inspections; provide balance sheets, income statements, and other financial accounting data and information reflecting the borrower's repayment capacity as required by the lender; actively assist and cooperate with the lender's investigation, understanding, and supervision of its production, operations, and financial conditions.

8.5 For matured (including declared immediately due) outstanding loan principal, interest, and other payable amounts under this contract, no dividends or profits shall be distributed in any form.

8.6 For mergers, divisions, capital reductions, equity changes, equity pledges, major asset and liability transfers, external guarantees, significant overseas investments, material increases in debt financing, and other actions that may adversely affect the lender's creditor rights, prior written consent of the lender shall be obtained or satisfactory arrangements for the realization of the lender's creditor rights shall be made.

8.7 Promptly notify the lender upon occurrence of any of the following: (1) changes in articles of association, business scope, registered capital, or legal representative; (2) dissolution, winding-up, liquidation, suspension of operations, revocation of business license, cancellation, or application for (or being subject to) bankruptcy; (3) involvement in or potential involvement in major economic disputes, litigation, or arbitration, or asset freezing, seizure, or supervision; (4) shareholders, directors, and current senior managers involved in major cases or economic disputes; (5) other major adverse events affecting repayment ability.

8.8 Timely, fully, and accurately disclose related-party relationships and related-party transactions to the lender.

8.9 Timely receive all notices sent or delivered by the lender.

8.10 Dispose of self-owned assets (including but not limited to asset transfers, setting up security interests, establishing trusts, securitization) in a manner that does not reduce repayment capacity; provide guarantees to third parties without prejudicing the lender's rights.

8.11 If the loan under this contract is disbursed on a credit basis, regularly and accurately report external guarantee status to the lender, and sign an account monitoring agreement as required.

8.12 Bear all costs incurred by the lender in realizing its creditor rights under this contract, including but not limited to attorney fees and auction fees.

8.13 The repayment priority of debts under this contract is senior to the borrower's debts to its shareholders and at least pari passu with the borrower's debts to other creditors.

8.14 If repayment funds (including but not limited to funds obtained by the lender through set-off or disposal of pledged assets) are insufficient to repay all debts owed to the lender under this contract and other contracts, the lender has the right to determine the repayment order.

8.15 Strengthen environmental, social, and governance (ESG) risk management and accept the lender's inspection. Provide the lender with ESG reports as required.

**Article 9 Lender's Undertakings**

9.1 Disburse the loan to the borrower as agreed in this contract.

9.2 Keep confidential the non-public information and materials provided by the borrower, except as otherwise required by law or stipulated in this contract.

**Article 10 Default**

10.1 Any of the following constitutes a borrower default:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The borrower fails to repay loan principal, interest, and other payable amounts under this contract, or fails to perform any other obligation under this contract, or makes false representations, warranties, or undertakings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The security under this contract becomes adverse to the lender's creditor rights, or the guarantor breaches the guarantee contract, and the borrower fails to provide other acceptable security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The borrower fails to repay any other matured (including declared immediately due) debts, or breaches other agreements in ways that have or may affect its performance under this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The borrower's profitability, solvency, operating capacity, and cash flow indicators breach the agreed standards or deteriorate, having or potentially having an impact on performance under this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Material adverse changes in the borrower's equity structure, production operations, or external investments have occurred or may affect its performance under this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) The borrower is involved in or may be involved in major economic disputes, litigation, arbitration, asset freezing, seizure, or compulsory execution, or is investigated by judicial or administrative authorities, or penalized, or media-exposed for regulatory violations, having or potentially having an impact on performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Major investors, key management persons go missing or are investigated or restricted by judicial authorities, having or potentially having an impact on performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) The borrower uses sham contracts with related parties, transactions without real trading background, to obtain the lender's funds or credit, or evades the lender's creditor rights through related-party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) The borrower has or may dissolve, wind up, liquidate, suspend operations, have its business license revoked, be cancelled, or apply for (or be subject to) bankruptcy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) The borrower violates laws and regulations on food safety, production safety, environmental protection, and other ESG matters, causing liability accidents or major ESG risk events that have or may affect performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) For credit loans, the borrower's credit rating, profitability, asset-liability ratio, or operating cash flow do not meet the lender's credit loan conditions; or the borrower, without the lender's written consent, pledges/mortgages its effective operating assets to others or provides external guarantees, affecting performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Abnormal use of loan funds or non-compliance with entrusted payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) Other circumstances that may adversely affect the realization of the lender's creditor rights.

10.2 Upon borrower default, the lender has the right to take one or more of the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Require the borrower to rectify the default within a specified time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Adjust the payment method of the loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Reduce the credit line to the borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Adjust the interest rate of disbursed and/or undisbursed loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Suspend disbursements under this contract and other contracts with the borrower, partially or fully cancel undrawn loans and other financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Declare all outstanding loans and other financing under this contract and other contracts with the borrower immediately due and collect all outstanding amounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Require the borrower to compensate the lender for losses caused by the default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Other measures required by law, this contract, or deemed necessary by the lender.

10.3 Upon loan maturity (including declared immediately due), if the borrower fails to repay as agreed, the lender has the right to charge penalty interest from the overdue date at the overdue penalty rate per this contract. For interest not paid on time (including penalty interest and compound interest), compound interest is charged at the overdue penalty rate. The accrual rules for penalty/compound interest follow the interest settlement rules in this contract.

10.4 If the borrower uses the loan for unauthorized purposes, the lender has the right to charge penalty interest on the misappropriated portion from the date of misappropriation at the misappropriation penalty rate. For interest not paid on time during misappropriation (including penalty interest and compound interest), compound interest is charged at the misappropriation penalty rate.

10.5 If both circumstances under Articles 10.3 and 10.4 apply simultaneously, the higher penalty rate applies; they cannot be applied concurrently.

10.6 If the borrower fails to repay loan principal, interest (including penalty interest and compound interest), or other payable amounts on time, the lender has the right to publicly collect via media.

10.7 If control or controlled relationships between the borrower's related parties and the borrower change, or the borrower's related parties experience any of the circumstances under Article 10.1 (other than (1) and (2)) that have or may affect the borrower's performance under this contract, the lender has the right to take all measures provided under this contract.

**Article 11 Automatic Cancellation of Lending Commitments**

11.1 If the borrower's credit status deteriorates, the lender may automatically cancel all outstanding lending commitments to the borrower without prior notice.

11.2 The occurrence of any event under Articles 10.1 and 10.7 of Part Two constitutes deterioration of the borrower's credit status.

**Article 12 Set-off**

12.1 If the borrower fails to repay matured (including declared immediately due) debts under this contract as agreed, the borrower agrees that the lender may set off the corresponding amounts from any RMB or foreign currency accounts the borrower holds at ICBC until all debts under this contract are fully repaid. If the set-off funds are insufficient to repay all debts under this contract or other contracts, the lender has the right to determine the repayment order.

12.2 If the currency of the set-off funds differs from the contract currency, the conversion shall be done at the lender's applicable exchange rate on the set-off date. Interest and other costs generated between the set-off date and settlement date (the date the lender converts the funds into the contract currency and actually repays the debt) and exchange differences due to currency fluctuations shall be borne by the borrower.

**Article 13 Assignment of Rights and Obligations**

13.1 The lender has the right to assign part or all of its rights under this contract to a third party without the borrower's consent. Without the lender's written consent, the borrower may not assign any of its rights and obligations under this contract.

13.2 The lender or Industrial and Commercial Bank of China Co., Ltd. ('ICBC') may, based on operational management needs, authorize or entrust other ICBC branches to exercise rights and obligations under this contract, or transfer the loan creditor rights under this contract to other ICBC branches for management. The borrower acknowledges this and such actions require no further consent from the borrower. The ICBC branch accepting the rights and obligations has the right to exercise all rights under this contract and may file litigation, request arbitration, or apply for enforcement in its own name.

**Article 14 Effectiveness, Amendment, and Termination**

14.1 This contract becomes effective upon affixing of official seals or contract-specific seals by both parties and remains effective until the borrower has fully performed all obligations under this contract.

14.2 Any amendment to this contract shall be agreed upon by both parties and made in writing. The amended terms or agreement form part of this contract with equal legal effect. The remaining terms of the contract remain effective except for the amended portions; the original terms remain effective until the amendments take effect.

14.3 The amendment and termination of this contract do not affect the right of either party to claim damages. The termination of this contract does not affect the validity of the dispute resolution clause.

**Article 15 Applicable Law and Dispute Resolution**

The establishment, validity, interpretation, performance, and dispute resolution of this contract are governed by the laws of the People's Republic of China. Any dispute or controversy arising from or related to this contract shall first be resolved through negotiation; if negotiation fails, the dispute shall be resolved as stipulated in this contract.

**Article 16 Confirmation of Address for Service of Litigation/Arbitration Documents**

16.1 The borrower confirms that the address recorded on the cover page of this contract is the service address for litigation/arbitration documents related to disputes under this contract. The borrower agrees that judicial authorities (including but not limited to people's courts) / arbitration institutions may use the fax number, mobile phone, email, and other electronic contact information recorded on the cover page to electronically serve legal documents, including but not limited to case acceptance notices, fee payment notices, defense notices, evidence notices, litigation rights and obligations notices, summonses, hearing notices, judgments (including verdicts, rulings, mediation letters), compliance notices, evidentiary materials, etc.

16.2 The borrower agrees that judicial authorities/arbitration institutions may serve legal documents by one or more of the above methods. For multiple methods, the earliest delivery time applies. Delivery is complete when the information reaches the system of the delivery address. If the recipient is absent, rejects delivery, or the delivery is returned unaccepted, the postal return date is the date of service. For electronic service, the date shown as sent in the court/arbitration institution system is the service date.

16.3 The above service provisions apply to all stages of arbitration, litigation, and other judicial proceedings, including first instance, second instance, retrial, execution, and supervision procedures.

16.4 The borrower shall ensure the accuracy and validity of the address, contact persons, fax, mobile phone, email, and other information recorded in this contract. If any information changes, the borrower shall promptly notify the lender in writing. If the electronic service address changes during litigation/arbitration, the contracting party shall notify the counterparty and the court/arbitration institution in writing at least 3 business days in advance; otherwise, service to the original address (including electronic service) remains valid, and the borrower bears all resulting legal consequences.

16.5 The provisions of this clause are special terms expressly agreed to by all parties to this contract and are effective independently of other provisions. Regardless of whether other provisions are held invalid or revoked by judicial authorities, arbitration institutions, or other competent authorities, this clause remains valid.

**Article 17 Entire Agreement**

Part One (Basic Provisions) and Part Two (Specific Terms) together constitute a complete Working Capital Loan Contract. The same terminology in both parts has the same meaning. The borrower's loan under this contract is governed by both parts jointly.

**Article 18 Notices**

18.1 All notices under this contract shall be made in writing. Unless otherwise agreed, both parties designate the addresses recorded in this contract as communication and contact addresses. Either party shall promptly notify the other in writing of any change in communication address or contact method.

18.2 If either party refuses to accept service or other situations where delivery cannot be made, the notifying party may serve by notarial means or public announcement.

**Article 19 Special VAT Provisions**

19.1 The interest and fees payable by the borrower to the lender under this contract are inclusive of VAT.

19.2 If the borrower requests the lender to issue a VAT special invoice, it shall first complete information registration at the lender, including full company name, taxpayer identification number or social credit code, address, telephone, bank, and account number. The borrower shall ensure the accuracy and completeness of such information and provide supporting documentation as required by the lender.

19.3 For self-collection of VAT invoices, the borrower shall provide the lender with a sealed authorization letter designating the collector's identity, and the designated collector shall collect the invoice with the original ID document. The designated collector shall re-issue a sealed authorization letter to the lender each time. For mailed invoices, the borrower shall provide accurate and deliverable mailing information; any changes shall be notified to the lender in writing promptly.

19.4 Due to natural disasters, government actions, abnormal social events, force majeure, or tax authority reasons, if the lender cannot issue VAT invoices on time, the lender may delay issuance without bearing any liability.

19.5 If VAT invoices are lost or damaged after collection by the borrower or during third-party mailing for reasons not attributable to the lender, resulting in the borrower's inability to obtain corresponding VAT invoice deductions, the lender shall not be liable for any resulting economic losses.

19.6 In cases of sales returns, service suspension, issuance errors, or sales discounts, the borrower shall return the original invoice or provide effective proof to the lender for invoice cancellation or red-letter invoice issuance. If a red-letter VAT special invoice is required and must be submitted to the tax authority by the borrower per applicable laws and regulations, the borrower shall submit the application to the tax authority and notify the lender for issuance after tax authority review.

19.7 During the performance of this contract, if national tax rates are adjusted, the lender has the right to adjust the contractual price accordingly.

**Article 20 Other**

20.1 The lender's failure to exercise, partial exercise, or delay in exercising any right under this contract does not constitute a waiver or modification of that right or other rights, and does not affect its further exercise of that right or other rights.

20.2 The invalidity or unenforceability of any clause of this contract does not affect the validity and enforceability of other clauses, nor the overall effect of this contract.

20.3 Terms such as 'related party,' 'related-party relationship,' 'related-party transactions,' 'major investors,' and 'key management persons' in this contract have the same meaning as the corresponding terms in Accounting Standard for Business Enterprises No. 36 — Related Party Disclosures (Cai Kuai [2006] No. 3) issued by the Ministry of Finance and its subsequent amendments.

20.4 'Environmental, social, and governance risks' in this contract refers to risks arising from the governance deficiencies and management failures of the borrower and its major subcontractors, suppliers, and other key related parties in their construction, production, and operational activities that may cause harm to the environment and society, including but not limited to energy consumption, pollution, land, health, safety, relocation, ecological protection, and climate change-related environmental and social issues.

20.5 Records and vouchers prepared by the lender in accordance with business regulations for loans under this contract constitute valid evidence of the creditor-debtor relationship between the parties and are binding on the borrower.

20.6 During the validity of this contract, if the promulgation or amendment of any law, national policy, or regulatory provision makes it impossible for the lender to continue performing this contract or any clause hereof, the lender has the right to cancel undisbursed loans and take other measures deemed necessary pursuant to relevant regulations.

20.7 In this contract: (1) any reference to this contract includes amendments or supplements thereto; (2) section headings are for reference only and do not constitute any interpretation of or limitation on the content or scope of this contract.

Both parties confirm: the borrower and lender have fully negotiated all terms of this contract. The lender has specifically drawn the borrower's attention to all terms regarding both parties' rights and obligations, for complete and accurate understanding, and has explained and clarified the relevant clauses at the borrower's request. The borrower has carefully read and fully understands all contract terms (including Part One — Basic Provisions and Part Two — Specific Terms). Both parties have a completely consistent understanding of all contract terms and have no objection to the content of this contract.

(No text below)

(This page is the signature page of the contract, no main text)

Lender (Seal): Industrial and Commercial Bank of China Co., Ltd. Fuzhou Jin'an Branch

Date: XXX XX, 20XX

Borrower (Seal): Shengfeng Logistics Group Co., Ltd.

Date: XXX XX, 20XX

As the legal representative/authorized representative of the borrower, I hereby confirm that the borrower borrows from the lender as agreed in this contract, that the seals affixed on this contract are authentic and valid, and that all formalities required for the borrowing have been completed.

Legal Representative/Authorized Representative of Borrower (Seal): XXX

## Exhibit 4.19

**Exhibit 4.19**

**Credit Facility Agreement**

(Version 202401)

**HAIXIA BANK OF FUJIAN**

**NOTICE TO CUSTOMERS**

Dear Customer,

Before signing this Agreement, please read carefully the following matters:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. You must carefully read all the contents of this Agreement (including schedules, same below), paying special attention to clauses that exempt or reduce our liability, exclude or restrict your rights, and other clauses materially affecting your interests, especially those in bold. If you have any questions or are unclear about any content of this Agreement or have difficulty reading it, please consult our staff immediately and we will explain it to you promptly. Once this Agreement is signed, it shall be deemed that all parties have understood and agreed to all terms and conditions of this Agreement. We will sincerely provide you with quality financial services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. For the purpose of processing this Agreement's business, all financial information you provide to us will be kept strictly confidential. However, this does not apply where required by our business operations or by competent authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The standards for our financial service projects, fees, and the standards for financial products and services can be queried through our business outlets or official website (www.fjhxbank.com).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. If you have any comments on our products or services, you may file a complaint through any of the following channels and we will accept and respond promptly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Complain in person to the complaint contact publicized at each outlet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Call our 24-hour customer service hotline 400-XXX-XXXX or the complaint telephone at each outlet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Send an email to XXXX@fjhxbank.com;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Write a letter to the branch manager's mailbox at each outlet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. In order to better provide you with quality, convenient, and efficient financial services, during your business processing or consultation with our customer service, we may require you to sign relevant declaration documents or conduct audio/video recording.

Thank you for your strong support and cooperation. We wish you a pleasant banking experience!

Haixia Bank of Fujian Co., Ltd.

**PART ONE — GENERAL TERMS AND CONDITIONS**

Contracting Parties

Credit Recipient (hereinafter referred to as Party A): See Article 44(1) of this Agreement.

Credit Grantor (hereinafter referred to as Party B): See Article 44(2) of this Agreement.

In order to establish and develop a long-term, stable and friendly cooperative relationship, Party A and Party B, on the basis of voluntariness, equality, mutual benefit and good faith, and through mutual consultation, hereby enter into this Agreement for joint compliance and performance.

**Chapter 1 Definitions**

**Article 1 Credit Facility**

The term "credit facility" as used in this Agreement refers to Party B directly providing financial support to Party A, or providing guarantees for compensation and payment obligations that may arise from Party A in its economic activities. Types of credit facility include loans, loan commitments, acceptances, discounts, securities repurchase, trade finance, factoring, letters of credit, guarantees, overdrafts, collateral security, issuance of letters of credit for loans, and other credit businesses agreed upon by both parties.

**Article 2 Credit Limit**

The term "credit limit" as used in this Agreement refers to the maximum amount of credit facility that Party B agrees to process for Party A during the credit period. The aforementioned "maximum amount" does not include the margin and the amount of pledge deposit that Party B agrees to deduct. If outstanding debts occupy the credit limit under this Agreement, when using the credit limit under this Agreement to process rollover loans, revolving repayment and similar businesses to repay such outstanding debts, the old debts being repaid shall not occupy the credit limit under this Agreement.

**Article 3 Specific Business**

The term "specific business" as used in this Agreement refers to loans, loan commitments, acceptances, discounts, securities repurchase, trade finance, factoring, letters of credit, guarantees, overdrafts, collateral security, issuance of letters of credit for loans, and other businesses actually occurring under this Agreement, as well as specific business items actually occurring under the foregoing business categories.

**Article 4 Specific Business Contract**

The term "specific business contract" as used in this Agreement refers to the individual contract entered into by Party A and Party B for the purpose of conducting the foregoing specific business, as well as applications, commitments, guarantees or other documents of a contractual nature submitted or made by Party A to Party B during the course of specific business transactions that are recognized by Party B as effective. Specific business contracts are an integral part of this Agreement. Where a specific business contract and this Agreement contain inconsistent provisions regarding the same matter, the provisions of the specific business contract shall prevail.

**Chapter 2 Credit Limit**

**Article 5 Type and Amount of Credit Facility**

See Article 45 of this Agreement.

**Article 6 Credit Period**

See Article 46 of this Agreement.

**Article 7 Use of Credit Limit**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) During the credit period, Party A may apply to Party B to use the corresponding limit within the limit range of each individual credit facility as stipulated in Article 45 of this Agreement, and after Party B's approval, both parties shall sign a specific business contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Within the credit limit, the amount of non-USD foreign currency business provided by Party B to Party A under a single foreign currency credit facility shall be converted into USD at the middle exchange rate published by Party B on the date of use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If Party A needs to convert a certain individual credit limit stipulated in Article 45 of this Agreement into another individual credit limit, Party A shall submit a written application to Party B, and the conversion may only be made after Party B's approval.

**Article 8 Preconditions for Use of Credit Limit**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The specific business application complies with national policies, financial regulatory authorities' management guidelines and Party B's requirements at the time of application.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The relevant specific business contract has come into effect and the basic documents required for processing the business have been prepared.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The guarantee procedures required by Party B have been duly handled and remain continuously valid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Other preconditions: See Article 47 of this Agreement.

**Article 9 Adjustment or Cancellation of Credit Limit**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) During the credit period, Party A may apply to Party B to adjust the credit limit according to its needs, and Party B may adjust it after review and approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) During the credit period, if any of the following circumstances occur, Party B may reduce or cancel Party A's credit limit:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A fails to perform any obligation under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The guarantor fails to perform any obligation under the guarantee legal documents, or the guarantor (collateral) has circumstances that may affect Party B's realization of its security interest, and Party A is unable to provide new collateral that meets Party B's requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party A fails to perform any commitment made to Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Party A experiences suspension of production, business closure, suspension for rectification, revocation of business license, dissolution, filing for bankruptcy, and Party A's management (including but not limited to Party A's actual controllers, controlling shareholders, legal representatives, senior management personnel, financial officers, etc.) is subjected to judicial measures or held administratively or criminally liable, shareholder changes or changes in shareholding by shareholders, involvement in litigation or arbitration, serious operational difficulties, and financial deterioration and other events that may affect Party A's performance of repayment obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The first-use period of the credit limit stipulated in Article 46 of this Agreement has expired and Party A has still not started using the available credit limit under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Other circumstances that objectively require reduction or cancellation of Party A's credit limit.

**Article 10 Fund Collection**

For matured debts owed by Party A to Party B under this Agreement (including debts accelerated to maturity), Party B may directly debit from accounts opened by Party A at Party B and other institutions of Haixia Bank of Fujian Co., Ltd.

**Chapter 3 Guarantee**

**Article 11**

Regarding guarantee matters, Party B and the guarantor shall separately enter into a guarantee contract or the guarantor shall issue documents with guarantee effect, as ancillary contracts to this Agreement.

**Article 12**

During the processing of specific business under the credit limit of this Agreement, Party B may, based on actual circumstances, require Party A to separately provide or supplement other guarantees.

**Article 13**

When the collateral or pledged property securing the debts under this Agreement is or may be subject to demolition, expropriation or requisition, Party A shall notify Party B within three days from the date of knowing or should have known such demolition, expropriation or requisition information. Before the mortgagor or pledgor signs the relevant agreement with the demolition, expropriation or requisition unit, Party A shall repay the debts under this Agreement in advance or provide other guarantees that meet Party B's requirements. Otherwise, it shall be deemed that Party A is in breach of contract and Party B may exercise its creditor's rights in advance.

**Article 14**

When Party A signs this Agreement, Party A is already aware of the guarantor and the collateral situation.

**Chapter 4 Rights and Obligations of Both Parties**

**Article 15 Rights and Obligations of Party A**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Party A has the right to use each credit limit in accordance with the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The funds obtained by Party A under this Agreement shall be used for the agreed purpose. If Party A needs to change the use of funds, Party A shall obtain Party B's written consent in advance. Party A shall not violate regulations by newly adding local government implicit debts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Party A shall provide operating, asset, financial and other relevant information as required by Party B in a timely manner. Party A guarantees that the information provided is true, lawful, complete and valid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Party A undertakes to cooperate with Party B in post-loan management. Party A shall accept Party B's inspection and supervision of the specific conditions of its use of various limits and the relevant production and operation, financial activities, and asset conditions, and shall provide sufficient cooperation and assistance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Party A shall strictly repay all amounts owed to Party B on time and in full in accordance with the provisions of this Agreement and specific business contracts. Where Party A consists of two or more persons, each party of Party A shall assume joint and several liability to Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Before all debts under this Agreement are paid off, Party A shall not provide guarantees to third parties with assets formed by funds provided by Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) When Party A implements any action that may cause changes in the creditor-debtor relationship under this Agreement or may affect its performance of obligations under this Agreement (including but not limited to reduction of registered capital, assumption of debt, lease, joint operation, trusteeship, merger, absorption merger, demerger, equity transfer, shareholding system reform, joint venture, cooperation, application for suspension for rectification, application for dissolution, application for deregistration, application for bankruptcy, transfer of major assets, purchase of major assets, and foreign investment, provision of external guarantees or material increase in liability financing that may affect its debt repayment capacity), Party A shall notify Party B in writing 15 working days in advance, obtain Party B's consent in advance, and fulfill the obligations under this Agreement and the guarantee as required by Party B before implementation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) During the performance of this Agreement, Party A shall not have any major adverse events that may affect its debt repayment capacity. Such events include but are not limited to suspension of production, business closure, suspension for rectification, revocation of business license, dissolution, filing for bankruptcy, Party A's management (including but not limited to Party A's actual controllers, controlling shareholders, legal representatives, senior management personnel, financial officers, etc.) being subjected to judicial measures or held administratively or criminally liable, shareholder changes or changes in shareholding by shareholders, Party A's involvement in litigation or arbitration, serious operational difficulties, and financial deterioration. If any of the above circumstances occur to Party A, Party A shall immediately notify Party B in writing and fulfill the obligations and guarantees under this Agreement as required by Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Party A shall notify Party B in writing within 5 working days of any change in name, address, articles of association, business scope, legal representative (or person in charge), or other senior management personnel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) If an event occurs that may affect the guarantor's ability to perform its guarantee obligations under this Agreement, or if the collateral or pledged property securing the loan under this Agreement decreases in market value, is accidentally damaged or destroyed, Party A shall notify Party B in writing promptly and provide other guarantees recognized by Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) If Party A fails to perform this Agreement, Party A shall bear the costs incurred by Party B in realizing its creditor's rights (including security interests) (including but not limited to litigation fees (arbitration fees), property preservation fees, attorney's fees, travel expenses, execution fees, appraisal fees, auction fees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Special provisions regarding credit facilities for group customers

If Party A is a group customer (hereinafter referred to as "group customer", including group customers recognized under the Guidelines for Risk Management of Credit Business for Group Customers of Commercial Banks and other relevant regulations), the following special provisions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A shall report to Party B in a timely manner the circumstances of related party transactions accounting for 10% or more of net assets, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The related relationship between transaction parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The subject matter and nature of the transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The amount or corresponding proportion of the transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Pricing policy (including transactions with no amount or only symbolic amounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. If Party A applies for loan credit and any of the following circumstances occur, Party B may stop disbursing loans that Party A has not yet used, and recover part or all of the principal and interest of loans in advance:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Providing false information or concealing major operating and financial facts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Changing the original designated purpose of the loan without Party B's consent, misappropriating the loan or using bank loans for illegal and non-compliant transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Using fictitious contracts with related parties to discount or pledge receivable bills and accounts receivable with no actual trade background, to obtain bank funds or credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Refusing to accept Party B's supervision and inspection of the use of credit funds and related operating and financial activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Situations involving major mergers, acquisitions and restructuring that Party B considers may affect the safety of loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Deliberately evading bank creditor's rights through related party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Other circumstances that may affect Party B's interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) Special provisions regarding Party A's operating and license period

If the expiry date of the relevant operating period or license period recorded in Party A's business license is earlier than the maturity date of any debt of Party A under this Agreement, in order to ensure Party A's performance of its various obligations under this Agreement, Party A undertakes to properly handle the relevant extension or renewal procedures before the expiry of such period, and submit the renewed business license to Party B for retention.

If Party A fails to perform the above-mentioned obligations, it shall constitute a breach of this Agreement, and Party B may require Party A to repay the debts in advance and exercise other relevant rights.

The aforementioned business licenses include but are not limited to: business licenses, approval certificates (for foreign-invested enterprises), real estate title certificates, construction project related certificates, and various certificates, documents and authorizations required by law for normal business operations based on Party A's institutional nature and business scope.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) Party A has the right to apply to a nationally designated notary authority to notarize this Agreement, and Party B shall cooperate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) Other rights and obligations enjoyed and assumed by Party A in accordance with specific business contracts.

**Article 16 Rights and Obligations of Party B**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Party B may require Party A to provide information related to the credit facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Party B may inspect and supervise the specific conditions of Party A's use of various limits and relevant production and operation, financial activities, and asset conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Party B may accept, review and approve Party A's applications to use the credit limit in accordance with relevant business regulations and the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If Party A maliciously exercises its due creditor's rights and causes damage to Party B, Party B may request the people's court in its own name to exercise the subrogation right on behalf of Party A. The costs of Party B's exercise of subrogation (including but not limited to litigation fees (arbitration fees), property preservation fees, attorney's fees, travel expenses, execution fees, appraisal fees, auction fees) shall be borne by Party A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) If Party A disposes of its property rights and interests in a manner that damages Party B's realization of its creditor's rights through the abandonment of creditor's rights, waiver of security, gratuitous transfer of property, or maliciously extends the performance period of its due creditor's rights; or conducts transactions at obviously unreasonable prices to buy and sell assets or conduct other transactions (including but not limited to exchanging property, using property for debt repayment, leasing or subleasing property, or licensing use of intellectual property), or provides guarantees for debts of others, affecting Party B's realization of its creditor's rights, and Party A's counterpart knows or should know such circumstances, Party B may also request the people's court to rescind Party A's actions. The costs of Party B exercising the right of rescission (including but not limited to litigation fees (arbitration fees), property preservation fees, attorney's fees, travel expenses, execution fees, appraisal fees, auction fees) shall be borne by Party A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) In Party A's application for credit facility from Party B and during the performance of this Agreement and specific business contracts hereunder, Party A agrees that Party B may, for the purposes of this Agreement, query, collect, use Party A's financial information and credit status from the credit database established with the approval of the People's Bank of China and credit reporting regulatory authorities or relevant units and departments, for use in credit applications and approvals related to this Agreement, credit management, credit services or other purposes permitted by regulatory authorities, and agrees that Party B shall submit Party A's information to the credit database established with the approval of the People's Bank of China and credit reporting regulatory authorities. Party A agrees that Party B may also reasonably use and disclose Party A's information for business or debt collection purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Party B may participate in Party A's major financing, asset sales, mergers and acquisitions, demergers, shareholding system reforms, bankruptcy liquidation and other activities to safeguard the security of its creditor's rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Party B may decide whether to recover the loan in advance based on Party A's fund recovery situation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) If Party A defaults, Party B may notify relevant departments or units and may make public announcements through news media to collect debts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Both Party A and Party B agree that a third party may apply to Party B to perform the obligations of Party A under this Agreement on behalf of Party A, and Party B may decide whether to accept the application. If Party B accepts the application, Party B may sign a related agreement (hereinafter referred to as the "Related Agreement") with the third party regarding the matters of performance on behalf of Party A. If the Related Agreement is inconsistent with this Agreement or the specific business contracts under this Agreement, the provisions of the Related Agreement shall prevail. If the third party fails to perform its obligations or performs them inconsistently with the agreement, Party A shall be liable to Party B for breach of contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Party B may apply to the nationally designated notary authority to notarize this Agreement, and Party A shall cooperate.

If an application is made for compulsory enforcement notarization, the method of bearing notarization costs shall be separately agreed upon by both parties. This Agreement, once notarized, shall have compulsory enforcement effect. Party A shall perform its repayment obligations in accordance with the provisions of this Agreement. If Party A fails to perform its obligations or performs them improperly, Party B may apply to the people's court with jurisdiction for compulsory enforcement, and Party A agrees to accept compulsory enforcement by judicial authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Other rights and obligations enjoyed and assumed by Party B in accordance with specific business contracts.

**Chapter 5 Provisions for Working Capital Loans**

**Article 17**

This chapter applies to the situation where Party A uses the loan limit under this Agreement to apply to Party B for working capital loans.

**Article 18 Use of Working Capital Loan Limit**

When Party A uses the loan limit under this Agreement to apply to Party B for working capital loans, each application shall be reviewed and approved by Party B, after which both parties shall sign the "Working Capital Loan Limit Use Agreement", which shall specifically specify the loan amount, purpose, term, interest rate and other matters. The "Working Capital Loan Limit Use Agreement" is a specific business contract under this Agreement, and such specific business contract shall take effect after being stamped with Party A's official seal and Party B's seal.

Party A's funds obtained by using the working capital loan limit shall not be used for equity investment in stocks and financial assets, fixed assets, and shall not be used in fields and purposes prohibited by the State for production and operation.

**Article 19 Loan IOU**

Each time Party A applies for a drawdown, Party A shall fill in the loan IOU and submit it to Party B.

If the loan amount, loan interest rate, and loan term recorded in the "Working Capital Loan Limit Use Agreement" are inconsistent with the loan amount, loan interest rate, and loan term recorded in the loan IOU, the loan amount, loan interest rate, and loan term recorded in the loan IOU shall prevail.

**Article 20 Loan Interest Rate**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The annual interest rate of working capital loans (calculated using the simple interest method) is recorded in the "Working Capital Loan Limit Use Agreement" and is determined based on the Loan Market Quotation Rate (LPR) published by the National Interbank Funding Center plus/minus basis points (one basis point being 0.01%).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The method of adjusting the loan interest rate shall be specified in the "Working Capital Loan Limit Use Agreement".

**Article 21 Loan Disbursement**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Prerequisites for loan disbursement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. For loans with guarantee under this Agreement, the guarantee procedures meeting Party B's requirements have been duly handled and remain continuously valid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A has filled in and submitted the loan IOU as required by Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Other prerequisites for loan disbursement shall be as specified in Article 48(1) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Party A shall open a settlement account at Party B for loan disbursement and payment, with the specific settlement account to be agreed upon in the "Working Capital Loan Limit Use Agreement".

**Article 22 Fund Payment**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Party A undertakes to cooperate with Party B in loan payment management, and agrees to accept Party B's management and control of the payment of loan funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The payment of loan funds under this Agreement shall be made by the method of entrusted payment by the lender or self-payment by the borrower. Party A shall provide records and data of the use of loan funds in a timely manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Entrusted payment by the lender

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Entrusted payment by the lender means Party B, based on Party A's drawdown application and payment authorization, pays the loan to Party A's trading counterpart that meets the agreed purpose of this Agreement through Party A's account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The circumstances under which the method of entrusted payment by the lender must be adopted shall be as agreed in the "Working Capital Loan Limit Use Agreement".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Where entrusted payment by the lender is adopted, Party A shall submit to Party B a written authorization for entrusted payment and commercial contracts signed with the trading counterpart and/or other transaction supporting materials. Party B may review the relevant transaction materials submitted by Party A before disbursing the loan to determine whether they meet the conditions. After Party B's review and approval, Party B shall pay the loan to Party A's trading counterpart through Party A's account based on Party A's payment authorization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Self-payment by the borrower

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Self-payment by the borrower means Party B, based on Party A's drawdown application, disburses the loan to Party A's account, after which Party A independently pays the loan to Party A's trading counterpart that meets the agreed purpose of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Except for fund payments that should be made by entrusted payment by the lender, fund payments may be made by self-payment by the borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Where self-payment by the borrower is adopted, Party A shall report to Party B monthly on the loan fund payment situation. Party B may verify whether the loan payment complies with the agreed purpose and whether there is any violation of the requirement for entrusted payment through account analysis, voucher inspection, on-site investigation, and other methods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Conditions for changing payment method and triggering change

If any of the following circumstances occur to Party A, Party B may change the loan payment method, stop or suspend the disbursement and payment of loan funds:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Credit conditions deteriorate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Business and financial conditions clearly trend downward;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Abnormal use of loan funds or evasion of entrusted payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Other major violations of the contractual provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Restrictions and prohibitions on loan fund payment

Where loan funds are paid by the method of entrusted payment by the lender, Party A shall not change the payment method at will, and it is prohibited to convert items that should be paid by entrusted payment by the lender into self-payment by the borrower in any form.

**Article 23 Loan Repayment**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Repayment principles

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Loans shall accrue interest on a daily basis. Daily interest rate = annual interest rate / 360. Loan interest shall be calculated from the date of loan disbursement based on the actual number of days of borrowing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Interest settlement method

The interest settlement period shall be agreed upon by both parties in the "Working Capital Loan Limit Use Agreement", with the disbursement date as the start of the interest accrual date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For a settlement period of "week", the settlement date shall be the date on which each settlement period expires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For a settlement period of "month", for loans disbursed on or before the 20th of the current month (inclusive), the first settlement date shall be the 20th of the month preceding the end of the first settlement period. For loans disbursed after the 20th of the current month, the first settlement date shall be the 20th of the last month of the first settlement period. Thereafter, the settlement period shall be calculated from the day following the first settlement date, and the 20th of the last month of each settlement period shall be the settlement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For a settlement period of "quarter", the settlement dates are March 20, June 20, September 20, and December 20 of each year. For settlement periods of two or more quarters, the last settlement date of the last quarter in each settlement period shall be the settlement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) For a settlement period of "half year", the settlement dates are June 20 and December 20 of each year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) For a settlement period of "year", the settlement date is December 20 of each year.

From the settlement date, Party B may debit the current period's interest, and Party A shall pay the current period's interest by the day following the settlement date (repayment date) at the latest. If payment is overdue, Party B may charge compound interest. On the loan maturity date, interest shall be repaid together with the principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party A's repayment shall be made in accordance with the principle of repaying old debts first before new debts. For payments made by Party A, Party B shall debit in the order of "previously owed interest (including compound interest) — previously owed principal — current interest — current principal". Party A confirms that Party B may change the aforementioned repayment order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. If Party A owes Party B multiple debts of the same type, and Party A's payment is insufficient to pay off all debts, Party B shall decide the obligation to be fulfilled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Party A agrees that Party B may directly debit from accounts opened by Party A at Party B and other institutions of Haixia Bank of Fujian Co., Ltd. to collect the principal and interest of due loans. Party A shall deposit sufficient funds in the repayment account before 18:00 on the repayment date and interest settlement date for repayment of the applicable interest. Otherwise, Party A shall bear the corresponding default liability for overdue repayment. If the repayment date and interest settlement date fall on a statutory holiday or rest day, and Party A's account balance is insufficient to debit the repayment principal before 18:00 on the first working day following the statutory holiday or rest day, during the grace period, the principal shall accrue interest at the normal loan interest rate agreed in this Agreement. If Party A still has not repaid in full when the grace period expires, interest and compound interest shall be calculated from the date before the grace period's repayment date and interest settlement date at the default interest rate stipulated in this Agreement. Party A agrees that Party B may debit the interest that Party A should repay from 18:00 the day before the repayment date, and that Party B may debit the interest that Party A should repay from 18:00 on the settlement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The repayment method shall be as agreed by both parties in the "Working Capital Loan Limit Use Agreement".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Early repayment

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. For early repayment by Party A, Party A shall submit a written application to Party B 15 working days before the repayment date. After Party B's consent, part or all of the principal may be repaid in advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. For early repayment by Party A, Party B shall not adjust the already collected loan interest calculated at the interest rate agreed in this Agreement. For the loan principal repaid early by Party A and the remaining principal, Party B shall collect interest at the agreed interest rate based on the actual number of days used. All interest accrued but not yet settled as of the date of early repayment shall be settled in full at the same time, without being subject to the restrictions of the interest settlement period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. After Party A repays part of the loan principal early, the remaining unpaid loan shall still be executed at the agreed loan interest rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. If Party A's loan is repaid early within 6 months of the loan, Party B may charge an early repayment compensation fee. The early repayment compensation fee shall not exceed 1% of the loan principal repaid in advance by Party A. If Party A is a micro or small enterprise or it is stipulated by laws and regulations that such fee shall not be charged, Party B shall not charge an early repayment compensation fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Fund return account management

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A's designated fund return account shall be as agreed in the "Working Capital Loan Limit Use Agreement".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A shall provide the fund flow of the fund return account to Party B in a timely manner. Party B may monitor Party A's aforementioned fund return account. Party B has the right to recover the loan in advance based on the fund return situation of Party A. When Party B deems necessary, Party A shall sign a fund return account management contract as required by Party B to manage the flow of funds in and out of the return account.

**Article 24 Liability for Breach of Contract**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any of the following circumstances shall constitute a breach of contract by Party A:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A fails to use the loan for the agreed purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A fails to repay the principal or interest of the loan within the agreed period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party A fails to make loan fund payments in the agreed manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Party A's financial indicators fall into any of the circumstances agreed in Article 48(2) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Party A is involved in a cross-default event, i.e., Party A defaults in any transaction or contract with any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Party A fails to perform any commitment made to Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Party A fails to perform any other due obligations to Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Party A fails to perform other obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. The guarantor fails to perform any obligation under the guarantee legal documents, or the guarantor (collateral) has circumstances that may affect Party B's realization of its security interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. The guarantor fails to timely handle the extension or renewal procedures for the validity period of real estate title certificates and other certificates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Party A or the guarantor is involved in litigation, arbitration, property preservation, enforcement, administrative penalties, suspected criminal offenses, loss of credit, suspension of production, business closure, merger, demerger, suspension for rectification, revocation of business license, dissolution, filing for bankruptcy, major changes in equity or assets, major losses, or deterioration of financial conditions, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. The actual controllers, controlling shareholders, legal representatives, key officers, financial officers, or other senior management of Party A or the guarantor are involved in litigation, arbitration, subjected to judicial measures, held administratively liable, suspected of criminal offenses, loss of credit, loss of contact, restricted from high consumption, or restricted from entry and exit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. The collateral is damaged, destroyed, or decreases in value, is frozen, sealed, garnished, pledged, or subjected to full or partial enforcement by the court, subject to third-party claims, transferred, leased, donated, replaced, or subjected to security interests, residential rights, easements, or other rights burden without Party B's written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. Party A violates regulations by newly adding local government implicit debts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. Other circumstances sufficient to affect Party B's realization of its creditor's rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Upon the occurrence of any of the circumstances described in paragraph (1) of this Article, Party B may exercise one or more of the following rights and hold Party A legally liable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Reduce the credit limit, adjust the loan payment method, adjust the loan interest rate, stop or suspend disbursement of undisbursed loans, treat all disbursed loans as immediately due, and require Party A to immediately repay all loan principal and interest under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. For loans used by Party A not in accordance with the agreed purpose, Party B has the right to take measures such as requiring Party A to rectify, repay the loan in advance, or downgrade the loan risk classification to control the risk. For the loan amount used in violation, Party B shall charge a penalty interest from the date of violation (inclusive) at the loan interest rate agreed in this Agreement plus a markup (the markup ratio is detailed in the "Working Capital Loan Limit Use Agreement") calculated in the interest settlement method agreed in this Agreement, and charge compound interest on the interest that cannot be paid on time at the above penalty interest rate calculated in the interest settlement method agreed in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. For Party A's failure to repay the loan principal (including the loan principal accelerated to maturity) within the agreed period, for the overdue loan principal due but unpaid from the date of overdue (inclusive) at the loan interest rate agreed in this Agreement plus a markup (the markup ratio is detailed in the "Working Capital Loan Limit Use Agreement") (hereinafter referred to as the "overdue penalty interest rate") calculated in the interest settlement method agreed in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Regardless of whether the loan principal is due, for interest (including penalty interest, compound interest) due but unpaid, from the date of overdue (inclusive), compound interest shall be charged at the overdue penalty interest rate in the interest settlement method agreed in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Directly debit from accounts opened by Party A at Party B and other institutions of Haixia Bank of Fujian Co., Ltd. the loan principal, interest and other amounts due but unpaid by Party A, or freeze or stop payment of the aforementioned accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Require Party A to provide new guarantees for all debts under this Agreement that meet Party B's requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Exercise the security interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Rescind this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If Party B fails to provide loans as agreed, Party B shall bear the corresponding liability for breach of contract, except where the delay is caused by Party A.

**Chapter 6 Provisions for Bank Acceptance Bills Acceptance Limit Usage**

**Article 25**

This chapter applies to the situation where Party A applies to Party B to use the bank acceptance bills acceptance limit.

**Article 26 Use of Acceptance Limit**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each time Party A uses the bank acceptance bills acceptance limit under this Agreement to apply for acceptance, both parties shall sign the "Acceptance Limit Use Agreement" and "Acceptance List" after each application is reviewed and approved by Party B. The "Acceptance Limit Use Agreement" and "Acceptance List" are integral parts of this Agreement and shall take effect after being stamped with Party A's official seal and Party B's seal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each time Party A applies for bank acceptance of bills (hereinafter referred to as "bills"), Party A shall deposit a margin (or pledge deposit slip) in a proportion of the bill amount as a special pledge security for the bill upon maturity payment. The specific proportion of margin (or pledge deposit slip) shall be as specified in Article 49(3) of this Agreement.

**Article 27 Prerequisites for Acceptance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Party A's acceptance application meets Party B's requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The bills submitted by Party A comply with the provisions of the Negotiable Instruments Law of the People's Republic of China, the Payment and Settlement Measures, and other relevant laws, regulations, and rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The guarantee procedures meeting Party B's requirements have been duly handled and remain continuously valid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Party A has paid the acceptance service fee and acceptance commitment fee as agreed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Other prerequisites for acceptance: See Article 49(1) of this Agreement.

**Article 28 Acceptance Commitment Fee**

Party A shall pay Party B an acceptance commitment fee at a certain percentage of the difference between the bill amount applied for acceptance and the margin and/or pledge deposit slip already deposited (the specific fee rate is as agreed in Article 49(2) of this Agreement). The acceptance commitment fee shall be paid in full before acceptance.

**Article 29 Acceptance Handling Fee**

Party B shall charge Party A an acceptance handling fee of 0.5‰ of the face amount of each bill. The acceptance handling fee shall be paid in full before acceptance.

**Article 30 Acceptance Margin (or Pledge Deposit Slip)**

Before acceptance, Party A shall deposit the full margin amount as agreed in the "Acceptance List" into Party B's designated margin account, or provide a pledge deposit slip, as a special pledge security for Party A's performance of obligations under this Agreement. From the date of deposit, without Party B's written consent, Party A shall not use the funds under the margin or pledge deposit slip, and Party B may refuse any payment request from Party A.

**Article 31 Deposit of Bill Payments**

Party A shall deposit the full bill payment amount for each bill into Party A's account opened at Party B before the bill matures. Unless otherwise agreed by both parties.

**Article 32 External Payment**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) After the bills issued by Party A mature, Party B shall make payment to the holders in accordance with the Negotiable Instruments Law of the People's Republic of China, the Payment and Settlement Measures, and other relevant laws, regulations, and rules. Party B may directly debit from Party A's accounts opened at Party B and other institutions of Haixia Bank of Fujian Co., Ltd. (including margin accounts) or directly use the funds under pledge deposit slips for payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If Party A fails to deposit the full bill payment amount before the bill matures as agreed in this Agreement, and Party B is required to make advance payment, the advance payment made by Party B shall be the amount owed by Party A to Party B from the date of such advance payment. For such portion of the principal owed by Party A, Party B shall charge interest at 0.05% per day from the date of advance payment, and shall also charge compound interest at 0.05% per day.

**Article 33 Other Obligations of Party A**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Party A guarantees that it has a genuine commercial or labor service transaction relationship with the bill payee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Party A shall provide invoices or other documents complying with legal regulations sufficient to prove the genuine commercial or labor service transaction corresponding to such bills as required by Party B in a timely manner.

**Article 34 Liability for Breach of Contract**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any of the following circumstances shall constitute a breach of contract by Party A:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A fails to deposit bill payments as agreed in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A fails to perform any commitment made to Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party A fails to perform other obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Party A fails to perform any other due obligations to Party B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The guarantor fails to perform any obligation under the guarantee legal documents, or the guarantor (collateral) has circumstances that may affect Party B's realization of its security interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The guarantor fails to timely handle the extension or renewal procedures for the validity period of real estate title certificates and other certificates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Party A or the guarantor is involved in litigation, arbitration, property preservation, enforcement, administrative penalties, suspected criminal offenses, loss of credit, suspension of production, business closure, merger, demerger, suspension for rectification, revocation of business license, dissolution, filing for bankruptcy, major changes in equity or assets, major losses, or deterioration of financial conditions, etc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. The actual controllers, controlling shareholders, legal representatives, key officers, financial officers, or other senior management of Party A or the guarantor are involved in litigation, arbitration, subjected to judicial measures, held administratively liable, suspected of criminal offenses, loss of credit, loss of contact, restricted from high consumption, or restricted from entry and exit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. The collateral is damaged, destroyed, or decreases in value, is frozen, sealed, garnished, pledged, or subjected to full or partial enforcement, subject to third-party claims, transferred, leased, donated, replaced, or subjected to security interests, residential rights, easements, or other rights burden without Party B's written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Party A violates regulations by newly adding local government implicit debts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Other circumstances sufficient to affect Party B's realization of its creditor's rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Upon the occurrence of any of the circumstances described in paragraph (1) of this Article, Party B may exercise one or more of the following rights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Reduce or cancel the acceptance limit granted to Party A, and stop acceptance of bills not yet accepted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Directly debit from accounts opened by Party A at Party B and other institutions of Haixia Bank of Fujian Co., Ltd. the due principal and interest under this Agreement, or freeze or stop payment of the aforementioned accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Require Party A to supplement acceptance margin (or pledge deposit slip), or directly debit from Party A's accounts opened at Party B and other institutions of Haixia Bank of Fujian Co., Ltd. to transfer the corresponding amount to the account designated by Party B as acceptance margin, until the margin and/or pledge deposit slip amount for each bill under all "Acceptance Lists" equals the face amount of such bill.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Require Party A to provide new guarantees that meet Party B's requirements.

**Chapter 7 Miscellaneous**

**Article 35 Special Provisions on Green Finance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Environmental, Social and Governance Responsibilities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Regarding environmental, social and governance risks, Party A makes the following representations and warranties to Party B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) All actions related to environmental, social and governance risks comply with laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) There are no major litigation cases related to environmental, social and governance risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If Party A or the investment project involves major environmental, social and governance risks, Party A shall submit an environmental, social and governance risk report as required by Party B and ensure its content is true and valid;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Establish and improve emergency response mechanisms and measures for environmental, social and governance risk events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Cooperate with Party B or its approved third parties to evaluate and inspect Party A's environmental, social and governance risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Party A will urge its important associated parties to strengthen management to prevent the spread of their environmental, social and governance risks to Party A;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Perform other matters that Party B considers related to controlling environmental, social and governance risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. If any of the following circumstances exist, Party A shall constitute a default event in managing environmental, social and governance risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Party A fails to perform or fully perform its representations, warranties, and commitments under this Article;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Party A is penalized by relevant government departments or required by courts or arbitration institutions to pay compensation due to poor management of environmental, social and governance risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Other default events that Party B considers Party A to have in managing environmental, social and governance risks, including cross-default events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Special Provisions on Energy Conservation and Emission Reduction

For credit projects involving energy conservation and emission reduction, Party A makes the following commitments to Party B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A's construction projects comply with the "Six Mandatory Conditions" for starting construction (must comply with industrial policies and market access standards, project approval and filing procedures, land pre-examination, environmental impact assessment approval, energy efficiency evaluation and review, and credit, safety and urban planning regulations and requirements), and the project has obtained approval from relevant competent authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A's construction projects comply with the following substantive compliance requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) New projects comply with national industrial policies and development trends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Project environmental assessment is consistent with the overall requirements of planning environmental assessment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Technical and economic standards are in line with advanced domestic and international levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Other compliance requirements for construction projects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. If Party A's projects are identified by Party B as any of the following, Party B may require Party A and important third parties related to such projects (such as general contractors, suppliers, supervisors, etc.) to establish and implement environmental impact management systems and action plans, communication systems with local communities and the public, and monitoring, evaluation, and reporting (announcement) systems, while monitoring and evaluating the mechanisms, capabilities, and results of Party A and the aforementioned third parties' environmental risk control through independent third parties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Projects that seriously change the original environmental state and generate adverse environmental and social consequences that are difficult to eliminate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Projects that generate adverse environmental and social consequences that, although relatively easy to eliminate through mitigation measures, still have relatively large risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. If Party A is identified and published by energy conservation and emission reduction regulatory authorities as an enterprise with prominent energy and pollution issues that has failed to rectify, in addition to credit related to improving energy conservation and emission reduction, Party B may refuse to add new credit facilities, and has the right to gradually reduce and recover Party B's original credit facilities to Party A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. If Party A or Party A's construction projects are included in the list of outdated production capacity by national or provincial development and reform commissions or other relevant departments, Party B may take reasonable and effective measures to timely adjust, reduce, and recover credit facilities related to outdated production capacity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. If Party A's construction projects should obtain but have not obtained environmental assessment approval, Party B may refuse to pre-disburse funds for pre-construction preparation and construction. If the design, construction, operation and main project of environmental protection facilities are not simultaneous, Party B may temporarily suspend the disbursement of funds for the main project construction until the "three simultaneities" are realized. If the completion environmental assessment review should be obtained but has not been obtained after project completion, Party B may temporarily suspend the disbursement of funds for project operations. For construction projects of domestic enterprises invested abroad, Party A guarantees compliance with the environmental laws and regulations of the country or region where the project is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. If Party A encounters compliance and credit risks related to energy and pollution, Party B may choose to require Party A to take one or more of the following measures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Increase the capital ratio;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Issue medium and long-term corporate bonds (enterprise bonds);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Add technical renovation projects and investment plans for energy conservation and emission reduction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Pledge the operating rights, cash flow, accounts receivable, etc. of profitable projects after completion as credit collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Purchase construction period insurance for projects, and insurance related to energy and pollution risks such as project liability insurance, environmental liability insurance, and product liability insurance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Other methods that help Party B mitigate compliance and credit risks related to energy and pollution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. If Party A fails to perform the above commitments, or energy and pollution risks materialize, Party B may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Require Party A to rectify within a specified period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Suspend or compress Party A's credit facilities at Party B;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Declare the credit facility due in advance and recover the creditor's rights in advance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Exercise the mortgage and pledge rights in advance.

**Article 36 Confidentiality**

Either Party A or Party B, in the process of performing this Agreement or for the purpose of performing this Agreement, shall not alter or illegally use the commercial secrets and other information obtained from the other party, and shall not disclose such information to any third party without the other party's consent. However, this does not apply to lawyers, accountants, auditors, appraisers hired by both parties, or those required to be provided by laws, regulations, rules, and competent authorities.

**Article 37 Modification, Rescission of Contract, and Assignment of Creditor's Rights and Transfer of Debts**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) After this Agreement takes effect, unless otherwise agreed by this Agreement or both parties, neither party may unilaterally modify or rescind this Agreement. Any written agreement reached through modification and supplementation of this Agreement by both parties shall constitute an inseparable part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Party B may transfer all or part of the creditor's rights under this Agreement and the corresponding security interests to a third party. When Party B transfers the creditor's rights under this Agreement to a third party, Party B shall notify Party A. Party B may transfer all or part of the debts under this Agreement to a third party, but shall notify Party A and obtain Party A's consent. Within fifteen days after Party B sends the notice, if Party A does not express objection in writing, it shall be deemed that Party A has consented. If the assignment of creditor's rights or transfer of debts is invalid, void, revoked, or rescinded, Party A shall still be liable to Party B in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The transfer of all or part of the business under this Agreement between the branches of Haixia Bank of Fujian Co., Ltd. does not constitute an assignment of creditor's rights or transfer of debts, and does not require separate consent from Party A. The transferee branch has the right to claim the rights under this Agreement against Party A.

**Article 38 Reservation of Rights**

Party B's rights under this Agreement shall not affect or exclude any rights it has under applicable laws, regulations, and other contracts. Any tolerance, grace, or extension of any right under this Agreement for any breach or delayed action shall not be deemed as Party B's waiver of its rights or interest under this Agreement, nor shall it affect, prevent, or hinder Party B from continuing to exercise such rights or any other rights, nor shall it cause Party B to bear obligations and liabilities to Party A.

**Article 39 Applicable Law and Dispute Resolution**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) This Agreement is governed by the laws of the People's Republic of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The method of dispute resolution shall be as specified in Article 50 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) During the dispute resolution period, if the dispute does not affect the performance of other provisions of this Agreement, such other provisions shall continue to be performed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Both parties agree that civil litigation or arbitration arising from this Agreement may be conducted online through an information network platform.

**Article 40 Notice and Service**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Notice

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Both parties may notify each other in writing (including but not limited to faxes, letters and other written documents) in accordance with the address or legal document service address, legal representative (or person in charge), authorized agent, and handling personnel recorded in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party B may also notify Party A through announcements and notices published in newspapers, websites, electronic banking, and business outlets, or through telephone, mobile phone, text message, WeChat, QQ, DingTalk, email and other single or multiple methods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Service

Party A confirms that during first instance, second instance, enforcement, application for retrial, arbitration and other dispute resolution procedures, as well as special procedures, realization of security interest procedures, payment order application procedures, compulsory enforcement notarization procedures, the legal document service address, mobile phone number, fax number, and email address recorded in this Agreement shall serve as the addresses for receiving legal documents (including but not limited to petitions, arbitration applications, statements of appeal, defense statements, evidence notification letters, telegrams, rulings, judgments, arbitration awards, mediation letters, enforcement notices, appraisal letters and litigation, arbitration, special procedures, realization of security interest procedures, payment order application procedures, and other legal documents in compulsory enforcement notarization procedures). People's courts, arbitration institutions, and notary authorities may serve legal documents on Party A through direct service, retention service, entrusted service, postal service, announcement service, electronic service (including but not limited to email, text message, fax, etc.), and other single or multiple service methods recognized by any people's court, arbitration institution, or notary authority, including instant messaging tools. For electronic service, the date on which the service information reaches Party A's specific system shall be the service date. Party A confirms that this service method has legal effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Change of Contact Information

If the address, legal document service address, telephone, mobile phone, fax, email, legal representative (or person in charge), authorized agent, handling personnel, and contact person recorded in this Agreement change during the performance of this Agreement, the changing party shall notify the other party in a timely manner. Otherwise, the original contact method shall be used for notification or service. Regardless of whether the other party actually receives it, it shall be deemed as having been notified or served to the other party. If the notification is returned, the date of return shall be the date of notification or service.

**Article 41 Declaration Clause**

Party A is a legal person or non-legal person organization legally established and existing, has the right to sign and perform this Agreement in its own name, and has sufficient, legal and valid authorization to sign this Agreement.

**Article 42 Matters Not Covered**

Matters not covered by this Agreement shall be resolved by Party A and Party B through negotiation in accordance with relevant laws, regulations, and rules.

**Article 43 Effectiveness of Contract**

This Agreement shall take effect upon satisfaction of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The legal representative (or person in charge) or authorized agent of Party A signs and affixes the official seal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The legal representative (or person in charge) or authorized agent of Party B signs and affixes Party B's seal.

**PART TWO — SPECIAL TERMS AND CONDITIONS**

**Article 44 Contracting Parties**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Credit Recipient (Party A): Fujian Shengfeng Logistics Co., Ltd.

Address: XXX

Postal Code: XXX

Legal Document Service Address: Same as above

Telephone/Mobile: XXX

Fax: XXX

Email: XXX

Legal Representative (or Person in Charge): XXX

Handling Person: XXX

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Credit Grantor (Party B): Haixia Bank of Fujian Co., Ltd., Fuzhou Jin'an Branch

Address: XXX

Postal Code: XXX

Telephone: XXX

Fax: XXX

Email: XXX

Legal Representative (or Person in Charge) or Authorized Agent: XXX

Handling Person: XXX

**Article 45 Type and Amount of Credit Facility**

Party B agrees to provide Party A with the following credit facility: Loan limit of RMB XXX (amount redacted).

**Article 46 Credit Period**

The credit period under this Agreement is from September 26, 2025 to September 26, 2026. Party A shall submit an application for use of the credit limit under this Agreement during the credit period, and Party A shall submit its first application for use of the credit limit within 180 days from XXX. Specific business transactions arising between Party A and Party B in accordance with this Agreement shall be performed in accordance with the relevant specific business contracts, and shall not be affected by the expiry of the credit period.

**Article 47 Other Preconditions for Use of Credit Limit (as specified in Article 8 of this Agreement)**

None (this field is blank).

**Article 48 Provisions for Working Capital Loans**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The "other prerequisites for loan disbursement" referred to in Article 21(1)(3) of this Agreement include: None (this field is blank).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The following circumstances shall constitute a breach of contract by Party A regarding financial indicators:

None (this field is blank).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If any principal or interest of Party A becomes overdue or any other breach of contract occurs, the provision of this Agreement on extending the due date to the next working day when the due date falls on a holiday or rest day shall not apply.

**Article 49 Provisions for Bank Acceptance Bills Acceptance Limit Usage**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The "other prerequisites for acceptance" referred to in Article 27(5) of this Agreement include: None (this field is blank).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The acceptance commitment fee rate agreed in Article 28 of this Agreement is: None (this field is blank) per ten-thousandth of the difference between the bill amount and the margin and/or pledge deposit slip already deposited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Each time Party A applies to Party B for acceptance, Party A shall deposit a margin and/or pledge deposit slip of not less than None (this field is blank)% of the face amount of the bill.

**Article 50 Dispute Resolution Method**

All disputes arising from or related to the conclusion and performance of this Agreement shall be resolved by the following first method:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) File a lawsuit with the people's court with jurisdiction over Party B's domicile;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Apply for arbitration at [blank] in accordance with the arbitration rules of the effective arbitration institution at the time of submission of the arbitration application using simplified procedures. The arbitration award shall be final and binding on all parties.

**Article 51 Contract Originals**

This Agreement is made in two (2) originals, with Party A holding one (1) copy and Party B holding one (1) copy, each having equal legal effect.

**Article 52 Special Provisions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Party A agrees to the following provisions in this field:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. From the date of signing this Agreement until all debts of Party A under this Agreement are paid off, without Party B's written consent, Party A shall not add new external financing security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A shall choose Party B as its settlement cooperative bank and conduct daily business settlements at Party B. Party A shall increase the settlement amount at Party B's accounts in proportion to the credit ratio (i.e., the proportion of Party A's credit amount at Party B to its total credit amount at all banks). Party A (including Party A's legal representative and its spouse, and financial personnel, etc.) shall have an annual credit-side business flow in accounts opened at Party B of not less than [blank]% of Party A's annual main business revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Credit funds shall not be used for local government implicit debts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. From the date of signing this Agreement until all debts of Party A under this Agreement are paid off, Party A shall not change the nature of state-controlled enterprises. Otherwise, it shall be deemed that Party A is in breach of contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. From the date of signing this Agreement until all debts of Party A under this Agreement are paid off, if Party A's high-tech enterprise qualification is lost (including but not limited to being revoked or expired and not renewed, etc.), undisbursed loans shall be stopped. For disbursed loans, Party B has the right to declare early maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. If the business under this Agreement is a technology lending business, it shall be included in the scope of the government risk compensation fund under the "Technology Lending" policy risk compensation signed by Party B with the Fujian Provincial Department of Science and Technology and the Fujian Local Financial Supervision and Administration Bureau. Party A should note that the government risk compensation is not a substitute for repayment, and the government risk compensation will not reduce the debt between Party A and Party B, nor will it cause Party A to add new external debts. If any business under this Agreement cannot be included in the government risk compensation scope for the following reasons, Party B has the right to temporarily suspend the disbursement of remaining loan amounts under the Agreement and recover already disbursed loans in advance:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Due to Party A's own operational reasons, Party A is removed from the government risk compensation target enterprise pool and cannot continue to enjoy the policy of shared risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The total credit amount that Party A has applied for at other banks and that has been filed and enjoys government risk compensation preferential treatment reaches the cap amount of RMB XXX (amount redacted) for a single enterprise's filing under the "Technology Lending" government risk compensation policy, and this credit under Party B cannot be included in the government risk compensation scope;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For other reasons, this credit business under Party B cannot be included in the government risk compensation scope.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If it is an operating property loan, Party A agrees to the following provisions in this field:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A shall open a settlement account at Party B as the sole rental settlement account for the operating property (referring to the operating property mortgaged by Party A to Party B for securing the performance of obligations under this Agreement) under this Agreement. From the date of signing this Agreement until all debts of Party A under this Agreement are paid off, all operating property rent shall be paid to this account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party A shall not directly or indirectly use the loan funds to purchase or build other real estate projects, including payment of project capital, land transfer fees, engineering costs, etc. Party A shall not directly or indirectly misappropriate loan funds for Party A's affiliated enterprises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. From the date of signing this Agreement until all debts of Party A under this Agreement are paid off, the rental rate of operating property under this Agreement (referring to the ratio of the total construction area of operating property rented out to the total construction area of operating property) shall not be less than [blank]%, and the rent coverage rate (referring to the ratio of annual rent income to the loan principal and interest payable for each year) must reach [blank]% or above.

**Article 53 Other Agreed Matters**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) On September 26, 2024, Party A and Party B signed the Credit Facility Agreement No. XXX (hereinafter referred to as the "Original Credit Facility Agreement"). Under the Original Credit Facility Agreement, the following specific businesses remain outstanding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Loans under the Working Capital Loan Limit Use Agreement No. XXX: RMB XXX (amount redacted).

The total outstanding loan principal under the above Item 1 Working Capital Loan Limit Use Agreement is RMB XXX (amount redacted), which occupies the loan limit of RMB XXX (amount redacted) under this credit facility agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The outstanding loans under paragraph (1) of this Article shall not be applied for use by Party A before they are paid off. After they are paid off, the released corresponding limits may be applied for use by Party A in accordance with the provisions of this credit facility agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The credit limit under this Agreement may be used in whole or in part to repay old loans owed by Party A or third parties to Party B or third-party old loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Where the provisions of this Article are inconsistent with other provisions of this Agreement, the provisions of this Article shall prevail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Party A shall choose Party B as its settlement cooperative bank and conduct daily business settlements at Party B. The settlement amount shall be increased in proportion to the credit ratio (i.e., the proportion of Party A's credit amount at Party B to its total credit amount at all banks).

**Confirmation by Both Parties upon Signing**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Both parties have read and fully agreed to all terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on Party B's instructions, Party A has carefully read the terms and conditions regarding Party B's collection, retention, use of Party A's financial information or credit status, and disclosure for realization of creditor's rights, and has no objections. Party A accepts all consequences that may arise therefrom.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party B has made full disclosure to Party A regarding terms and conditions that exempt or reduce Party B's liability, exclude or restrict Party A's rights, and other terms materially affecting Party A's interests, and has provided detailed explanations as requested by Party A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Both parties fully understand and comprehend the meaning of the terms and conditions of this Agreement and the corresponding legal consequences.

---

| | |
|:---|:---|
| Party A (signature and/or handprint or official seal): | Party B (official seal): |
| Legal Representative (or Person in Charge) (signature): | Legal Representative (or Person in Charge) (signature): |
| Or Authorized Agent (signature): | XXX Or Authorized Agent (signature): XXX |
| Handling Person (signature): | Handling Person (signature): XXX |

---

Date of Signing: XXX Year XXX Month XXX Day

Place of Signing: XXX

Contract Number: XXX

## Exhibit 4.20

**Exhibit 4.20**

June 2024 Edition

**WORKING CAPITAL LOAN CONTRACT**

Contract No.: XXXXXXXX

Lender: Industrial Bank Co., Ltd. Fuzhou Branch

Address: XXXXXXXXXXXXXXXXXXXXXX

Legal Representative / Person in Charge: XXX

Borrower: Shengfeng Logistics Group Co., Ltd.

Address: XXXXXXXXXXXXXXXXXXXXXX

Legal Representative / Person in Charge: XXX

Place of Contract Signing: Fuzhou City, Gulou District/County

**Important Notice Before Signing**

To protect your interests, please read carefully, review, and confirm the following matters before signing this contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. You and your company have the right to sign this contract. If the consent of other persons is required by law, you and your company have already obtained sufficient authorization; if the personal information of other persons is involved, you and your company have already obtained the written documents from those persons consenting to Industrial Bank's processing of their personal information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. You and your company have carefully read and fully understood the contract terms, and have paid particular attention to the content regarding liability assumption, exemption or limitation of Industrial Bank's liability, personal information processing, and other matters of significant interest to you and your company, as well as the content in bold font;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. You and your company have fully understood the meaning of the contract terms and the corresponding legal consequences, and are willing to accept these contractual terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. You and your company have specifically noted the clauses requiring you and your company to use credit funds for the purposes agreed in the contract, the clauses prohibiting the diversion of credit funds (including but not limited to purchasing or investing in real estate), and the requirements to provide a letter of commitment on the use of credit funds to Industrial Bank. You and your company are fully aware and understand that Industrial Bank will take measures such as early collection, stopping disbursement of undisbursed loans/financing under this contract, stopping payment of unpaid loans/financing under this contract, reducing or suspending credit limits, and downgrading loan risk classifications for conduct involving diversion of credit funds, and will pursue your and your company's legal liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. You and related individuals, by signing this contract, consent to and authorize Industrial Bank to process your and related individuals' personal information and retain it for the period required by Industrial Bank's regulations; you and related individuals are aware of the rights to be informed, to decide, to withdraw consent, to restrict or refuse third-party processing of personal information; Industrial Bank has provided personal information processing notification and decision services through diversified means (including but not limited to on-site notification); if you and related individuals withdraw, restrict or refuse Industrial Bank's authorization to process personal information, you may handle this in accordance with the contractual agreements or Industrial Bank's management procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The contract text provided by Industrial Bank is a template text. Blank lines are reserved after each contract clause, and a 'Supplementary Clause' section has been added at the end of the contract for the parties to make modifications, additions or deletions to the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. If you and your company have any questions about this contract, or if you and your company discover any illegal or non-compliant fee matters related to this contract or businesses under this contract, please call Industrial Bank's phone number or directly complain to or consult Industrial Bank's operating outlets. Contact number: 95561.

Upon the borrower's application, the lender has approved the granting of a working capital loan to the borrower. In order to clarify the rights and obligations of both parties and abide by credit principles, the two parties have entered into this contract in accordance with relevant laws and regulations of the People's Republic of China through equal negotiation for joint compliance.

The lender and borrower confirm that the loan under this contract belongs to the following situation No. 1:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) This contract is a sub-contract of the Credit Facility Agreement with contract number XXXXXXXX signed between the lender and the borrower on XXX XX, 20XX (hereinafter referred to as the 'Master Agreement'). The loan amount under this contract shall be included in the credit limit under the Credit Facility Agreement. Foreign currency loan amounts shall be converted to RMB at the middle exchange rate published by the lender on the date of this contract's signing for inclusion in the credit limit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) This contract is an independent legal document signed between the lender and the borrower.

**Article 1 Definitions and Interpretations**

Unless otherwise agreed in writing by both contracting parties, the following terms in this contract shall be defined and interpreted as follows:

1. 'Working capital loan' refers to a local or foreign currency loan applied by the borrower to the lender for the borrower's daily business working capital.

2. 'Creditor rights' or 'principal creditor rights' refers to the creditor rights formed by the financing provided by the lender to the borrower pursuant to this contract after the borrower applies and the lender approves (including principal, interest, penalty interest, compound interest, liquidated damages, damages, and costs of the creditor in realizing its creditor rights). The creditor rights held by the lender against the borrower under this contract correspond to the debt owed by the borrower to the lender under this contract.

'Costs of the creditor in realizing creditor rights' refers to litigation (arbitration) fees, attorney fees, travel expenses, execution fees, insurance fees and other costs paid by the lender in realizing creditor rights through litigation, arbitration, applying to notary institutions for execution certificates, and other means.

3. The following terms in Article 5 of this contract are defined and interpreted as follows:

'Fixed interest rate' refers to an interest rate that remains unchanged during the loan period. If disbursed in multiple tranches, it refers to the interest rate from the actual disbursement date of each tranche to the loan maturity date under this contract remaining unchanged.

'Floating interest rate' refers to an interest rate that changes periodically and in magnitude as agreed by both contracting parties during the loan period.

'Floating period' refers to the frequency of change of the loan interest rate as agreed by both contracting parties. Within one floating period, the loan interest rate is determined based on the pricing benchmark rate at the beginning of the floating period according to the pricing method agreed in the contract, and remains unchanged during that floating period; when one floating period expires and enters the next floating period, the loan interest rate is determined based on the pricing benchmark rate at the beginning of the new floating period according to the pricing method agreed in the contract, and remains unchanged during that floating period.

'Pricing benchmark rate' refers to the interest rate standard used to determine the loan interest rate under this contract, including but not limited to quoted rates publicly released by China or relevant countries/regions/markets, such as LPR, SHIBOR, SOFR, SOFR term rate, €STR, SONIA, TSRR, TONA, SARON, HIBOR, SIBOR, and the People's Bank of China benchmark deposit rate.

'LPR' refers to the loan market quoted rate calculated and published by the National Interbank Funding Center authorized by the People's Bank of China. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-1 day LPR, where 'T' is the date on which the loan interest rate is determined, and 'T-1' is the previous business day before T.

'SHIBOR' refers to the Shanghai Interbank Offered Rate published by the National Interbank Funding Center and applicable on the same day.

'SOFR' refers to the Secured Overnight Financing Rate, in USD. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-5 day SOFR, where 'T' is the date on which the loan interest rate is determined, and 'T-5' is five business days before T.

'SOFR term rate' refers to the CME Group Term SOFR Reference Rate, in USD. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-2 day SOFR term rate, where 'T' is the date on which the loan interest rate is determined, and 'T-2' is two business days before T.

'€STR' refers to the Euro Short-Term Rate, in EUR. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-5 day €STR, where 'T' is the date on which the loan interest rate is determined, and 'T-5' is five business days before T.

'SONIA' refers to the Sterling Overnight Index Average, in GBP. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-5 day SONIA.

'TSRR' refers to the term rate of the Sterling Overnight Index Average, in GBP. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-2 day TSRR term rate.

'TONA' refers to the Tokyo Overnight Average Rate, in JPY. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-5 day TONA.

'SARON' refers to the Swiss Average Rate Overnight, in CHF. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-5 day SARON.

'HIBOR' refers to the Hong Kong Interbank Offered Rate for HKD. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-2 day HIBOR.

'SIBOR' refers to the Singapore Interbank Offered Rate, applicable only to SGD. In accordance with banking industry practice, both parties agree to set the pricing benchmark rate rule under this contract as T-2 day SIBOR.

'People's Bank of China benchmark deposit rate' refers to the RMB deposit benchmark rate published by the People's Bank of China and applicable on the same day.

The currency and specific values of 'LPR', 'SHIBOR', 'SOFR', 'SOFR term rate', '€STR', 'SONIA', 'TSRR', 'TONA', 'SARON', 'HIBOR', 'SIBOR', and 'People's Bank of China benchmark deposit rate' applicable under this contract shall be based on the query results of Industrial Bank's core system. The loan interest rate determination date may be the actual disbursement date, the contract signing date, or the repricing date.

'Loan interest rate' refers to the contract execution rate formed by adding or subtracting basis points to the pricing benchmark rate on the loan interest rate determination date, as agreed by both contracting parties following the loan interest rate pricing formula under this contract.

4. 'Major transactions' stipulated in Article 13 of this contract refers to (including but not limited to): any transaction that is determined or potentially likely to significantly affect the borrower's company's basic structure, shareholder changes, liabilities, cash flows, profitability, core business secrets, core competitiveness, major assets, major debt obligations, ability to repay debts, or ability to perform this contract, or other transactions that the lender and/or borrower deem to constitute major transactions.

5. 'Major events' stipulated in Article 13 of this contract refers to (including but not limited to): any event that is determined or potentially likely to significantly affect the ability of senior management of the borrower's company to perform their duties, the hiring and dismissal of core business employees, core business secrets, core competitiveness, basic structure, shareholder changes, liabilities, company existence, business legality, company stability, company development, profitability, debt repayment ability, and ability to perform this contract, as well as other events that the lender and/or borrower deem to constitute major events.

6. 'Business day' in this contract refers to working days in China (excluding Hong Kong, Macao and Taiwan) other than statutory holidays and weekends. 'Banking business day' in this contract refers to the banking business days of the lender's bank. During contract performance, if a drawdown or repayment date falls on a non-banking business day, it shall be postponed to the next banking business day.

**Article 2 Loan Amount**

The lender agrees to lend the borrower (currency) RMB (amount in words) Zero billion, Four hundred million, Zero hundred million, Zero ten million, Zero million, Zero hundred thousand, Zero ten thousand, Zero thousand, Zero hundred, Zero ten, Zero Yuan only. [RMB XXX,XXX,XXX.XX]

**Article 3 Loan Purpose**

This loan is used for XXXXXXXXXXXXXXXXXXXXXX. Without the lender's written consent, the borrower shall not divert the loan for other purposes.

**Article 4 Loan Term**

1. The loan term is one year, from XXX XX, 20XX to XXX XX, 20XX.

2. For one-time disbursement, the disbursement date is the actual disbursement date recorded on the loan note or loan voucher. If the actual disbursement date is later than the disbursement date recorded on the previous note, the loan maturity date shall be postponed accordingly.

3. The loan installment drawdown plan is as follows: [to be filled in as applicable]

The borrower shall apply to the lender for drawdown procedures three business days before each drawdown date, or at other times required in writing by the lender.

If the borrower fails to draw down the loan within the installment drawdown term and amount agreed above, the lender has the right to require the borrower to pay a liquidated damages of __/__ ten-thousandths of the loan amount that should have been drawn down in the current period. Borrowers that are small and micro enterprises meeting national institutional and policy requirements are exempt from this liquidated damages.

4. Under the prerequisite conditions for drawdown agreed in Article 6 of this contract, the lender shall pay the loan funds pursuant to Article 7 of this contract.

5. The lender has the right to appropriately adjust the installment drawdown plan based on factors such as whether the financing project meets the prerequisite conditions for drawdown, loan fund payment conditions, and the time for signing and completing the formalities of the corresponding security contract under this contract as required by law, regulations, policies, and this contract, and other factors the lender deems necessary.

6. For installment drawdowns, the disbursement date for each tranche is the actual disbursement date recorded on the loan note or loan voucher. Each separately disbursed loan shall have the same maturity date, i.e., the loan maturity date determined by the loan note or loan voucher for the first disbursement.

7. If the lender calls back the loan early pursuant to the circumstances agreed in this contract, the loan maturity date shall be deemed to have been advanced accordingly.

**Article 5 Loan Interest Rate and Interest Accrual**

1. Loan interest rate (annualized rate calculated using the simple interest method, same below)

(1) The pricing benchmark rate shall be executed according to the following type No. 1:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) LPR for the 1-year term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) SHIBOR ____ term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) SOFR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) SOFR term rate ____ term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) €STR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) SONIA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) TSRR ____ term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) TONA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) SARON.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) HIBOR ____ term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) SIBOR ____ term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) People's Bank of China benchmark deposit rate ____ term.

Among these, RMB fixed rate loans shall choose LPR as the pricing benchmark rate. The pricing benchmark rate shall be used within the currency scope limited by the pricing benchmark rate defined in Article 1 'Definitions and Interpretations'.

(2) Loan interest rate pricing formula: Loan interest rate = Pricing benchmark rate + 0% or - 1%.

(3) The loan interest rate shall be executed according to the following type No. 1:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Fixed interest rate. The interest rate is determined in the following manner No. A:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The loan interest rate is determined based on the pricing benchmark rate and pricing formula on the actual disbursement date of each tranche. The interest rate remains unchanged from the actual disbursement date of each tranche to the loan maturity date under this contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The loan interest rate is agreed as an annual rate of ___% based on the pricing benchmark rate and pricing formula on the contract signing date. If the pricing benchmark rate is adjusted on the actual disbursement date, the added/subtracted basis points in the pricing formula shall be adjusted accordingly, and the annual rate agreed in this contract remains unchanged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Floating interest rate. The loan interest rate is determined based on the pricing benchmark rate and pricing formula on the actual disbursement date and repricing date, with interest calculated in segments. The repricing date is executed according to the following type ___:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The floating period is ____ (month/quarter/half year/year). The corresponding date of each full period from the actual disbursement date of the loan shall be the repricing date for this contract. If there is no corresponding date in that month, the last day of that month shall be used.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. For loans using SOFR, €STR, SONIA, TONA, or SARON as the pricing benchmark rate, each interest accrual date during the interest period (i.e., each calendar day during the loan period) shall be the repricing date for this contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Other interest rate methods: _______________________________.

(4) The pricing benchmark rate corresponding to the loans disbursed under this contract shall use the actual disbursement date (or repricing date, if any) of each loan as the pricing benchmark rate determination date. During the loan period, unless otherwise agreed in the contract, the borrower shall not be notified again if the loan interest rate is adjusted as agreed in the contract.

(5) For loans disbursed under this contract, if China or the relevant country/region cancels the pricing benchmark rate applicable under this contract, or the market no longer publishes the pricing benchmark rate, or the regulatory authority requires it, the lender has the right to re-determine the loan interest rate based on the interest rate policies of China or the relevant country/region at the same time, in accordance with the principle of fairness and good faith, and with reference to industry practices and interest rate conditions, and then notify the borrower. If the borrower has objections, it shall negotiate with the lender. If negotiations fail within five business days of the lender issuing the notice, the lender has the right to call back the loan early, and the borrower shall immediately repay the remaining loan principal and interest. If the lender or the state/regulatory authority requires the borrower to sign a supplementary agreement on related matters, the borrower shall cooperate.

2. Loan interest repayment method

(1) Calculation of loan interest. Interest on principal and foreign currency loans begins to accrue from the date the lender credits the borrower's account as scheduled pursuant to this contract. Daily interest = Outstanding loan balance on that day × Daily interest rate. Conversion between daily interest rate and annual interest rate shall be executed in accordance with People's Bank of China regulations and international practice.

(2) The loan interest repayment method shall be executed according to the following type No. 1:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The interest payment date under this contract is agreed to be the 21st of every ____ month (monthly/quarterly/semi-annually/annually/at maturity). The borrower shall pay the current loan interest to the lender on the interest payment date, and shall settle the remaining principal and interest upon loan maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) From the actual disbursement date of the loan, the corresponding date of each ____ period (monthly/quarterly/semi-annually/annually) shall be the interest payment date for each period (if there is no corresponding date in that month, the last day of that month shall be used as the corresponding date). The borrower shall pay the current loan interest to the lender on the interest payment date, and shall settle the remaining principal and interest upon loan maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The first interest payment date is XXX XX, 20XX. From the first interest payment date, the corresponding date of each ____ period (monthly/quarterly/semi-annually/annually) shall be the interest payment date for each period. The borrower shall pay the current loan interest to the lender on the interest payment date, and shall settle the remaining principal and interest upon loan maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Other repayment methods: _______________________________.

3. Penalty interest and compound interest

(1) If the borrower fails to use the loan for the agreed purpose in accordance with this contract, from the date of diversion, the lender has the right to charge penalty interest on the diverted loan at a penalty interest rate of 100% above the loan interest rate; if the borrower fails to repay on time without reaching an extension agreement with the lender, i.e., the loan is overdue, from the date of overdue, the lender has the right to charge penalty interest on the overdue loan at a penalty interest rate of 50% above the loan interest rate; for interest not paid on time (including interest before and after loan maturity, penalty interest for diversion, and overdue penalty interest), the lender has the right to charge compound interest at the overdue penalty interest rate agreed in this contract. For a single loan that is both overdue and misappropriated, the penalty interest rate shall be calculated at the higher rate.

(2) If the loan interest rate uses a fixed interest rate, the penalty interest rate is also a fixed interest rate; if the loan interest rate uses a floating interest rate, the penalty interest rate is also a floating interest rate, with the same floating period as the loan interest rate floating period.

(3) The accrual method for penalty interest and compound interest shall be executed in accordance with the loan interest repayment method agreed in this contract.

**Article 6 Conditions Precedent to Drawdown**

1. The borrower may apply to the lender for disbursement of the loan under this contract only after satisfying the following conditions precedent to drawdown required by the lender:

(1) The borrower has delivered the following documents to the lender, and the circumstances stated in the documents have not changed and remain valid, or the borrower has provided explanations and clarifications satisfactory to the lender regarding the changes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Loan application, the main content of which includes but is not limited to: loan project name, amount, purpose, term, repayment plan, and repayment sources;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The borrower's valid business license, articles of association, credit card and password/credit code, list of legal representatives and board members and key management personnel registered with the industry and commerce administration authority, list of financial officers and signature samples, valid identity document of the legal representative or authorized representative, written documents from the legal representative or authorized representative and relevant natural persons consenting to the lender's collection and processing of their personal information, and other company documents the lender deems necessary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Board of directors or shareholders' meeting resolutions that are true, legal, and valid, convened by the borrower in accordance with legal procedures and passed by the legally required number of directors or shareholders, agreeing to apply to the lender for the loan under this contract and clearly stating the loan purpose and accepting all loan terms required by the lender, or other documents the lender deems necessary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Annual reports for the past three years recognized by the lender (with audit reports and notes), and the most recent and prior year's financial statements; for borrowers established for less than three years, annual reports since establishment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Information on related parties and related-party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. For applications for temporary working capital loans, relevant contracts, vouchers or materials such as purchase contracts, order contracts, and debt certificates shall be provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. For planned mortgage/pledge security arrangements, ownership certificates for the mortgaged/pledged property, appraisal reports, and mortgage/pledge registration procedures required by relevant laws and regulations shall have been properly completed, with relevant ownership certificates and registration certificates having been delivered to the lender as required; for third-party guarantees, relevant security materials shall be provided as required in items 2 to 4 above, and the guarantee contract shall have taken effect; the above security shall remain continuously valid;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. If the lender requires insurance on the mortgaged/pledged property, the insurance procedures with the lender as the first beneficiary shall have been completed and the original insurance policy delivered to the lender; such insurance shall remain continuously valid; if the borrower provides mortgage/pledge, the borrower hereby assigns to the lender the insurance claim rights that would arise due to insurance events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Special industry enterprises shall provide production and business licenses or enterprise qualification certificates for special industries issued by authorized departments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. If either party to this contract requires notarization and other procedures, the relevant notarization procedures have been completed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. The borrower has opened an account at the lender as required and voluntarily accepts the lender's credit monitoring and payment and settlement supervision;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. For applications for foreign currency project loans, valid certificates for foreign currency loan use and approvals from relevant authorities shall be provided, and the requirements of relevant foreign exchange control policies shall be met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. The lender requires the provision of value-added tax, business tax and income tax declaration forms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. The borrower has issued a letter of commitment on the use of credit funds as required by the lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. The borrower and related natural persons have issued written documents as required by the lender consenting to the lender's processing of their personal information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. Other documents, reports, vouchers and materials required by the lender.

(2) The borrower is legally established, operates legally and in compliance, has sustainable business capacity, and has legitimate repayment sources;

(3) The loan purpose is clear, legal, and in compliance;

(4) The borrower's declarations and undertakings in Article 11 of this contract remain continuously true and valid; no default events or potential default events have occurred on or before the application for disbursement date;

(5) The borrower has filled in the loan note or loan voucher for the drawdown. The loan note or loan voucher is an integral part of this contract and has the same legal effect as this contract. Where the loan amount, loan term, loan interest rate, etc. in this contract are inconsistent with the records in the loan note or loan voucher, the records in the loan note or loan voucher shall prevail;

(6) The borrower has good credit standing with no major adverse records; for newly established legal entities, their controlling shareholders shall have good credit standing (the borrower shall provide written documents from natural person controlling shareholders consenting to the lender's collection and processing of their personal information) with no major adverse records;

(7) Other conditions precedent to drawdown required by the lender.

2. The lender's performance of its obligations under this contract is premised on the conditions precedent to drawdown stipulated in this article being satisfied. The lender has the right to unilaterally decide to reduce or waive certain conditions precedent to drawdown, and the borrower or guarantor may not use such conditions as grounds to resist the lender.

3. The lender has the right to appropriately adjust loan disbursement based on factors such as whether the financing project meets the conditions precedent to drawdown required by laws, regulations, and policies and by the lender, the signing and completion of the corresponding security contract under this contract, and other factors.

4. The borrower hereby agrees: after this contract is signed, if any drawdown by the borrower fails to meet the conditions precedent to drawdown or loan fund payment conditions agreed in this contract, the lender has the right to stop disbursement, stop paying the loan funds or terminate this contract. The responsibilities or losses arising therefrom shall be borne by the borrower. The lender shall notify the borrower of contract termination, and the borrower's objection period is five business days, calculated from the date the termination notice is delivered to the borrower in the manner agreed in this contract. If the borrower does not raise objections, the contract shall automatically terminate upon expiry of the objection period. If the borrower raises objections but the parties fail to reach agreement through negotiation within five business days after the objection period expires, the lender has the right to call back the loan early as agreed in this contract.

5. After the lender's review, if the borrower satisfies the conditions precedent to drawdown agreed in this contract, the lender shall pay the loan funds pursuant to Article 7 of this contract.

**Article 7 Account Monitoring and Loan Fund Payment**

1. Account Monitoring

In accordance with national laws, regulations, and regulatory system requirements, the borrower undertakes that it has met the conditions precedent to drawdown agreed in the contract before applying for loan disbursement, and accepts the lender's supervision of loan fund usage in accordance with the agreed purpose. The lender has the right to monitor the borrower's basic deposit accounts, general deposit accounts, and special deposit accounts, and to supervise and control the disbursement, payment, and repayment of loan funds in the manner agreed in the contract.

The borrower designates the following account as the dedicated fund collection account, and shall timely provide information on fund inflows and outflows of the account:

Account name: Shengfeng Logistics Group Co., Ltd. Account No.: XXXXXXXXXXXXXXXX

Bank: Industrial Bank Co., Ltd. Fuzhou Gongye Road Branch

The lender may, based on the borrower's credit status and financing conditions, negotiate with the borrower to separately sign an account management agreement, clearly specifying the management of fund inflows and outflows for the designated account. The lender has the right to call back the loan early based on the borrower's fund collection situation.

2. Loan Fund Payment

(1) The lender has the right to manage and control the payment of loan funds through the method of lender-entrusted payment or borrower-independent payment.

1. 'Lender-entrusted payment' refers to the lender paying the loan funds to the borrower's transaction counterparties that comply with the agreed purpose of this contract through the borrower's account promptly pursuant to the borrower's drawdown application and payment entrustment.

For lender-entrusted payment, before loan funds are disbursed, the borrower shall provide transaction materials related to the agreed purpose of this contract. After the lender's review and approval, the loan funds shall be paid to the borrower's transaction counterparties through the borrower's account promptly.

For lender-entrusted payment, after loan funds are paid to the borrower's transaction counterparties, if the loan funds are returned due to the underlying transaction contract being cancelled, dissolved, invalid, or other reasons, the lender has the right to call back the returned loan funds early pursuant to Article 12 of this contract.

2. 'Borrower-independent payment' refers to the lender disbursing the loan funds to the borrower's account pursuant to the borrower's drawdown application, and then the borrower independently paying to the borrower's transaction counterparties that comply with the agreed purpose of this contract.

For borrower-independent payment, the borrower shall regularly report to the lender on the loan fund payment status. The lender has the right to verify whether the loan payments comply with the agreed purpose and whether there is circumvention of entrusted payment through methods such as account analysis, voucher verification, and field investigation.

(2) Entrusted payment

Loan fund payments with any of the following circumstances shall adopt the lender-entrusted payment method:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The borrower and lender are establishing a new credit business relationship and the borrower's internal rating at the lender is at or below Grade B. 'Establishing a new credit business relationship' refers to establishing a credit business relationship with the lender for the first time or having no credit business relationship within 2 years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. For working capital loans used for replacement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The payment counterparty is clear and the single payment to a borrower transaction counterparty exceeds RMB 10 million (for foreign currency loans, calculated at the middle exchange rate published by the lender on the payment date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Others: _______________________________.

For entrusted payment, the lender shall in principle pay the loan funds to the borrower's transaction counterparties through the borrower's account within five business days of loan disbursement. If the entrusted payment cannot be completed due to the borrower's reasons, after consultation with the borrower, the lender shall complete the external payment within a maximum of ten business days. If the entrusted payment cannot be completed due to force majeure, the lender shall negotiate with the borrower to determine a reasonable payment deadline.

(3) During the disbursement and payment process, if the borrower experiences any of the following, it shall supplement the loan disbursement and payment conditions as required by the lender. The lender has the right to adopt stricter loan disbursement and payment conditions, and has the right to stop or suspend the disbursement and payment of loan funds, and take corresponding measures pursuant to Article 14, Section 2 of this contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Credit status declines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Business and financial status deteriorates significantly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Core business profitability is weak;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Abnormal loan fund usage or circumvention of entrusted payment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Major violations of the provisions of this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Other circumstances the lender deems appropriate.

**Article 8 Loan Principal and Interest Repayment**

1. The loan principal under this contract shall be repaid using the following type No. 2:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Installment repayment of loan principal. The repayment amounts and dates are as follows: [to be filled in as applicable]

If the lender adjusts the loan installment drawdown plan, the loan installment repayment dates and amounts agreed in this clause remain unchanged, and the borrower shall repay the loan principal on schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) One-time full repayment of loan principal upon maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Other repayment methods for loan principal: _______________________________.

2. The borrower shall repay the principal and interest under this contract in full and on time on the repayment date and interest payment date agreed in this contract.

3. If the repayment date falls on a non-banking business day of the lender, repayment shall be postponed to the next banking business day of the lender, and the non-lender banking business days shall be included in the actual loan usage days.

4. If the borrower fails to repay the loan under this contract on time and needs to extend the repayment period, it shall submit a written loan extension application to the lender ____ business days before the loan maturity date. Upon the lender's review and approval, the two parties shall separately sign a 'Loan Extension Agreement' as a supplementary agreement to this contract.

Cumulative loan extension periods for loans with a term of one year or less shall not exceed the original loan term; cumulative loan extension periods for loans with a term of more than one year shall not exceed half the original loan term.

5. Early repayment

The borrower shall repay the loan principal and interest on the date agreed in this contract.

If the borrower requests to partially or fully repay the loan principal and interest early, it shall notify the lender in writing ____ business days in advance and obtain the lender's written consent. After the lender's written consent, when the borrower repays part of the loan principal and interest early, it shall negotiate with the lender to determine the subsequent repayment term, repayment time, and repayment amount. Interest on the early-repaid loan principal shall be calculated based on the actual usage period at the loan interest rate agreed in this contract. The lender shall not adjust the loan interest already collected before the early repayment.

If the borrower requests early repayment, the lender has the right to require the borrower to pay a liquidated damages of ___% of the early repayment amount. Borrowers that are small and micro enterprises meeting national institutional and policy requirements are exempt from this liquidated damages.

6. If the borrower fails to perform its obligations as agreed in this contract, the borrower hereby irrevocably authorizes the lender to deduct the amounts payable from any account of the borrower opened at the lender and all branches and subsidiaries of Industrial Bank without going through judicial procedures, including but not limited to loan principal and interest (including principal, interest, penalty interest, compound interest), liquidated damages, and damages, and the costs of the lender in realizing its creditor rights. The borrower agrees that the lender has the right to determine the specific deduction order. If the currency of the deducted items in the account is inconsistent with the loan currency, the lender has the right to deduct at the middle exchange rate published by the lender on the deduction date and convert to the loan currency. If any account specified in this clause involves wealth management products or structured deposits, the borrower hereby irrevocably authorizes the lender to directly initiate the relevant product redemption application or take other necessary measures on its behalf, to ensure that the lender successfully deducts the above amounts, and the borrower shall provide all necessary cooperation.

**Article 9 Security**

1. Security contracts for this contract include but are not limited to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Contract numbered XXXXXXXX titled 'Maximum Amount Mortgage Contract', security method: mortgage, secured party: Fuqing Shengfeng Logistics Co., Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Contract numbered XXXXXXXX titled 'Maximum Amount Guarantee Contract', security method: guarantee, secured party: XXX;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Contract numbered ____ titled '____', security method: ____, secured party: ____;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Contract numbered ____ titled '____', security method: ____, secured party: ____;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Contract numbered ____ titled '____', security method: ____, secured party: ____;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Contract numbered ____ titled '____', security method: ____, secured party: ____.

2. In addition to the security contracts already signed above, if exchange rate fluctuations or any other events that the lender deems may affect the performance ability of the borrower or guarantor occur, the lender has the right to require the borrower to supplement a security deposit or provide new security, and to sign relevant security contracts. The borrower shall cooperate as required by the lender.

3. Before all security contracts under this contract are signed and security formalities are completed, the lender has the right to temporarily suspend various obligations such as disbursement under this contract.

**Article 10 Rights and Obligations of Both Parties**

1. Rights and obligations of the lender

(1) Lender's rights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The right to require the borrower to provide true materials in a timely manner, including personal information, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The right to require the borrower to repay the loan principal and interest on time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The right to require the borrower to provide all materials related to the loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The right to understand the borrower's production, operations, and financial status;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The right to supervise the borrower's use of the loan in accordance with the agreed purpose in this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The right to supervise loan usage and make requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. When the borrower owes the lender multiple obligations of similar nature, and the borrower's payment is insufficient or may be insufficient to repay all debts, the lender shall determine the specific repayment or deduction order when repayments are made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. The right to deduct loan principal and interest (including principal, interest, penalty interest, compound interest), liquidated damages, damages, and the costs of the lender in realizing its creditor rights from any account of the borrower opened at the lender and all branches and subsidiaries of Industrial Bank without going through judicial procedures. The borrower agrees that the lender has the right to determine the specific deduction order. If the currency of the deducted items in the account is inconsistent with the loan currency, the lender has the right to deduct at the middle exchange rate published by the lender on the deduction date and convert to the loan currency; if any account specified in this clause involves wealth management products or structured deposits, the borrower irrevocably authorizes the lender to directly initiate the relevant product redemption application or take other necessary measures to ensure the lender successfully deducts the above amounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. The lender has the right to transfer all creditor rights and security interests under this contract to a third party at any time without obtaining the borrower's consent. The borrower still bears all obligations under this contract after the lender transfers loans and security interests under this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. If the borrower fails to repay the loan principal and interest as agreed in the contract, or fails to implement the interest payment matters, or violates any agreed obligation of this contract, the lender has the right to submit the borrower's default credit information to the People's Bank of China and its established or approved credit reporting agencies and credit systems, or to the China Banking Association, banking regulatory institutions, or other administrative/judicial/supervisory departments and their established or recognized information management systems or news media for reporting and disclosure, and to take legal measures such as collection, litigation, arbitration, or applying to notary institutions for execution certificates, and may also take measures with other banking and financial institutions such as reducing or stopping credit, stopping the opening of new settlement accounts, and stopping the handling of the legal representative/borrower's new credit cards and other joint credit default disciplinary and rights protection measures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. The right to unilaterally decide to call back the loan early based on the borrower's fund collection situation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. When exchange rate fluctuations or other circumstances the lender deems may affect the security of its creditor rights occur, the borrower has the obligation to supplement security deposits or provide other pledge security, or implement other risk mitigation measures acceptable to the lender, as required by the lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. Pursuant to relevant provisions of the Commercial Bank Capital Management Measures, the lender may revoke loan commitments without prior notice, or due to the deterioration of the borrower's credit status, the lender may effectively and automatically revoke loan commitments. 'Loan commitments' as stipulated in this clause refers to loans that have not yet been disbursed or not fully disbursed under this contract; 'credit status deterioration' as stipulated in this clause includes but is not limited to deterioration of credit status or financial status, weakening of repayment ability (including or having liabilities), or the occurrence of default situations as agreed in this contract for the borrower, and other circumstances that may endanger the lender's creditor rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. If the borrower diverts loan funds, the lender has the right to require the borrower to rectify and may take measures such as calling back the loan early or downgrading the loan risk classification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. Other rights stipulated by laws, regulations, and rules, or agreed in this contract.

(2) Lender's obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. To disburse and pay loan funds as agreed in this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. To maintain confidentiality of the borrower's debt, financial, production, and operating conditions, except in the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Required by laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Required or demanded by regulatory institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Disclosed to the lender's cooperative parties.

2. Rights and obligations of the borrower

(1) The borrower enjoys the following rights:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The right to draw down and use all loans as agreed in this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The right to require the lender to fulfill its confidentiality obligations regarding materials provided to the lender as agreed in this contract.

(2) Borrower's obligations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. To promptly provide the lender with true, complete, and valid documentary materials, including all account opening information, account numbers, and loan balance information, as well as related personal information, and to cooperate with the lender's investigation, review, and inspection;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. To accept the lender's supervision or inspection of its use of credit funds and related production, operations, and financial activities, and to promptly take reasonable handling measures based on the lender's suggestions or requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. To use the loan for the purpose agreed in this contract without diversion, and to ensure it is not used for fixed asset investment or shareholder dividends; not to use the loan for equity investments; not to use the loan in areas and uses prohibited by the state from production/operation; not to use the loan to speculate in stocks or invest in financial assets; not to use the loan to purchase real estate or engage in/invest in the real estate sector; not to use the loan for inter-enterprise or enterprise-individual mutual lending activities; not to use the loan to seek illegal income; not to obtain credit funds through illegal means or crowd out or divert loans in other ways; not to use the loan for other illegal activities or other areas that violate national laws and policies; and not to use the loan in areas where regulatory authorities prohibit bank credit funds from entering; if the borrower is a local financial organization and relevant laws and regulations have other provisions, those provisions shall apply;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. To accept the lender's account monitoring and loan fund payment management pursuant to Article 7 of this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. To repay the loan principal and interest in full and on time as agreed in this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Without the lender's written consent, not to transfer all or part of the debts under this contract to a third party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Not to reduce registered capital in any way; without the lender's written consent, not to extend the capital contribution period for registered capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Before undertaking major events such as mergers, divisions, equity transfers, external investments that may affect its repayment ability, external guarantees, material increases in debt financing, etc., the borrower shall notify the lender in writing at least 30 business days in advance, obtain the lender's written consent, and actively implement the guarantee measures for timely and full repayment of the loan principal and interest under this contract as required by the lender. The above major events include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Applying to banks or other third parties for borrowing or liabilities, providing loans to third parties, or providing guarantees, mortgages, pledges, or other material increases in debt financing for third-party debts, which affects or may affect the repayment of the loan principal and interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Undertaking major equity changes and adjustments to operating methods (including but not limited to signing joint venture and cooperation agreements with foreign investors, Hong Kong, Macao, and Taiwan investors; cancellation, closure, suspension, asset transfer; division, merger, amalgamation, being merged; reorganization, restructuring, or reconstruction as a share-holding company; external investments that may affect repayment ability; using real estate, machinery and equipment, and other fixed assets or trademarks, patents, proprietary technology, land use rights, and other intangible assets to invest in or invest in joint-stock companies or investment companies; conducting property rights and business management transactions through leasing, contracting, joint management, trusteeship, etc.);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Equity changes reaching ___% (including but not limited to equity transfers, trusteeship, agency, pledge, etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. The borrower shall notify the lender in writing within 7 business days from the date of occurrence or possible occurrence of the following events, and shall actively implement the guarantee measures for timely and full repayment of the loan principal and interest under this contract as required by the lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Occurrence of major financial losses, asset losses, or other financial crises;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Suspension of operations, revocation or cancellation of business license, application or being subject to bankruptcy proceedings, dissolution, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Major crises in the operations or finances of controlling shareholders and other affiliated companies, affecting normal operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Personnel changes in the borrower's legal representative, directors, or senior management, affecting normal operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Equity changes in guarantors reaching ___% (including but not limited to equity transfers, trusteeship, agency, pledge, etc.);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Major related-party transactions between the borrower and its controlling shareholders and other affiliated companies, affecting normal operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Any litigation, arbitration, or criminal or administrative penalties that may have materially adverse consequences on its operations or financial status;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Other major events that may affect its repayment ability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Upon the lender's request (such request shall be notified to the borrower in a reasonable manner in advance, except where prior notification is not required due to the occurrence of a default event or potential default event or specific circumstances), to allow the lender's representatives to engage in the following activities during normal office hours:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Visit the places where the borrower conducts business activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Inspect the borrower's premises, facilities, factories, and equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Inquire about the borrower's account records and all other records;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Inquire about the borrower's employees, agents, contractors, and subcontractors who know or may know relevant information required by the lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. The borrower guarantees to maintain its current assets and net assets, asset-liability ratio, and current asset ratio within the following range required by the lender during the loan period: _______________________________.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Collection notices or collection documents sent by the lender to the borrower or delivered in other ways must be signed and returned to the lender by the borrower.

**Article 11 Borrower's Declarations and Undertakings**

The borrower voluntarily makes the following declarations and undertakings, and assumes legal responsibility for the authenticity of their content:

1. The borrower is a legal entity validly established and existing pursuant to the laws of the People's Republic of China, with full civil conduct capacity. The borrower guarantees to provide relevant certifications, permits, certificates, and other documents required by the lender as required.

2. The borrower has sufficient capacity to perform all obligations and responsibilities under this contract, and shall not reduce or exempt its repayment responsibilities due to any instructions, changes in financial status, or agreements signed with any entity.

3. The borrower has sufficient authorization and legal rights to sign this contract, has obtained and completed all internal approvals and authorizations or other relevant procedures required for the signing and performance of this contract, and has obtained and completed all necessary approvals, registrations, authorizations, consents, permits, or other relevant procedures from any government departments or other competent authorities required for the signing and performance of this contract. All approvals, registrations, consents, permits, authorizations, and other relevant procedures required for the signing of this contract remain fully legally effective.

4. The borrower's signing of this contract fully complies with the borrower's relevant articles of association and internal decisions as well as shareholder and board resolutions, and the borrower undertakes that such internal decisions and shareholder and board resolutions fully comply with national laws, regulations, and company articles of association, with no invalidity, non-establishment, or revocability. This contract also does not conflict with or violate the borrower's any articles of association, internal decisions, shareholder and board resolutions, or borrower's policies.

5. The signing and performance of this contract is based on the borrower's true expression of intent. The loan financing complies with legal requirements, and the signing and performance of this contract does not violate any laws, regulations, statutes, or contractual agreements binding on the borrower. This contract is legal, valid, and enforceable. If this contract becomes invalid due to the borrower's rights defects in signing and performing this contract, the borrower shall immediately and unconditionally compensate the lender for all losses.

6. All documents, financial statements, and other materials provided by the borrower to the lender under this contract are true, complete, accurate, and valid, and the borrower shall continuously maintain the various financial indicators required by the lender.

7. The borrower agrees that the loan business under this contract is subject to the regulations and practices of the lender. The lender has the right to call back the loan early based on the borrower's fund collection situation.

8. When the borrower owes multiple obligations to the lender of similar nature, and the borrower's payment is insufficient or may be insufficient to repay all debts, the lender shall determine the specific repayment or deduction order.

9. If the borrower fails to perform its obligations as agreed in this contract, the borrower hereby authorizes the lender to deduct loan principal and interest (including principal, interest, penalty interest, compound interest), liquidated damages, damages, and the costs of the lender in realizing its creditor rights from any account of the borrower opened at the lender and all branches and subsidiaries of Industrial Bank without going through judicial procedures. The borrower agrees that the lender has the right to determine the specific deduction order. If the currency of the deducted items in the account is inconsistent with the loan currency, the lender has the right to deduct at the middle exchange rate published by the lender on the deduction date and convert to the loan currency; if any account specified in this clause involves wealth management products or structured deposits, the borrower irrevocably authorizes the lender to directly initiate the relevant product redemption application or take other necessary measures to ensure the lender successfully deducts the above amounts, and the borrower shall provide all necessary cooperation.

10. Regardless of whether this contract is signed before or after, if the borrower submits any documents regarding specific transactions to the lender for review, the borrower guarantees the authenticity of all documents. The lender shall only make decisions based on the facial authenticity of the transaction documents, and the lender neither participates in nor knows the specific transaction substance conducted by the borrower, and shall not bear any responsibility.

11. The borrower confirms that, except for circumstances already disclosed in writing to the lender, the borrower has not concealed any of the following events that have occurred or are about to occur that may cause the lender to disagree with disbursing the loan under this contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Debts or liabilities assumed by the borrower, including but not limited to any undisclosed mortgages, pledges, liens, and other liability burdens established on the borrower's assets or income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Major violations and illegal acts or claim events closely related to the borrower or the borrower's main management personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Default events in debt and obligation contracts between the borrower and any other creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) No litigation, arbitration, or administrative penalties against it or its assets have occurred, are pending, or are known to the borrower as possible, regardless of whether initiated actively or by a third party, and no liquidation or cessation of business or other similar procedures have occurred against the borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Other circumstances that may affect the borrower's financial status and repayment ability.

12. The borrower undertakes to use the loan for the agreed purpose in this contract without diversion or other uses or uses in violation of the agreed purposes of this contract. It accepts and cooperates with the lender's loan payment management, post-loan management, and relevant inspections at any time, and cooperates with the lender's supervision and inspection of the borrower's use of loan funds and the borrower's production and operations, financial activities, inventory, assets and liabilities, bank deposits, cash reserves, and other matters, as well as any other requirements the lender deems necessary or appropriate.

13. To provide the lender with sufficient, valid, or other acceptable security. If the security under this contract involves real estate mortgages, the borrower shall promptly fulfill the notification obligation to the lender when it learns that the mortgaged property is to be demolished; for demolished mortgaged properties that adopt the form of property rights adjustment compensation, the lender has the right to require the borrower to repay the debt in advance, or to re-establish the mortgage and sign a new mortgage agreement. Before the new mortgage registration is completed after the original mortgaged real estate is destroyed, a guarantor meeting the security conditions shall provide security; for demolished real estate compensated by monetary means, the borrower is responsible for requiring the mortgagor to continue providing security for the primary creditor rights by opening a security deposit special account or time deposit, etc.

14. The borrower shall not reduce registered capital in any way. Without the lender's prior written consent, the borrower shall not transfer part or all of the debts under this contract to a third party. Before all debts under this contract are fully repaid, without the lender's written consent, the borrower shall not repay in advance any debts owed to creditors other than the lender (except other Industrial Bank branches).

15. To promptly notify the lender of major adverse events affecting the borrower's repayment ability, and to obtain the lender's written consent before undertaking major events such as mergers, divisions, equity transfers, external investments that may affect its repayment ability, external guarantees, and material increases in debt financing.

16. If the lender is forced to be involved in disputes between the borrower and/or any third party related to the borrower due to performing obligations under this contract, resulting in the lender incurring litigation or arbitration fees, attorney fees, and other expenses, all such expenses shall be borne by the borrower.

17. All settlement business under this contract must be conducted through settlement accounts opened at the lender.

18. The borrower undertakes that the information publicized on the National Enterprise Credit Information Publicity System is true, complete, legally valid, and undertakes to continuously agree to the lender's inquiry of the enterprise's choice to publicize and not publicize information in the system. If the lender requests asset verification, the borrower agrees to undergo asset verification as required by the lender and provide a professional asset verification report.

19. The borrower hereby declares and authorizes: the lender has the right to make necessary investigations of the borrower's credit status in accordance with national laws and relevant policies, including inquiring about the borrower's credit information from the financial credit information basic database established by the state, and may submit relevant credit information to the national financial credit information basic database in accordance with the People's Bank of China's requirements for building enterprise and individual credit reporting systems, and hereby permits relevant information to be legally inquired within the scope of authorization.

20. The borrower hereby declares and authorizes: the lender has the right to submit information about this contract and other relevant information to the above departments, institutions, and the information management systems established or recognized by them for reporting, in accordance with the needs of administrative/judicial/supervisory departments, banking regulatory institutions, and China Banking Association and other relevant information management work, and hereby permits relevant information to be legally inquired.

21. If the borrower defaults under this contract, or circumstances arise that may endanger the lender's realization of creditor rights, the lender has the right to require the borrower's shareholders to accelerate the paid-in capital contribution obligations. The borrower undertakes that its shareholders shall make capital contributions as required by the lender in a timely manner. The lender has the right to require the borrower and its shareholders not to distribute dividends.

22. The borrower undertakes that the transaction background of this loan business is genuine and legal, and is not used for money laundering or other illegal purposes.

23. The borrower hereby irrevocably undertakes that when it violates any agreed obligations of this contract, the lender may submit the borrower's default credit information to the People's Bank of China and its established or approved credit reporting agencies and credit systems, or banking industry associations, banking supervisory institutions, or other administrative/judicial/supervisory departments and their established or recognized information management systems or news media for reporting and disclosure.

The borrower also irrevocably authorizes relevant banking industry associations to share the borrower's credit default information among banking and financial institutions or even make it public to society through appropriate means.

The borrower is aware that the lender has the right to take various measures pursuant to this contract, and is aware that the lender has the right to take measures with or that banks and other banking and financial institutions have the right to jointly take measures to reduce or stop credit, stop opening new settlement accounts, and stop handling the legal representative/borrower's new credit cards and other joint credit default disciplinary and rights protection measures.

24. Other matters of the borrower's declarations and undertakings: _______________________________.

**Article 12 Early Collection**

1. During the loan period, if any of the following circumstances occurs to the borrower or guarantor (including but not limited to guarantors, mortgagors, or pledgors, same below), the lender has the right to unilaterally decide to stop paying the borrower's unused loans and call back part or all of the loan principal and interest early. For installment repayment loans, if the lender calls back one installment loan early pursuant to this contract, the other loans not yet due shall be deemed to have matured early:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Providing false materials or concealing important business and financial facts; any certification and document submitted to the lender and any item in the declarations and undertakings in Article 11 being proven to be untrue, inaccurate, incomplete, or intentionally misleading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Without the lender's written consent, changing the original loan purpose on its own, diverting the loan, or using the loan for illegal or non-compliant transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Using sham contracts with related parties to discount or pledge accounts receivable and other creditor rights without actual trade background to the lender to obtain the lender's funds or credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Refusing to accept the lender's supervision and inspection of its credit fund usage and related business and financial activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Mergers, divisions, acquisitions, reorganizations, equity transfers, external investments that may affect its repayment ability, material increases in debt financing, and other major events that the lender deems may affect the security of the loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Intentionally evading the lender's creditor rights through related-party transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Deterioration of credit status, significant weakening of repayment ability (including or having liabilities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) The borrower, the borrower's affiliated companies, guarantors, or guarantors' affiliated companies experiencing cross-default situations as stipulated in Article 15 of this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) The borrower failing to repay the principal and interest of the loan under this contract on time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) The borrower stopping repayment of its debts, or being unable to or indicating inability to repay matured debts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) The borrower ceasing operations, being declared bankrupt, dissolving, having its business license revoked, being cancelled, or experiencing deterioration of financial status, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) The borrower failing to perform the obligations agreed in Articles 10 and 13 of this contract, and other obligations agreed in this contract, or the guarantor failing to perform the obligations agreed in the security contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) The value of mortgaged property or pledged property for security has decreased or may decrease significantly, or the pledged rights must be redeemed before the loan is fully repaid;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) Abnormal changes, disappearance, or investigation and restriction of personal freedom by judicial authorities of the borrower or guarantor's legal representative, major investors, directors, supervisors, and senior management, which has or may affect the performance of obligations under this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) The borrower/guarantor or the borrower's/guarantor's controlling shareholders, actual controllers, or their related parties being involved in major litigation, arbitration, or other disputes, or their major assets being sealed, frozen, seized, enforced, or subject to other measures with similar effect, which may endanger or damage the lender's rights and interests;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) Other events agreed in this contract, or based on the borrower's fund collection situation, or other events that endanger, damage, or may endanger or damage the lender's rights and interests.

2. Upon occurrence of the above early collection situations, the lender may give the borrower a certain grace period based on the borrower's production and operations, financial status, and fund collection, etc. If the borrower still fails to take remedial measures within the grace period or the remedial measures taken do not meet the lender's requirements, the lender has the right to unilaterally decide to call back the loan early; the lender may also not give the borrower a grace period and directly decide to call back the loan early.

3. When calling back the loan early, the lender has the right to take corresponding measures pursuant to Article 14, Section 2 of this contract.

**Article 13 Borrower's Obligation to Disclose Major Transactions and Major Events to the Lender**

1. The borrower shall promptly report major transactions and major events occurring to the borrower to the lender in writing.

2. If the borrower is a group customer, the borrower shall promptly report to the lender related-party transactions of the borrower exceeding 10% of net assets in accordance with relevant regulations, including but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The related party relationships of the transaction parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The transaction items and nature of the transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The transaction amount or corresponding proportions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Pricing policies (including transactions with no amount or only symbolic amounts).

3. When significant changes occur in the basic conditions of the contract that were unforeseeable at the time of contract signing and do not belong to commercial risks, requiring renegotiation, the lender shall be promptly notified within three business days of the occurrence of such changes.

**Article 14 Liability for Breach of Contract**

1. After this contract becomes effective, both the borrower and the lender shall perform the obligations agreed in this contract. Any party that fails to perform or incompletely performs the obligations agreed in this contract shall bear corresponding liability for breach of contract.

2. If the borrower fails to use the loan for the agreed purpose, fails to conduct loan fund payment in the agreed manner, fails to comply with declarations and undertakings, provides false information in credit applications, breaches agreed financial indicators, occurrence of major cross-default events, or fails to perform any other clause agreed in this contract, the lender has the right to take one or more of the following measures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Require correction of the violation within a specified period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Stop or suspend disbursement of undisbursed loans under this contract, and stop or suspend payment of unpaid loan funds under this contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Require the borrower to supplement the loan disbursement and payment conditions meeting the lender's requirements or adjust loan payment methods, and cancel the borrower's use of 'independent payment';

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Unilaterally decide to reduce the credit limit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Unilaterally decide to accelerate all or part of the debts to maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Unilaterally terminate or dissolve this contract, require the borrower to repay due or undue loan principal and interest, and pay or compensate for related losses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) If the loan is overdue, require the borrower to pay overdue penalty interest; if the borrower diverts the loan, require the borrower to pay diversion penalty interest; require the borrower to pay compound interest on unpaid interest (including interest before and after loan maturity, diversion penalty interest, and overdue penalty interest);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Require the borrower to supplement or change guarantors, mortgaged property, pledged property, or pledged rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Implement or realize rights under any security of the relevant loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Deduct amounts payable from any account of the borrower opened at the lender and all branches and subsidiaries of Industrial Bank without going through judicial procedures, or entrust the borrower's account-opening bank to deduct amounts from its accounts, including but not limited to loan principal and interest (including principal, interest, penalty interest, compound interest), liquidated damages, damages, and the costs of the lender in realizing its creditor rights. The borrower agrees that the lender has the right to determine the specific deduction order. If the currency of the deducted items in the account is inconsistent with the loan currency, the lender has the right to deduct at the middle exchange rate published by the lender on the deduction date and convert to the loan currency; if any account specified in this clause involves wealth management products or structured deposits, the lender has the right to directly initiate the relevant product redemption application or take other necessary measures to ensure the lender successfully deducts the above amounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Initiate litigation, arbitration, or apply to notary institutions for execution certificates, and require the borrower to repay the loan principal and interest, with the costs of the creditor in realizing creditor rights borne by the borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) The lender has the right to use any movable or immovable property, tangible or intangible assets under the borrower's control and possession for pledge, lien, or other measures the lender deems appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) The lender has the right to submit the borrower's default credit information to the People's Bank of China and its established or approved credit reporting agencies and credit systems, or banking industry associations, banking supervisory institutions, or other administrative/judicial/supervisory departments and their established or recognized information management systems or news media for reporting and disclosure, and may take measures with other banking and financial institutions such as reducing or stopping credit, stopping the opening of new settlement accounts, and stopping the handling of the legal representative/borrower's new credit cards and other joint credit default disciplinary and rights protection measures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) Adjust the loan interest rate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) Downgrade the loan risk classification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) Other measures stipulated by laws and regulations, agreed in this contract, or deemed appropriate by the lender.

3. If the lender fails to provide the loan on the agreed date and amount under the conditions for drawdown and loan fund payment agreed in this contract, causing losses to the borrower, the lender shall compensate the borrower for direct economic losses caused thereby. However, in any case, the lender shall not compensate the borrower for any foreseeable or unforeseeable indirect losses arising therefrom.

4. During the performance of this contract, if the lender suffers erroneous entrusted payments, untimely payments, borrower violations of independent payment agreements under this contract, or other losses due to materials provided by the borrower being untrue, inaccurate, incomplete, or having other defects, the lender shall not bear any responsibility.

5. If the disbursement account or payment counterparty account is frozen or other reasons cause disbursement and payment disputes or other losses, the lender shall not bear any responsibility.

6. If the guarantors under this contract (i.e., guarantors, mortgagors, pledgors) experience any of the following, the lender has the right to take corresponding measures pursuant to Article 14, Section 2 of this contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The guarantor fails to perform the provisions of the guarantee contract, or credit status deteriorates, or other events that reduce guarantee capacity occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The mortgagor fails to perform the provisions of the mortgage contract, or intentionally damages the mortgaged property, or the value of the mortgaged property may or has already decreased significantly, or other events that harm the lender's mortgage rights occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The pledgor fails to perform the provisions of the pledge contract, or the value of the pledged property has or may decrease significantly, or the pledged rights must be redeemed before the loan is fully repaid, or other events that harm the lender's pledge rights occur.

**Article 15 Cross-Default**

If any of the following circumstances occurs to the borrower, the borrower's affiliated companies, guarantors, or guarantors' affiliated companies, it shall all be deemed as the borrower's simultaneous default under this contract. The lender has the right to call back the loan early pursuant to Article 12 of this contract and require the borrower to bear liability for breach of contract pursuant to Article 14 of this contract:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any loan, financing, or debt defaults or may default or is declared to be due in advance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Any guarantee or similar obligation fails to be performed, or there is a possibility of non-performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Failure to perform or violation of legal documents or contracts related to debt security and other similar obligations, or possibility of non-performance or violation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Occurrence or imminent occurrence of inability to repay due debts or mature loans/financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Being declared or about to be declared bankrupt through legal procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Transferring its assets or property to other creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Other circumstances that endanger the security of the loan principal and interest under this contract.

**Article 16 Continuity of Obligations**

All obligations of the borrower under this contract are continuous and fully and equally binding on its successors, agents, administrators, assignees, and entities resulting from its merger, reorganization, name change, etc.

**Article 17 Acceleration of Maturity of Principal and Interest**

The borrower agrees that, once the borrower fails to fulfill the declarations and undertakings in Article 11 of this contract, or fails to perform any obligation under this contract, the lender has the right to decide that all of the borrower's obligations to the lender on any other basis, including all due and undue principal and interest (including penalty interest and compound interest) repayment obligations under this contract, shall become immediately due.

**Article 18 Right of Subrogation**

The borrower hereby specifically declares that, regardless of whether the lender's creditor rights have matured, if the borrower's creditor rights or ancillary rights related thereto are about to expire within the litigation statute of limitations or have not been timely declared as bankruptcy creditor rights, or if the borrower defaults or the borrower is unable to repay the lender's due and overdue loans (including but not limited to principal, interest, and fees) or other circumstances affecting the lender's realization of creditor rights occur, for any creditor rights, accounts receivable, and other financial interests that the borrower holds against a third party, and ancillary rights related to the foregoing, the lender shall have the right to exercise the right of subrogation, including but not limited to subrogate requesting the borrower's counterparty to perform, filing claims with bankruptcy administrators, or taking other necessary actions, and the borrower waives all defenses.

**Article 19 Applicable Law, Jurisdiction, and Dispute Resolution**

1. The establishment, effectiveness, performance, dissolution, interpretation, and dispute resolution of this contract shall all be governed by the laws of the People's Republic of China (for the purposes of this contract, excluding the laws of Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan region).

2. Any disputes arising from this contract shall be resolved through friendly negotiation between the borrower and the lender; if friendly negotiation fails, both parties agree to resolve the matter in the following method No. 3:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) File a lawsuit with the people's court at the lender's place of residence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Apply to the ____ Arbitration Commission for arbitration, applying the arbitration rules of that arbitration commission in effect at the time of arbitration. Within the scope permitted by the arbitration rules, both parties agree to use summary procedures for adjudication. The arbitration award is final and binding on both parties. The place of arbitration shall be at ____.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Other methods: File a lawsuit with the people's court at the place of contract signing.

3. During the dispute period, provisions of this contract not involving the dispute shall continue to be performed.

**Article 20 Document Exchange, Communication, and Notices**

1. The borrower agrees and confirms the following address as the delivery address for notification matters under this contract and related litigation (arbitration), notarization, and other legal documents when disputes arise (including but not limited to various notices and documents from the contracting parties; complaints (or arbitration applications) and evidence, summonses, reply notices, notice of rights and obligations in litigation, notice of evidence submission, hearing notices, payment orders, judgments (including verdicts, rulings, and mediation letters), enforcement notices, and other litigation or arbitration review and hearing documents, documents for realizing mortgage property rights procedures, and enforcement phase legal documents; various notices and legal documents delivered by notary institutions) delivered to the address, and further agrees that the lender, notary institutions, courts, and other judicial institutions as well as other notification and legal document senders all have the right to choose paper or electronic delivery, among which electronic delivery methods include but are not limited to email, China Trial Process Information Disclosure Network, national unified delivery platform, local or specialized court network service platforms, and senders' electronic network platforms, electronic apps, etc.:

(1) Borrower's address:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Borrower's name: Shengfeng Logistics Group Co., Ltd.

Borrower's address: XXXXXXXXXXXXXXXXXXXXXX

Postal code: XXXXXX; Contact telephone: XXXXXXXXXXX;

Contact person: XXX.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Designated recipient name (if any): _______________________________;

Recipient address: _______________________________;

Postal code: XXXXXX; Contact telephone: XXXXXXXXXXX.

(2) The borrower agrees and confirms that any of the following electronic communication addresses shall also be valid delivery addresses:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Fax receipt, number: _______________________________;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Email, address: _______________________________;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Mobile SMS, receiving number: _______________________________;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. WeChat, WeChat ID: _______________________________;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. QQ receipt, number: _______________________________;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Other electronic communication addresses: _______________________________.

2. The delivery address agreed in Section 1 of this article applies during non-litigation stages and after disputes enter arbitration, litigation procedures, first instance, second instance, retrial, enforcement, realization of mortgage property rights procedures, supervision procedures, and compulsory enforcement notarization and other stages. If the above delivery address changes, the borrower shall in advance notify the lender in writing (during litigation or arbitration periods, the arbitration court or court shall also be notified in writing in advance; those who have handled compulsory enforcement notarization shall also notify the original notarization institution in writing) to re-confirm the delivery address and obtain acknowledgment. If prior notice is not given, the change shall be deemed not to have occurred, and the corresponding legal consequences shall be borne by the borrower. The delivery address agreed in Section 1 of this article shall still be regarded as the valid delivery address.

3. For any documents, communications, notices, and legal documents, as long as they are delivered to any address agreed in Section 1 of this article, they shall be deemed to have been delivered on the following dates (delivery to the designated recipient is deemed delivery to the person):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Mail (including express, surface mail, registered mail): the fifth business day after the mailing date shall be deemed the delivery date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Fax, email, mobile SMS, WeChat, QQ, or other electronic communication addresses: the date of sending shall be deemed the delivery date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Personal delivery: the date of the recipient's signature shall be deemed the delivery date. If the recipient refuses to sign, the server may record the delivery process by photo or video, and the document shall be deemed delivered by leaving it at the location.

4. If the delivery address provided or confirmed by the borrower is inaccurate or untrue, or if the delivery address changes but the counterparty and arbitration institution, people's court, or notary institution are not promptly notified in writing, resulting in failure of actual delivery, the borrower shall bear the corresponding legal consequences, and it shall be deemed that delivery has been completed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For mail delivery: the date of document return shall be deemed the delivery date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For personal delivery: the date recorded on the delivery receipt by the server shall be deemed the delivery date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For electronic delivery: the date of sending shall be deemed the delivery date.

5. The lender uses the address stated in the contract as the delivery address. If the lender issues a notice on its website, online banking, telephone banking, or operating outlet by way of public announcement, the date of announcement publication shall be deemed the delivery date. The lender shall not be held liable under any circumstances for any delivery failures, omissions, or delays in any postal, fax, telephone, or any other communication system.

6. All parties agree that the official seals, office seals, financial seals, contract seals, collection seals, and the lender's credit business special seals of all parties are all valid seals for each party's notifications or communications, legal document delivery, and correspondence. All employees of the borrower's entity are authorized signatories for document exchange, communication, and notices.

7. This clause is an independently existing clause in the contract, unaffected by the validity of this contract and other clauses.

**Article 21 Contract Effectiveness and Other Matters**

1. This contract takes effect from the date both contracting parties sign, affix seals, or affix fingerprints.

2. During the validity period of this contract, any tolerance, grace, or delay by the lender in exercising the rights or interests enjoyed in this contract with respect to the borrower or guarantor shall not harm, affect, or restrict all rights and interests the lender enjoys pursuant to relevant laws and regulations and this contract, and shall not be regarded as the lender's waiver of rights and interests under this contract, nor shall it affect the borrower's obligations under this contract.

3. If changes in national laws, regulations, or regulatory policies cause the lender's performance of its disbursement obligations under this contract to be inconsistent with laws, regulations, or regulatory requirements, the lender has the right to unilaterally terminate this contract, declare all disbursed loans to be due early, and the borrower shall repay immediately as required by the lender. The lender shall not bear any legal liability for failure to perform or inability to perform the contract as agreed due to such reasons.

4. If loan disbursement or payment processing fails to occur on time due to force majeure, communication or network failures, lender system failures, or other reasons, the lender shall not bear any responsibility, but shall promptly notify the borrower.

5. The lender has the right to authorize or entrust other branches of Industrial Bank to perform rights and obligations under this contract based on operational management needs (including but not limited to authorizing or entrusting other branches of Industrial Bank to sign related agreements, etc.), or to transfer the loan management under this contract to other branches of Industrial Bank for management. The borrower acknowledges this, and the lender's above actions do not require further consent from the borrower.

6. If any clause of this contract is at any time or in any aspect illegal, invalid, or unenforceable, the legality, validity, or enforceability of other clauses of this contract shall not be affected or impaired in any way.

7. The lender has specifically drawn the borrower's attention to the content of the contract's 'Important Notice Before Signing'. The borrower has fully, comprehensively, and accurately read and understood all clauses of the contract and the 'Important Notice Before Signing'. The lender has, upon the applicant's request, provided sufficient explanation and clarification of relevant clauses and personal information processing rules. Both parties have a completely identical understanding of all clauses of this contract with no objection to the contract content.

8. The subheadings of this contract are added only for reading convenience and may not be used for interpreting this contract or any other purpose.

9. The attachments to this contract are inseparable components of this contract and have the same legal effect as the main text of this contract.

10. This contract is made in three copies, with the lender holding two copies and the borrower holding one copy, each having equal legal effect.

**Article 22 Notarization and Voluntary Acceptance of Compulsory Enforcement**

1. If either party to this contract raises a notarization requirement, the other party agrees to conduct notarization at a notary institution designated by the state as required by the requesting party.

2. A contract for which compulsory enforcement notarization has been completed has the effect of compulsory enforcement. When the borrower fails to perform or inappropriately performs its debt obligations or circumstances arise for the lender to realize creditor rights as agreed in laws, regulations, and this contract, the borrower agrees that the lender shall apply to the notary institution for issuance of an execution certificate with compulsory enforcement effect, and the borrower voluntarily accepts the lender holding such execution certificate to directly apply to the competent people's court for compulsory enforcement measures. The borrower is aware of the corresponding legal consequences and undertakes not to raise any objections or defenses.

3. All parties agree: before the notary institution issues the execution certificate, it has the right to verify the borrower's non-performance or inappropriate performance of debt obligations and other related default facts pursuant to the 'Document Exchange, Communication, and Notices' clause agreed in this contract, by any one or more methods such as mail, telephone, fax, email, mobile SMS, WeChat, QQ, personal delivery, and face-to-face meetings. For verification by telephone or face-to-face: the end of the meeting or call is deemed as delivery; for verification by mail, fax, email, mobile SMS, WeChat, QQ, personal delivery, etc.: the delivery date shall execute the 'Document Exchange, Communication, and Notices' clause agreed in this contract.

4. If the borrower has objections to the default facts verified above, it shall raise them in writing and submit sufficient evidence to the notary institution within five business days of the delivery date. If not submitted on time or the notary institution deems the evidence insufficient to support its claim, it shall be deemed that the borrower confirms non-performance or inappropriate performance of debt obligations and other related default facts, and agrees that the notary institution issues the execution certificate based on the lender's application. If the notary institution has other provisions on verification methods and the evidence submission period, those provisions shall be executed.

**Article 23 Supplementary Clauses**

[Reserved for supplementary terms as agreed by both parties]

Lender (Official Seal): Industrial Bank Co., Ltd. Fuzhou Branch [Seal]

Authorized Person or Rights Holder (Signature/Seal): XXX

Date: XXX XX, 20XX

Borrower (Official Seal): Shengfeng Logistics Group Co., Ltd. [Seal]

Legal Representative or Authorized Person (Signature/Seal/Fingerprint): XXX

Date: XXX XX, 20XX

## Exhibit 4.21

**Exhibit 4.21**

PSBC (2024) ZHO5001

**WORKING CAPITAL LOAN AGREEMENT**

Contract No.: PSBC3501-YYT2025101301

**POSTAL SAVINGS BANK OF CHINA**

Dear Customer: To protect your rights and interests, please carefully read all the clauses of this Agreement before signing (especially clauses with bold headings or bold text), and pay attention to your rights and obligations under this Agreement. If you have any questions about this Agreement, please consult the Postal Savings Bank. For business consultation and complaints, please call the Postal Savings Bank customer service hotline at XXXXX. If you discover any clues of fund fraud involving our staff or violations of discipline during your business dealings, you are welcome to report them to our bank via email at XXXXX, and we thank you for helping us build a culture of "Sunshine Lending".

Borrower (full name): Shengfeng Logistics Group Co., Ltd.

Address: XXX

Phone: XXX

Fax: XXX

Email: XXX

Legal Representative / Person in Charge: XXX

Lender (full name): Postal Savings Bank of China Co., Ltd. Fuzhou Branch

Address: XXX

Phone: XXX

Fax: XXX

Email: XXX

Legal Representative / Person in Charge: XXX

Definitions

LPR (Loan Prime Rate) as referred to in this Agreement means the loan market quoted interest rate published by the National Interbank Funding Center (www.shibor.org).

Recitals

The Borrower has submitted an application for a working capital loan to the Lender, and the Lender has agreed, after review, to extend the loan in accordance with the terms and conditions of this Agreement. In accordance with the relevant laws, regulations, and rules of the People's Republic of China, the parties have reached an agreement through equal negotiation and hereby enter into this Agreement to be bound by it.

**Article 1 Loan Amount**

The loan amount under this Agreement is RMB XXX (in words: RMB XXX) working capital loan (in case of any discrepancy between figures and words, the words shall prevail).

**Article 2 Loan Term**

The loan term under this Agreement is 1 year (or 12 months). The commencement date shall be determined in accordance with Method 2.2 below, and the maturity date shall be determined in accordance with Method 2.4 below:

2.1 The date on which the first loan proceeds reach the Borrower's designated account;

2.2 XXX year XXX month XXX day as the commencement date;

2.3 The date on which all principal and final-period interest agreed under this Agreement have been fully repaid;

2.4 XXX year XXX month XXX day as the maturity date.

If the Borrower makes draws in installments, the maturity date of each draw shall not exceed the maturity date of the loan term. The actual draw date shall be based on the date stated in the Loan Certificate. The Loan Certificate is an integral and inseparable part of this Agreement.

**Article 3 Loan Purpose**

The Borrower shall use the loan funds for XXX. Without the Lender's prior written consent, the Borrower shall not change the loan purpose stipulated in this Agreement. The loan funds shall not be used for Borrower's shareholder dividends, financial assets, fixed assets, equity investments; nor shall they be used in areas and for purposes prohibited by the State.

**Article 4 Loan Interest Rate and Interest Calculation**

4.1 Loan Interest Rate

The loan interest rate under this Agreement is the annualized interest rate inclusive of value-added tax, calculated on a simple interest basis, and determined in accordance with Method 4.1.1 below:

4.1.1 Fixed rate: taking the LPR (or other) for 1-year (term) period published on the one working day prior to the first loan drawdown (or as otherwise specified) as the pricing benchmark, plus (or minus) XXX basis points, the interest rate remains unchanged throughout the loan term.

4.1.2 Floating rate: [Not applicable – left blank]

4.1.3 Floating rate (periodic adjustment): [Not applicable – left blank]

4.1.4 Other: [Not applicable]

4.2 Penalty Interest and Compound Interest

4.2.1 If the Borrower fails to repay the principal of the loan by the agreed maturity date, penalty interest shall be charged on the overdue portion at the overdue loan penalty interest rate from the date of default until the principal is fully repaid. Overdue loan penalty interest rate = loan interest rate × 150%.

4.2.2 If the Borrower fails to use the loan for the agreed purpose, penalty interest shall be charged on the misappropriated portion at the misappropriated loan penalty interest rate from the date of misappropriation until the principal is fully repaid or the misappropriation is rectified. Misappropriated loan penalty interest rate = loan interest rate × 200%.

4.2.3 For loans that are both overdue and misappropriated, penalty interest shall be charged at the misappropriated loan penalty interest rate.

4.2.4 Interest that cannot be paid on time shall accrue compound interest at the overdue loan penalty interest rate on each interest settlement date; penalty interest shall accrue compound interest at the corresponding penalty interest rate on each interest settlement date.

4.2.5 Penalty interest rates shall be adjusted in accordance with the adjustment of the loan interest rate. If the loan interest rate is adjusted pursuant to this Agreement, the penalty interest and compound interest shall be recalculated in segments from the date of adjustment.

4.3 Interest Calculation

Interest on the loan under this Agreement is calculated on the basis of 360 days per year, accruing from the actual drawdown date based on the actual number of days and the actual amount drawn. The formula is: Interest = Outstanding Loan Balance × Number of Days Used × Loan Interest Rate / 360.

4.4 Interest Settlement Method

Interest on the loan under this Agreement shall be settled in accordance with Method 4.4.1 below:

4.4.1 Quarterly settlement: the 20th of the last month of each quarter is the settlement date and the 21st is the interest payment date. If the 21st falls on a statutory holiday (e.g., Saturday, Sunday) or a statutory public holiday (e.g., Spring Festival, National Day), the payment date shall be postponed to the first working day after such holiday.

4.4.2 Monthly settlement: the 20th of each month is the settlement date and the 21st is the interest payment date. If the 21st falls on a statutory holiday or public holiday, the payment date shall be postponed to the first working day after such holiday.

4.4.3 Other methods: [Not applicable]

The last interest settlement date under this Agreement is the final repayment date of the loan, with interest settled simultaneously with principal.

4.5 Interest Payment

The Borrower shall deposit the interest due into the account stipulated in this Agreement before 16:00 Beijing time on each interest payment date, and the Lender shall deduct it directly from such account. If the interest payment date falls on a statutory holiday or public holiday, and the Borrower fails to repay the interest before the end of the first working day following such holiday, compound interest shall be charged from the day after the interest payment date at the overdue loan penalty interest rate.

**Article 5 Conditions Precedent for Drawdown**

Except where the Lender has waived any or all of the following conditions precedent, the Lender shall only be obligated to disburse the loan under this Agreement if the following conditions precedent are continuously satisfied:

5.1 Conditions Precedent for First Drawdown

When all the following conditions are met, the Borrower may apply to the Lender for the first drawdown:

5.1.1 At least 10 working days before the first drawdown date, the Borrower shall submit the following documents to the Lender:

5.1.1.1 A board resolution or shareholders' meeting resolution or other authorized body resolution convened in accordance with statutory procedures and approved by the legally required quorum of directors or shareholders, which is genuine, legal, and valid, authorizing the Borrower to apply to the Lender for the loan under this Agreement.

5.1.1.2 Where the loan is secured, the security provider (including guarantor, mortgagor, pledgor, same below) shall convene a meeting in accordance with statutory procedures and approve by the legally required quorum of directors or shareholders a resolution that is genuine, legal, and valid, authorizing the provision of security for the loan under this Agreement. For natural persons providing guarantees, valid identification documents of the guarantor and spouse (if any), proof of the guarantor's property and income (valid proof of property ownership; income certificates issued by the unit's finance or human resources department, individual income tax certificates, or other materials recognized by the Lender), and written documents from the guarantor and spouse (if any) agreeing to provide security are required. If the security provider is a listed company, a subsidiary controlled by a listed company, or a company whose shares are traded on a national securities exchange approved by the State Council, relevant materials regarding the security matter should be disclosed at the board or shareholders' meeting. If the company provides security for its shareholders or actual controllers, a shareholders' meeting resolution is required.

5.1.2 This Agreement and the security agreement or terms (if any) have come into effect.

5.1.3 The security interest (if any) has been validly established and remains effective through legally prescribed procedures, and the title certificates and other relevant authorization documents have been submitted to the Lender.

5.1.4 The Borrower has opened a settlement account with the Lender as stipulated in this Agreement.

5.1.5 Other conditions agreed upon by both parties: [Not applicable]

5.2 Conditions Precedent for Each Drawdown (Including the First Drawdown)

When all the following conditions are met, the Lender shall be obligated to disburse the loan under this Agreement to the Borrower:

5.2.1 The Borrower has delivered the following documents to the Lender, the circumstances described in such documents have not changed and remain effective, or the Borrower has made reasonable explanations and clarifications regarding the changes (unless this Agreement explicitly requires originals, the following documents shall be provided as clear, legible copies; each copy shall be stamped by the provider or issuer to certify that it is a true, complete, and latest copy of the original):

5.2.1.1 The Borrower's "Three-in-One" new business license (or latest business license copy, organization code certificate, tax registration certificate), basic deposit account information, and current valid company articles of association.

5.2.1.2 Identification documents of the Borrower's legal representative/person in charge, signature/seal specimens of each shareholder/director, legal representative/person in charge, and the Borrower's company seal, financial special seal, and authorized financial officer's signature/seal specimens.

5.2.1.3 Where the loan is secured, the security provider's (including guarantor, mortgagor, pledgor) "Three-in-One" new business license (or latest business license copy, organization code certificate, tax registration certificate), basic deposit account information, and current valid company articles of association; identification documents of the security provider's legal representative/person in charge; and signature/seal specimens of shareholders/directors/actual controllers/legal representatives/persons in charge with the proportion of voting rights compliant with valid articles of association.

5.2.1.4 For entrusted payment, transaction background proof materials that comply with the agreed purpose of the loan have been submitted.

5.2.1.5 Explanation of usage of the previous self-payment drawdown (original) and payment clearance certificate related to the loan usage.

5.2.1.6 Major transaction documents related to this project, and other transaction documents requested by the Lender.

5.2.1.7 Insurance documents related to this project (if any), with the Lender named as the first beneficiary or loss payee (original).

5.2.1.8 For entrusted payment, the Borrower shall submit a correctly completed "Loan Drawdown Application (Entrusted Payment)" (see Attachment 1 for format); for self-payment, a correctly completed "Loan Drawdown Application (Self-Payment)" (see Attachment 2 for format).

5.2.1.9 Original of correctly completed "Loan Certificate".

5.2.1.10 Other documents, reports, certificates, and materials required by the Lender.

5.2.2 The amount of each drawdown plus the outstanding principal balance as of the day before the drawdown shall not exceed the loan amount agreed in this Agreement.

5.2.3 This Agreement has come into effect, and the representations and warranties made by the Borrower in this Agreement remain valid and effective, and no default event or circumstances endangering the security of the Lender's creditor's rights under this Agreement have occurred.

5.2.4 The security agreement or terms (if any) have come into effect, and no default event or material adverse event has occurred under the security agreement or terms (if any).

5.2.5 The security interest (if any) has been validly established and remains effective through legally prescribed procedures, and the title certificates and other relevant authorization documents have been submitted to the Lender.

5.2.6 No law, regulation, rule or competent authority has prohibited or restricted the Lender from disbursing the loan under this Agreement.

5.2.7 The use of funds conforms to the loan purpose agreed in this Agreement. After the Lender's review and approval, drawdown shall be made at the agreed date and amount.

5.2.8 Other drawdown conditions agreed upon by both parties: [Not applicable]

**Article 6 Drawdown Schedule and Procedures**

6.1 Drawdown Schedule

6.1.1 The Borrower shall draw down according to the following scheduled plan (1):

(1) The Borrower shall draw down all funds under this Agreement in one lump sum on XXX year XXX month XXX day, with the specific drawdown date based on the date stated in the Loan Certificate;

(2) The Borrower shall draw down within the drawdown period, with the specific date based on the Loan Certificate. The drawdown period under this Agreement is ___/___years (or ___/___ months), starting from the date this Agreement becomes effective, until ___/___year ___/___month ___/___day. Outside the drawdown period, the Lender has the right to refuse to disburse funds;

(3) Drawdown in installments according to schedule, with specific drawdown plan in Attachment 3 (Drawdown Schedule).

6.1.2 If the Borrower is unable to draw down on the date agreed in this Agreement, the Borrower shall submit a written application to the Lender at least 10 working days before the scheduled drawdown date, stating the reason. After review and approval by the Lender, both parties shall sign a drawdown schedule amendment agreement, which shall serve as an attachment to this Agreement.

6.1.3 Without the Lender's prior written consent, the Borrower may not cancel undrawn loans under this Agreement; otherwise, the Lender has the right to charge a penalty of ___/___% of the cancelled loan amount as compensation for the Lender's fund arrangement costs and income losses.

6.2 Drawdown Procedures

6.2.1 The Borrower shall submit a correctly completed "Loan Drawdown Application" and "Loan Certificate" to the Lender at least ___/___ working days before the drawdown date.

6.2.2 After receiving the "Loan Drawdown Application" and "Loan Certificate" from the Borrower, the Lender shall, upon verification that there are no errors and the drawdown preconditions stipulated in this Agreement have been met, credit the loan funds to the account stipulated in this Agreement on the date stated in the Loan Certificate. If the review is not approved or the drawdown conditions are not met, the Lender has the right to refuse the Borrower's drawdown application and notify the Borrower in writing.

**Article 7 Payment**

The Lender has the right to manage and control the disbursement of loan funds to supervise the use of loan funds in accordance with the purposes stipulated in this Agreement:

7.1 Methods of Fund Payment

Loan funds under this Agreement shall be disbursed in accordance with Method 7.1.1 below:

7.1.1 Full Lender Entrusted Payment: Lender entrusted payment means the Lender, based on the Borrower's drawdown application and payment authorization, transfers the loan funds from the Borrower's account to the Borrower's transaction counterpart that meets the agreed purpose of this Agreement.

7.1.2 Full Borrower Self-Payment: Borrower self-payment means the Lender, based on the Borrower's drawdown application, disburses the loan funds to the Borrower's account, and the Borrower independently transfers the funds to the transaction counterparts that meet the agreed purpose of the loan.

7.1.3 If the payment to a specific transaction counterpart in a single transaction exceeds RMB 10 million, or if the Borrower has a new credit business relationship with the Lender and the Borrower's creditworthiness is average, the Lender entrusted payment method shall be used; in other circumstances, the appropriate method shall be selected according to the Lender's requirements and instructions.

7.2 Payment Management

7.2.1 For Lender entrusted payment, the Lender shall verify before fund disbursement whether the payment recipient and payment amount information in the Borrower's drawdown application match the corresponding transaction background materials. After the Lender's approval, based on the payment time and amount stated in the drawdown application, the Lender shall transfer the loan funds through the account opened by the Borrower with the Lender to the Borrower's transaction counterpart account specified in the drawdown application. For Borrowers with a good track record of loan fund usage, within the scope of the agreed loan purpose, if a reasonable emergency payment need arises, upon the Borrower's application and after the Lender's risk assessment and approval, the Lender may appropriately simplify the pre-disbursement certification materials and procedures required for entrusted payment, but the Borrower still needs to provide supplementary certification materials for the Lender's post-disbursement review within ___/___ working days after disbursement.

7.2.2 For self-payment, the Borrower shall submit loan fund usage summary reports to the Lender as required. The Lender has the right to verify through account analysis, voucher inspection, or on-site inspection whether the loan funds are used for the agreed purpose, and whether there are any circumvention of entrusted payment through fragmentation.

7.3 In the following circumstances, the Lender has the right to change the payment method from Borrower self-payment to Lender entrusted payment, or require the Borrower to supplement payment application materials, and stop or suspend the disbursement and payment of loan funds:

7.3.1 The Borrower's creditworthiness has deteriorated;

7.3.2 The Borrower's operations and financial condition have significantly worsened;

7.3.3 Abnormal use of loan funds or circumvention of entrusted payment;

7.3.4 Other material breaches of the Agreement by the Borrower.

**Article 8 Repayment**

8.1 Repayment Schedule

The Borrower shall repay the principal of the loan under this Agreement on time and in full in accordance with Method (1) below (if the actual drawdown amount is less than the agreed loan amount, each actual repayment amount shall be reduced proportionally in accordance with the ratio of actual drawdown amount to agreed loan amount):

(1) Lump sum repayment: The Borrower shall repay all loan principal in one lump sum on XXX year XXX month XXX day.

(2) Repayment in installments according to schedule, with specific repayment plan in Attachment 4 (Repayment Schedule).

8.2 Repayment Procedures

8.2.1 The Borrower shall deposit the principal due into the designated account at least ___/___ days before the agreed repayment date, and the Lender shall deduct it directly from such account.

8.2.2 If the repayment date falls on a statutory holiday or public holiday, the Borrower may choose to repay on the last working day before such holiday, and the Lender will not calculate interest from that date to the maturity date; the Borrower may also choose to repay on the first working day after such holiday, and the Lender will calculate interest at the agreed rate for the days from maturity to actual repayment. If the principal is not repaid on the first working day after a statutory holiday or public holiday, penalty interest shall be charged from the maturity date.

8.3 Repayment Priority

The Borrower shall fulfill its repayment obligations in the following order: fees, interest (including interest, penalty interest, compound interest), and principal. If the Borrower's payment is insufficient to settle all debts, the Lender may reasonably determine the repayment order in accordance with applicable laws, regulations, business practices, and internal management requirements, and reserves the right to adjust the repayment order between principal and interest (including interest, penalty interest, compound interest).

8.4 Repayment Schedule Adjustment

8.4.1 If the Borrower needs to adjust the repayment time of one or more installments within the loan term, the Borrower shall submit a written application to the Lender at least 15 working days before the agreed repayment date, stating the reason and proposing a repayment schedule adjustment recommendation.

8.4.2 The Lender shall make a decision within 7 working days of receiving the Borrower's application and notify the Borrower in writing. If the Lender agrees, both parties shall sign a repayment schedule adjustment agreement, which shall serve as an attachment to this Agreement.

8.5 Extension

8.5.1 If the Borrower needs to extend the loan term for any reason, it may apply to the Lender for an extension.

8.5.2 The Borrower shall submit a written application to the Lender at least 30 working days before the last installment of the loan matures, stating the reason for the extension.

8.5.3 The Lender shall notify the Borrower within 15 working days of receiving the above application whether it agrees to the application. If the Lender agrees to the extension, when the extended loan term reaches a new interest rate re-pricing date, the Lender has the right to charge interest at the new rate applicable to the new term from the extension date, and both parties shall sign a loan extension agreement, which shall serve as an attachment to this Agreement.

8.6 Prepayment

8.6.1 If the Borrower intends to prepay the loan, it shall submit a written application to the Lender at least 30 working days in advance, specifying the amount and date of prepayment; the Lender shall make a decision within 10 working days of receiving the Borrower's application and notify the Borrower in writing.

8.6.2 If the Borrower prepays, it shall preferentially repay the earlier-maturing loans first.

8.6.3 Once the Borrower has submitted the prepayment notice and written application to the Lender, they are irrevocable.

8.6.4 Except for one-time full repayment of all remaining principal, any single prepayment by the Borrower shall not be less than RMB 1,000,000 (one million yuan), and shall be a multiple of RMB 1,000,000.

8.6.5 Prepayments made pursuant to this article shall be paid together with all accrued interest up to the prepayment date.

8.6.6 Loans voluntarily prepaid by the Borrower may not be re-drawn.

8.6.7 If the Borrower makes prepayment after obtaining the Lender's consent pursuant to this Article, the Lender has the right to charge a penalty of ___/___% of the prepayment amount as compensation for the Lender's fund arrangement costs and expected income losses.

**Article 9 Account**

9.1 Account Information

The Borrower shall open a settlement account with the Lender before the first disbursement of the loan under this Agreement. Settlement account information is as follows:

Account Name: Shengfeng Logistics Group Co., Ltd.

Bank: Postal Savings Bank of China Co., Ltd. Fuzhou Gulou Sub-branch

Account Number: XXX

Payment System Number: XXX

9.2 Account Management

9.2.1 The settlement account is the Borrower's deposit and settlement account. The Borrower shall deposit funds into the settlement account including but not limited to the following items, and promptly provide information on the inflows and outflows of such account, and accept supervision:

9.2.1.1 Loan funds under this Agreement;

9.2.1.2 Other funds held by the Borrower related to this Agreement, including but not limited to sales returns, proceeds from debt, subsidy funds, etc.

9.2.2 The settlement account is subject to the Lender's supervision. If the Borrower's cash flow is abnormal and may affect the security of the loan under this Agreement, the Lender has the right to inquire with the Borrower and take measures such as temporarily suspending fund payments. If necessary, the Borrower shall sign an "Account Management Agreement" or "Special Account Management Agreement for Debt Funds" as required by the Lender, as an attachment to this Agreement.

9.2.3 If the Borrower has opened a revolving fund account at other financial institutions, it shall report to the Lender on the fund inflows and outflows of such account on a ___/___ (monthly/quarterly) basis. The information of the Borrower's revolving fund accounts at other financial institutions is as follows: [Not applicable]

**Article 10 Security**

The security for the debt under this Agreement is provided in accordance with Items 10.1 and 10.2 below (multiple selections available):

10.1 The guarantor XXX, pursuant to the "Maximum Amount Guarantee Agreement" with reference number PSBC3501-YYT2024081603, provides joint and several liability guarantee to the Lender;

10.2 The mortgagor Fuzhou Dongjin Hongyе Real Estate Co., Ltd., pursuant to the "Maximum Amount Mortgage Agreement" with reference number PSBC3501-YYT2024081602, provides mortgage security to the Lender. The mortgaged property is: XXX commercial real estate;

10.3 The pledgor ___/___ pursuant to the agreement with reference number ___/___ "___/___" provides pledge security to the Lender. The pledged property is: ___/____;

10.4 Other security measures: ___/_____.

**Article 11 Representations and Warranties**

The Borrower makes the following representations and warranties to the Lender, which shall remain continuously valid and true and accurate throughout the term of this Agreement:

11.1 The Borrower is duly incorporated and validly existing under the laws of the People's Republic of China, and possesses all necessary rights, authorizations, and approvals to sign and perform this Agreement.

11.2 The person signing this Agreement is the Borrower's duly authorized representative. All terms of this Agreement represent the Borrower's genuine intent, and this Agreement is legally binding on the Borrower upon execution.

11.3 The Borrower's signing of this Agreement and performance of its obligations hereunder does not violate any laws, regulations, rules, judgments, decisions or orders applicable to the Borrower, and will not conflict with any other agreements it has entered into or its articles of association or any obligations assumed thereunder, either legally or in terms of commercial interests.

11.4 All documents and materials provided by the Borrower to the Lender are true, accurate, complete, valid, and free of any omissions or misrepresentations; all submitted copies are consistent with the originals.

11.5 The financial reports provided by the Borrower comply with relevant legal regulations and truthfully and accurately reflect the Borrower's financial condition during the reporting year, and the Borrower's financial condition has not undergone any material adverse change since the most recent reporting date.

11.6 The Borrower has lawful ownership or disposition rights over its assets and interests. As of the effective date of this Agreement, except as disclosed in writing by the Borrower, none of the Borrower's assets or interests are subject to any form of attachment, pledge, lien, or other form of security interest or guarantee; and there are no agreements or undertakings that could lead to such attachment, pledge, lien, or other form of security interest.

11.7 In its business activities, the Borrower strictly complies with laws and regulations and conducts business within the scope of its business license or as legally approved, and timely handles all necessary approvals, registrations, or filings required for its business activities.

11.8 The Borrower has employed the necessary management and staff for its operations and management, and their employment and terms of employment comply with applicable laws and regulations.

11.9 As of the date of signing this Agreement and during the performance of this Agreement, the Borrower has not and will not have any unpaid wages, medical, disability, bereavement benefits, or compensation owed to its employees.

11.10 The Borrower has a good credit record with no significant adverse credit records.

11.11 The Borrower has not concealed any litigation cases, arbitration cases, administrative proceedings, asset preservation measures, compulsory enforcement proceedings, or other material adverse events that have occurred or may occur and could materially affect its signing or performance of this Agreement, or could have a material adverse effect on its business and financial condition.

11.12 The Borrower guarantees that it will not violate normal repayment order by giving priority to repayment of other debts, and currently and in the future will not sign any agreement or arrangement that would cause the loan under this Agreement to be subordinated.

11.13 Borrower's environmental and social risk management representations and warranty terms:

11.13.1 The Borrower declares and warrants that its internal management documents related to environmental and social risks comply with legal and regulatory requirements and are effectively implemented;

11.13.2 The Borrower declares and warrants that there are no major lawsuits or arbitration cases related to environmental and social risks.

11.14 The Borrower undertakes to accept the Lender's supervision, strengthen environmental and social risk management, and undertakes the following:

11.14.1 The Borrower undertakes that all its environmental and social risk-related behaviors and practices are compliant;

11.14.2 The Borrower undertakes to establish sound environmental and social risk internal management systems, with detailed provisions on the responsibilities, obligations, and penalties of relevant responsible personnel;

11.14.3 The Borrower undertakes to establish sound environmental and social risk emergency response mechanisms and measures;

11.14.4 The Borrower undertakes to establish a dedicated department or designate dedicated personnel to be responsible for environmental and social risk matters;

11.14.5 The Borrower undertakes to cooperate with the Lender or its recognized third parties in assessing and inspecting the Borrower's environmental and social risks;

11.14.6 The Borrower undertakes to respond appropriately or take other necessary actions in the face of strong public or stakeholder challenges regarding the Borrower's control of environmental and social risks;

11.14.7 The Borrower undertakes to urge important related parties to strengthen management and prevent the spread of environmental and social risks from related parties to the Borrower;

11.14.8 The Borrower undertakes to implement other matters that the Lender deems relevant to controlling environmental and social risks.

11.15 The Borrower shall be responsible for the authenticity, validity, and legality of the materials provided to the Lender, and agrees that the Lender may use the above materials and information for anti-money laundering risk management and other purposes. The Borrower shall not use the Lender's services or loan to engage in illegal criminal activities such as money laundering and terrorist financing, and when risk characteristics prescribed by regulators or identified by the Lender appear during the loan business relationship, the Lender has the right to conduct necessary due diligence investigations, up to and including terminating or canceling services.

**Article 12 Rights and Obligations**

The rights and obligations of both the Borrower and Lender are stipulated as follows:

12.1 The Borrower shall draw down in accordance with the drawdown schedule agreed in this Agreement, and repay the principal, interest, penalty interest, compound interest, liquidated damages, and other fees of the loan on time and in full.

12.2 The Borrower shall use the loan funds for the purposes stipulated in this Agreement, and shall not withhold or misappropriate loan funds, and shall not use the loan under this Agreement for securities, fixed asset investment, or other areas where investment of loan funds is prohibited by laws, regulations, and rules.

12.3 The Borrower shall submit to the Lender by May 31 of each year the audited full set of financial reports for the previous accounting year (including balance sheet, income statement, cash flow statement and audit report); within 20 days of the beginning of each quarter, submit to the Lender the full set of financial reports for the previous quarter; and by September 10 of each year, submit to the Lender the full set of financial reports for the first half of the year. If the Borrower is a listed company, the Borrower's financial reports shall be subject to the company's annual and quarterly periodic reports disclosed publicly, and submitted to the Lender after public announcement.

12.4 The Borrower undertakes that if any of the following actions would have a material adverse effect on the Borrower's performance of its obligations under this Agreement, it shall first obtain the Lender's written consent:

12.4.1 Changing its operating model or property rights organizational form, such as contracting, leased management, joint ventures, mergers, acquisitions, divisions, equity restructuring, equity transfers, trusteeship (takeovers), as well as external investments, cooperation, joint ventures, reorganizations, asset transfers, enterprise transformation/reform, or listing that may affect its ability to repay debts;

12.4.2 Reducing its registered capital, or disposing of major assets by sale, donation, leasing, lending, transfer, or otherwise, or providing guarantees for third-party debts, or using major assets or revenues as collateral or pledge for its own or third-party debts, or securitizing major assets or revenues;

12.4.3 Amending its articles of association, shareholder agreement, or other founding documents, or changing its business scope or main business;

12.4.4 Early repayment of other long-term debts;

12.4.5 Substantial increase in debt financing;

12.4.6 Signing agreements or assuming similar obligations that would materially adversely affect the Borrower's ability to perform its obligations under this Agreement;

12.4.7 In the event of failure to repay the Lender's due interest on time and any breach of obligations under this Agreement, distributing dividends to shareholders or transferring or distributing benefits to shareholders in any other manner, or if shareholders are found to be misappropriating funds.

12.5 The Borrower undertakes that when any of the following events occur, it shall immediately notify the Lender on the same day and provide written notice to the Lender within 5 working days from the date of occurrence. If the Borrower is a listed company, the Borrower undertakes that if the following events occur, the Borrower shall disclose them in accordance with listed company information disclosure rules and submit them to the Lender:

12.5.1 The Borrower or the Borrower's legal representative, controlling shareholder, or actual controller is involved in arbitration, major civil or criminal disputes, or other legal disputes; involves media, environmental, or other major negative information; or the legal representative and internal senior management (mainly shareholders, senior management, or financial personnel) have abnormal personnel changes, including disappearances, detention, "Double Regulation", or residential surveillance;

12.5.2 The Borrower has been declared or applied for bankruptcy, reorganization, suspension of operations, dissolution, revocation, been ordered to suspend operations, had its license revoked or revoked, been deregistered or dissolved, or other circumstances have occurred that materially affect its ability to repay debts or demonstrate its unwillingness to repay;

12.5.3 The Borrower's major assets have been seized, attached, frozen, or compulsorily executed, or have been damaged or destroyed for any other reason;

12.5.4 Changes in the Borrower's legal name, domicile, communication address, business scope, contact information, registered capital, legal representative, etc.;

12.5.5 The Borrower's debt at any financial institution has matured (including declared early maturity) and has not been repaid or has not been repaid on time, or there are abnormal credit situations or frozen credit limits at any financial institution, or creditors are pursuing overdue debts or seeking compensation;

12.5.6 The Borrower loses its key raw material suppliers or major product sales vendors who are not easily replaceable;

12.5.7 The collateral or pledged property has significantly depreciated or been privately disposed of, the security has been hollowed out, or the guarantor has experienced major emergencies leading to a decline in guarantee capacity;

12.5.8 Other events have occurred that would cause the Borrower to be unable to perform the obligations defined in this Agreement, or representations and warranties made under this Agreement have become untrue or inaccurate material adverse events.

12.6 During the loan repayment period, the Borrower's profits, depreciation, and retained earnings shall preferentially be used to repay the Lender's due principal and interest, and only secondarily consider shareholder dividends. During the operating period, shareholders may not misappropriate funds in any manner that affects the Borrower's normal operations.

12.7 When the security under this Agreement undergoes significant adverse changes, the Borrower shall promptly provide other security measures recognized by the Lender as required by the Lender.

12.8 The Borrower undertakes that the Lender has the right to conduct on-site or off-site investigations of the Borrower, and to conduct post-loan inspections on the Borrower's operating conditions, financial condition, use of loan funds, payment conditions, and repayment conditions. The Borrower shall actively cooperate.

12.9 The Borrower undertakes that the Lender has the right to recover the loan funds under this Agreement in advance based on the Borrower's fund recovery situation.

12.10 If either party is unable to perform this Agreement due to force majeure, it shall promptly notify the other party and take effective measures to prevent losses from expanding. The party affected by force majeure shall provide the other party with detailed information about the force majeure event and proof documents issued by relevant government authorities regarding the occurrence and impact of the force majeure event within 20 days of the event's occurrence. Both parties shall promptly negotiate to resolve the matter.

12.11 The Lender has the right to inquire about the Borrower's hidden local government debt balance. If it is found that the Borrower has illegally added local government hidden debt, the Lender will stop providing financing and suspend drawdowns under signed financing agreements. At the same time, the Lender has the right to report the relevant situation to regulatory authorities.

**Article 13 Related-Party Transaction Disclosure**

13.1 If the Borrower is a group customer:

The Borrower shall promptly report to the Lender any related-party transactions involving amounts exceeding 10% of its net assets, including the related relationships of the transaction parties, the nature of the transaction, the amount or proportion of the transaction, and pricing policies (including transactions with no consideration or only nominal consideration).

13.2 In any of the following circumstances, the Lender has the right to unilaterally stop paying the Borrower's unused loan funds and demand early repayment: using fictitious contracts with related parties to discount or pledge receivables and accounts receivable to banks to obtain bank funds or credit; refusing to accept the Lender's supervision and inspection of its credit fund usage and financial activities; major mergers and acquisitions, reorganizations and other circumstances that the Lender believes may affect loan security; intentionally damaging the bank's creditor's rights through related-party transactions.

**Article 14 Events of Borrower Default, Circumstances Endangering Creditor's Rights Security, and Remedies**

14.1 Events of Default by the Borrower:

14.1.1 The Borrower violates any provision of this Agreement or breaches any statutory obligation.

14.1.2 Any representation or warranty made by the Borrower in this Agreement is proven to be untrue, inaccurate, or misleading.

14.1.3 The Borrower clearly indicates or demonstrates through its conduct that it will not perform any obligation under this Agreement.

14.1.4 Loan application documents contain false information.

14.1.5 Failure to provide true and complete financial, business, and other relevant materials as required by the Lender.

14.1.6 Failure to use the loan for the agreed purpose, misappropriation of loan funds, or failure to disburse loan funds in the agreed manner.

14.1.7 Failure to repay principal and interest on time.

14.1.8 Refusing or obstructing the Lender's supervision and inspection of loan usage.

14.1.9 Transfer of assets, misappropriation of funds to evade debts.

14.1.10 Failure to comply with promised matters and breach of agreed financial indicators.

14.1.11 Occurrence of material cross-default events (circumstances where there are other debt defaults or defaults at other financial institutions are deemed cross-defaults, same below).

14.1.12 Environmental and social risk management representations, warranties, and undertakings of the Borrower have not been earnestly fulfilled.

14.1.13 The Borrower has been penalized by relevant government authorities for poor environmental and social risk management.

14.1.14 The Borrower's poor environmental and social risk management has been strongly questioned by the public or media.

14.1.15 Other events of default related to environmental and social risk management agreed between this institution and the Borrower, including cross-default events.

14.2 Circumstances Endangering Creditor's Rights Security:

14.2.1 The Lender believes that any of the following circumstances may endanger the security of its creditor's rights under this Agreement: the Borrower undergoes contracting, trusteeship (takeover), leased management, equity restructuring, reduction of registered capital, investment, joint venture, merger, acquisition, reorganization, division, joint venture, (applied for) cessation of operations, applied for dissolution, revocation, being ordered to suspend operations, (applied for) bankruptcy, change of controlling shareholders/actual controllers or major asset transfers, suspension or cessation of operations, being subjected to high fines by authorities, being deregistered or having its business license revoked, involvement in major legal disputes, serious difficulties in production and operations or deterioration of financial condition, or the legal representative or principal responsible persons being unable to perform their duties normally.

14.2.2 The Lender believes that any of the following circumstances may endanger the security of its creditor's rights under this Agreement: the Borrower fails to perform other due obligations, transfers property at low prices or for no consideration, reduces third-party debts, is reluctant to exercise creditor's rights or other rights, or provides security for third parties.

14.2.3 Shareholders abuse the company's legal person status or shareholders' limited liability to evade debts, and the Lender believes this may endanger the security of its creditor's rights under this Agreement.

14.2.4 Any drawdown condition or payment condition stipulated in this Agreement has not been or is no longer continuously satisfied.

14.2.5 Any of the following circumstances have occurred with the security provider, which the Lender believes may endanger the security of its creditor's rights under this Agreement:

14.2.5.1 Breach of any provision of the security agreement or terms (if any) or the representations and warranties contain any fraud, errors, or omissions;

14.2.5.2 Occurrence of contracting, trusteeship (takeover), leased management, equity restructuring, reduction of registered capital, investment, joint venture, merger, acquisition, reorganization, division, joint venture, (applied for) cessation of operations, applied for dissolution, revocation, (applied for) bankruptcy, change of controlling shareholders/actual controllers or major asset transfers, suspension or cessation of operations, being subjected to high fines by authorities, being deregistered or having its business license revoked, involvement in major legal disputes, serious difficulties in production and operations or deterioration of financial condition, inability of legal representative or principal responsible persons to perform their duties normally, which may affect the security provider's ability to perform its guarantee obligations;

14.2.5.3 Other circumstances where the guarantee capacity is lost or may be lost.

14.2.6 Any of the following circumstances have occurred with the mortgaged or pledged property, which the Lender believes may endanger the security of its creditor's rights under this Agreement:

14.2.6.1 The mortgagor or pledgor has committed any fraud, errors, or omissions in any provision of the mortgage agreement or pledge agreement, or in the representations and warranties;

14.2.6.2 Damage, loss, or depreciation of the mortgaged or pledged property due to third-party actions, national expropriation, confiscation, requisition, no-compensation recovery, demolition, market changes, or any other reason;

14.2.6.3 The mortgaged or pledged property has been sealed, attached, frozen, deducted, retained, auctioned, under administrative supervision by authorities, or its ownership is disputed;

14.2.6.4 Other circumstances that may endanger the Lender's realization of the mortgage or pledge;

14.2.7 Other circumstances that the Lender believes may endanger the security of its creditor's rights under this Agreement.

14.3 Remedies

Upon occurrence of any of the circumstances described in Articles 14.1 and 14.2, the Lender has the right to take one or more of the following remedial measures and pursue corresponding legal liability:

14.3.1 Require the Borrower to rectify within a time limit, or adjust the loan interest rate;

14.3.2 Require the Borrower to supplement drawdown or payment conditions;

14.3.3 Stop or suspend the disbursement of loans;

14.3.4 Stop the disbursement of loan funds, or adjust the loan payment method;

14.3.5 Cancel undrawn loan amounts, reduce credit limits, or downgrade the loan risk classification;

14.3.6 Declare the loan due immediately and simultaneously require the Borrower to repay the principal, interest, penalty interest, compound interest, liquidated damages, and other fees of all disbursed loans within a time limit;

14.3.7 Charge penalty interest and compound interest to the Borrower in accordance with this Agreement in the event of loan overdue or misappropriation;

14.3.8 For amounts due and payable by the Borrower under this Agreement and related agreements/documents, the Borrower hereby irrevocably authorizes the Lender: the Lender may directly deduct RMB funds from any account/digital RMB wallet of the Borrower opened at the Postal Savings Bank of China and its branches to pay the principal, interest, compound interest, penalty interest, liquidated damages, compensation, and fees and other charges that the Borrower is required to pay under laws, regulations, and administrative rules, without prior notice to the Borrower. If the currency of the funds in the account/digital RMB wallet differs from the currency of the Borrower's debt under this Agreement, the Lender has the right to convert it at the spot exchange rate on that day to settle the debt under this Agreement. For exchange transactions that require settlement and sale, the Borrower is obligated to cooperate with the Lender, and the exchange rate risk shall be borne by the Borrower. If the financial assets in the account/digital RMB wallet have not yet matured, the Lender may first process an advance payment and deduct the corresponding amounts to repay the debt after maturity, until all debts of the Borrower under this Agreement are fully settled. For fully prepaid funds, interest shall be calculated at the posted active deposit rate on the deduction date; for partially prepaid funds, the prepaid portion shall be calculated at the posted active deposit rate on the deduction date. Interest losses arising from deduction shall be borne by the Borrower. Even if the Borrower has made this irrevocable authorization, if the Lender so requires, the Borrower shall still cooperate in completing all relevant transfer procedures;

14.3.9 Exercise security interests;

14.3.10 Require guarantors to assume guarantee liability;

14.3.11 Require the Borrower to provide new security for all debts under this Agreement;

14.3.12 Rescind this Agreement;

14.3.13 Require the Borrower to pay a penalty equal to 1% of the outstanding loan balance at the time of the default event, which is not sufficient to compensate the Lender for its losses, the Borrower shall continue to assume compensation liability;

14.3.14 Require the Borrower to compensate the Lender for all losses;

14.3.15 Other remedial measures stipulated in this Agreement, provided in relevant laws and regulations, or deemed necessary by the Lender.

**Article 15 Fee Allocation**

15.1 Unless otherwise agreed by both parties, all taxes arising in connection with this Agreement and its performance shall be borne by each signing party in accordance with applicable laws and regulations.

15.2 Fees for legal services, insurance, appraisal, registration, custody, authentication, notarization, and other fees related to this Agreement and the security under this Agreement shall be borne by the contracting parties in accordance with laws, regulations, administrative rules, and other normative documents; if laws, regulations, administrative rules, and other normative documents do not specify otherwise, the contracting parties may agree.

15.3 All fees actually incurred by the Lender to realize its creditor's rights (including but not limited to litigation fees, preservation fees, enforcement fees, arbitration fees, attorney fees, auction fees, travel fees, etc.) shall be borne by the Borrower (except fees required by laws, regulations, and administrative rules to be borne by the Lender).

**Article 16 Set-off, Transfer, and Reservation of Rights**

16.1 The Borrower shall make full payment of all amounts due under this Agreement, and the Borrower may not claim any offset, deduction, or withholding, or set off against any debts owed by the Borrower's lender and its branches. If any law requires the Borrower to deduct or withhold any amounts paid to the Lender, the Borrower shall pay the Lender an additional amount so that the amount actually received by the Lender is equal to the amount that should have been received without such deduction or withholding.

16.2 The successors of both parties under this Agreement are legally bound by this Agreement.

16.3 Without the Lender's prior written consent, the Borrower may not transfer or otherwise dispose of all or part of its debts under this Agreement.

16.4 Without the Borrower's consent, the Lender has the right to transfer all or part of the creditor's rights under this Agreement to a third party. The Lender has the right to transfer its rights under the loan agreement to others, and for the purpose of transfer, provide to intermediary institutions and assignee institutions the personal information of the Borrower and guarantor as agreed in the loan agreement regarding identity, address, occupation, telephone, credit records. The Lender's transfer of rights will be notified to the Borrower and guarantor; notification may be made by written notice, announcement in public media or website, telephone, or text message, and personal information of the recipient and contact method shall be disclosed at that time. If the Lender's rights transfer requires a change in security registration, the guarantor shall cooperate.

16.5 Any tolerance, indulgence, preference, or delayed exercise by the Lender of any rights under this Agreement shall not affect, damage, or limit all the rights enjoyed by the Lender under this Agreement and in accordance with laws and regulations, and shall not be deemed as a waiver of the Lender's rights and interests under this Agreement, nor shall it exempt the Borrower from any obligations assumed under this Agreement.

**Article 17 Credit Information Authorization**

The Borrower agrees that the Lender may query the Borrower's credit information in the national financial credit information database in accordance with national relevant regulations during the business application period and the duration of the business relationship, and agrees that the Lender may submit the Borrower's information (including adverse credit information) to the financial credit information database.

**Article 18 Proof of Debt**

Unless there is reliable and definite contrary evidence or obvious errors, the Lender's internal accounting records regarding the principal, interest, fees, and repayment records, as well as the vouchers and certificates generated in the process of the Lender handling drawdown, repayment, payment of interest, and collection of loans from the Borrower, all constitute conclusive evidence confirming the creditor-debtor relationship under this Agreement.

**Article 19 Contract Modification**

19.1 If the Lender needs to delegate the execution of the rights and obligations under this Agreement to other institutions of Postal Savings Bank of China Co., Ltd. due to business needs, or transfer the loan business under this Agreement to other institutions of Postal Savings Bank of China Co., Ltd. for management, the Borrower acknowledges this. The authorized institution of Postal Savings Bank of China Co., Ltd. or other institution of Postal Savings Bank of China Co., Ltd. accepting the loan business has the right to exercise all rights under this Agreement, has the right to file lawsuits with courts, submit arbitration decisions or apply for compulsory enforcement in the name of such institution regarding disputes under this Agreement.

19.2 Unless otherwise provided in this Agreement, after this Agreement becomes effective, any changes or modifications to this Agreement must be agreed upon by both parties in writing.

**Article 20 Notices**

20.1 All notices under this Agreement must be made in writing and delivered by personal service, registered mail, express courier, or in electronic form via email, fax, mobile phone, or WeChat to the address agreed in this Agreement.

20.2 The provisions of this article apply to notices, letters, agreements, written documents, and other documents related to this Agreement and the matters herein, including but not limited to documents delivered during the performance of the Agreement, documents related to disputes, as well as documents and legal papers related to mediation, litigation, arbitration, enforcement, and other proceedings.

20.3 If the Borrower agrees to electronic delivery, the Borrower shall provide the Lender with its mobile phone number, email address, fax number, or WeChat account (electronic delivery has the same legal effect as physical delivery):

☐ Agree to electronic delivery. The Borrower's electronic delivery contact information is as follows:

Mobile: / \| Email: / \| WeChat: / \| Fax: /

☑ Do not agree to electronic delivery

20.4 If the Borrower's delivery address or contact information changes, such as phone disconnection, malfunction, cancellation, deletion, etc., the Borrower shall promptly notify the Lender of the updated delivery address or contact method by written/electronic banking/customer service phone. If the delivery address or contact method is incorrect or has changed but has not been reported on time, the original agreed delivery address or contact method shall prevail; after the Borrower has modified the delivery address or contact method and notified the Lender, the new delivery address or contact method shall prevail.

20.5 Notices shall be deemed delivered on the following dates:

(1) Personal service or courier delivery: the date on which the recipient signs the delivery receipt or acknowledgment slip;

(2) Electronic delivery: the date on which the notice enters the system designated by the recipient to receive electronic information.

Where two or more methods are used simultaneously, the earliest date of arrival shall prevail.

20.6 If the delivery address provided by a party is incorrect, the delivery address changes without notification, or the recipient refuses to accept delivery, causing the relevant documents to fail to be physically received: for personal service, the service person may photograph or record the delivery process and leave the document at such address, and the date of leaving the document shall be the date of delivery; for postal service, the date on which the document is returned shall be the date of delivery; for electronic delivery, when the delivery information reaches the electronic delivery address system, the delivery is deemed effective.

**Article 21 Confidentiality**

21.1 Both parties to this Agreement shall have a confidentiality obligation with respect to information provided by the other party, and such obligation shall remain effective for a long period; however, either party has the right to make disclosures in any of the following situations: 1) disclosure of information that has become publicly known (not including information that became publicly known due to that party's violation of this Article); 2) disclosure of such information in any litigation or arbitration; 3) disclosure of such information within the scope required by any applicable laws and regulations; 4) disclosure of such information in accordance with the listing rules of any stock exchange; 5) disclosure of such information to any government, financial, tax, or other administrative authority within the scope required by such authority; 6) disclosure of such information to its directors, management, employees, or professional advisors (including but not limited to lawyers, accountants, etc.), provided that the disclosing party has obtained from the recipient a commitment to comply with the confidentiality obligation of this Article; 7) disclosure of such information with the consent of the information provider.

21.2 The Lender may disclose the Borrower's information to its affiliates or any person with whom it may make or has made any transfer, participation, or other agreement related to this Agreement.

**Article 22 Notarization**

If the Lender so requests, both parties shall handle notarization granting enforcement effect on the creditor's documents for this Agreement and the relevant security agreement or terms (if any). If the Borrower or guarantor fails to perform the repayment or settlement obligations in accordance with this Agreement or the security agreement or terms (if any), the Lender has the right to apply to the notarization institution for an enforcement certificate and apply to the people's court with jurisdiction for compulsory enforcement. Fees arising from notarization shall be handled in accordance with applicable laws, regulations, and regulatory provisions.

**Article 23 Governing Law**

This Agreement is governed by and shall be construed in accordance with the laws of mainland China.

**Article 24 Dispute Resolution**

24.1 Both parties hereby agree and confirm that any disputes arising between the Borrower and the Lender in the performance of this Agreement shall be resolved through negotiation; if negotiation fails, it shall be resolved in accordance with Method 24.1.1 below:

24.1.1 File a lawsuit with the people's court with jurisdiction at the Lender's domicile;

24.1.2 Submit to ___/___ Arbitration Commission for arbitration. The arbitration shall be conducted at ___/___ (place of arbitration) in accordance with the arbitration rules and procedures then in effect of the ___/___ Arbitration Commission. The arbitration language shall be Chinese. The arbitral award shall be final and binding on both parties.

24.2 During litigation or arbitration, the terms of this Agreement not in dispute shall continue to be performed.

**Article 25 Other Provisions**

25.1 ☐ Both the Borrower and the Lender have reached a comprehensive deepened cooperation intention, agreed to establish a long-term and stable "partner, main banking" relationship, and the Lender will provide comprehensive and precise services to the Borrower. After friendly negotiation, the following Method ___/___ shall be adopted to sign the "Postal Savings Bank of China Co., Ltd. Main Banking Client Cooperation Agreement". (If "√" is marked in the "□" or relevant information is filled in, it is deemed that this article is agreed; if this article is not involved, mark "×" in the "□", and other terms of this Agreement shall not be affected.)

1. Simultaneously sign the "Postal Savings Bank of China Co., Ltd. Main Banking Client Cooperation Agreement" when this Agreement is signed.

2. Sign the "Postal Savings Bank of China Co., Ltd. Main Banking Client Cooperation Agreement" within 10 working days after this Agreement is signed.

3. Already signed the "Postal Savings Bank of China Co., Ltd. Main Banking Client Cooperation Agreement", agreement number: ___/___ .

25.2 The Lender has the right to unilaterally cancel the Borrower's loan commitment, refuse the Borrower's drawdown application, or automatically cancel the Borrower's loan commitment due to the Borrower's deteriorating creditworthiness, at any time without prior notice. If this article conflicts with other articles, this article shall prevail. The Borrower shall submit an application to the Lender before each drawdown.

25.3 During the loan period, without the Lender's prior written consent and before the loan is settled, the Borrower shall not distribute dividends to shareholders, withdraw or misappropriate funds through equity and debt investments, shall not transfer equity, shall not pledge the Borrower's equity to third parties for debt financing, shall not newly provide guarantees to enterprises outside the group. The Borrower shall not use loan funds for real estate development, fixed asset investment, equity investment, and other areas prohibited by the State and regulators. Once it is discovered that loan funds have been misappropriated, returned, or re-financed, the Lender will terminate the provision of financing, terminate drawdowns under signed financing agreements, and recall disbursed financing in advance.

**Article 26 Supplementary Provisions**

26.1 This Agreement is subject to the following provisions under Item 26.1.1:

26.1.1 This Agreement is a specific business contract under the loan authorization agreement with reference number PSBC3501-YYT2024081601 named "Maximum Amount Mortgage Credit Limit Agreement" (hereinafter referred to as the authorization agreement). The contracting parties and legal relationships under this Agreement are all subject to the constraints of the authorization agreement.

26.1.2 This Agreement is an independent credit document signed by the Borrower and the Lender.

26.2 If any clause of this Agreement is determined to be invalid or unenforceable by a court with jurisdiction after this Agreement is signed, or becomes invalid or unenforceable due to legislative action after this Agreement is signed, the other clauses of this Agreement shall not be affected. The Borrower and the Lender shall negotiate in a timely manner to modify the relevant clauses.

26.3 The section headings in this Agreement are for reference purposes only and shall not serve as the basis for interpreting the content of this Agreement.

26.4 This Agreement shall become effective when the legal representatives/persons in charge or authorized representatives of both parties sign (or stamp) and affix company seals or contract seals.

26.5 This Agreement is made in two (2) copies; the Lender and the Borrower each hold one (1) copy; the mortgage registration authority holds ___/___ copies; the notarization authority holds ___/___ copies. Each copy has equal legal effect.

26.6 The following attachments are integral parts of this Agreement and have the same legal effect as this Agreement. Unless otherwise expressly stated, the terms used in the attachments have the same meaning as in this Agreement:

Attachment 1: Postal Savings Bank of China Corporate Loan Drawdown Application (Entrusted Payment)

Attachment 2: Postal Savings Bank of China Corporate Loan Drawdown Application (Self-Payment)

Attachment 3: Drawdown Schedule

Attachment 4: Repayment Schedule

Attachment 5: ___/___

(No further text below)

(This page is the signature and seal page; no substantive text)

Borrower's Declaration: The Lender has presented the relevant clauses to us in accordance with the law (especially the clauses with bold headings or bold text), and has explained the concepts, content, and legal effects of the relevant clauses as requested by us. We have read and understood the above clauses.

Borrower (Seal): Shengfeng Logistics Group Co., Ltd. [SEAL]

Legal Representative/Person in Charge or Authorized Representative (Signature/Seal): XXX

Lender (Seal): Postal Savings Bank of China Co., Ltd. Fuzhou Branch [SEAL]

Legal Representative/Person in Charge or Authorized Representative (Signature/Seal): XXX

Date of Signing: XXX

Place of Signing: XXX

## Exhibit 8.1

**Exhibit 8.1**

Significant subsidiaries of Shengfeng Cayman and significant subsidiaries of Shengfeng Logistics, as that term is defined under Section 1-02 of Regulation S-X under the Securities Act, consist of the following entities:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct<br> or indirect** | **Principal activities** |
| **1** | Shengfeng Holding Limited ("Shengfeng HK") | Hong Kong | August 18, 2020 | 100% | Investment holding of Tianyu |
| **2** | Tianyu Shengfeng Logistics Group Co., Ltd. ("Tianyu", formerly known as "Fujian Tianyu Shengfeng Logistics Co., Ltd ") | Fujian, the PRC | December 16, 2020 | 100% | Investment holding of Shengfeng VIE |
| **3** | Singularity Digital Technology Co., Ltd. | Cayman Islands | September 12, 2025 | 100% | Software and technology consulting |
| **4** | Shengfeng (Viet Nam) International Supply Chain CO, Ltd. | Vietnam | November 26, 2025 | 100% | Transportation and warehouse storage management service |
|  | **VIE and VIE's subsidiaries:** |  |  |  |  |
| **5** | Shengfeng Logistics Group Co., Ltd. ("Shengfeng VIE" or "Shengfeng Logistics") | Fujian, the PRC | December 7, 2001 | 100% | Transportation and warehouse storage management service |
| **6** | Fuqing Shengfeng Logistics Co., Ltd. | Fujian, the PRC | April 15, 2011 | 100% | Transportation and warehouse storage management service |
| **7** | Xiamen Shengfeng Logistics Co., Ltd. | Fujian, the PRC | December 22, 2011 | 100% | Transportation and warehouse storage management service |
| **8** | Guangdong Shengfeng Logistics Co., Ltd. | Guangdong, the PRC | December 30, 2011 | 100% | Transportation and warehouse storage management service |
| **9** | Hainan Shengfeng Supply Chain Management Co., Ltd. | Hainan, the PRC | August 18, 2020 | 51% | Transportation and warehouse storage management service |
| **10** | Beijing Tianyushengfeng E-commerce Technology Co., Ltd. | Beijing, the PRC | January 9, 2004 | 100% | Transportation and warehouse storage management service |
| **11** | Beijing Shengfeng Supply Chain Management Co., Ltd. | Beijing, the PRC | April 13, 2016 | 100% | Transportation and warehouse storage management service |
| **12** | Shengfeng Logistics (Guizhou) Co., Ltd. | Guizhou, the PRC | August 15, 2017 | 100% | Transportation and warehouse storage management service |
| **13** | Shengfeng Logistics (Tianjin) Co., Ltd. | Tianjin, the PRC | March 8, 2016 | 100% | Transportation and warehouse storage management service |
| **14** | Shengfeng Logistics (Shandong) Co., Ltd. | Shandong, the PRC | March 15, 2016 | 100% | Transportation and warehouse storage management service |
| **15** | Shengfeng Logistics Hebei Co., Ltd. | Hebei, the PRC | February 17, 2016 | 100% | Transportation and warehouse storage management service |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct<br> or indirect** | **Principal activities** |
| **16** | Shengfeng Logistics (Henan) Co., Ltd. | Henan, the PRC | March 28, 2016 | 100% | Transportation and warehouse storage management service |
| **17** | Shengfeng Logistics (Liaoning) Co., Ltd. | Liaoning, the PRC | March 2, 2016 | 100% | Transportation and warehouse storage management service |
| **18** | Shengfeng Logistics (Yunnan) Co., Ltd. | Yunnan, the PRC | January 25, 2016 | 100% | Transportation and warehouse storage management service |
| **19** | Shengfeng Logistics (Guangxi) Co., Ltd. | Guangxi, the PRC | February 1, 2016 | 100% | Transportation and warehouse storage management service |
| **20** | Hubei Shengfeng Logistics Co., Ltd. | Hubei, the PRC | December 15, 2010 | 100% | Transportation and warehouse storage management service |
| **21** | Shengfeng Logistics Group (Shanghai) Supply Chain Management Co., Ltd. | Shanghai, the PRC | August 26, 2015 | 100% | Transportation and warehouse storage management service |
| **22** | Shanghai Shengxu Logistics Co., Ltd. | Shanghai, the PRC | June 4, 2003 | 100% | Transportation and warehouse storage management service |
| **23** | Hangzhou Shengfeng Logistics Co., Ltd. | Zhejiang, the PRC | June 10, 2010 | 100% | Transportation and warehouse storage management service |
| **24** | Nanjing Shengfeng Logistics Co., Ltd. | Jiangsu, the PRC | August 30, 2011 | 100% | Transportation and warehouse storage management service |
| **25** | Suzhou Shengfeng Logistics Co., Ltd. | Jiangsu, the PRC | January 14, 2005 | 90% | Transportation and warehouse storage management service |
| **26** | Suzhou Shengfeng Supply Chain Management Co., Ltd. | Jiangsu, the PRC | August 9, 2019 | 100% | Transportation and warehouse storage management service |
| **27** | Shengfeng Supply Chain Management Co., Ltd. | Fujian, the PRC | June 19, 2014 | 100% | Transportation and warehouse storage management service |
| **28** | Fuzhou Shengfeng Transportation Co., Ltd. | Fujian, the PRC | April 18, 2019 | 100% | Transportation and warehouse storage management service |
| **29** | Sichuan Shengfeng Logistics Co., Ltd. | Sichuan, the PRC | June 27, 2019 | 100% | Transportation and warehouse storage management service |
| **30** | Fujian Shengfeng Logistics Co., Ltd. | Fujian, the PRC | April 2, 2020 | 100% | Transportation and warehouse storage management service |
| **31** | Fujian Dafengche Information Technology Co. Ltd. | Fujian, the PRC | August 26, 2020 | 100% | Software engineering |
| **32** | Ningde Shengfeng Logistics Co. Ltd. | Fujian, the PRC | November 12, 2018 | 51% | Transportation and warehouse storage management service |
| **33** | Shengfeng Logistics (Zhejiang) Co., Ltd. | Zhejiang, the PRC | February 1, 2021 | 100% | Transportation and warehouse storage management service |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **No.** | **Name of subsidiaries** | **Place of<br> incorporation** | **Date of<br> incorporation<br> or acquisition** | **Percentage<br> of direct<br> or indirect** | **Principal activities** |
| **34** | Chengdu Shengfeng Supply Chain Management Co., Ltd. | Chengdu, the PRC | October 12, 2021 | 100% | Supply chain management service |
| **35** | Shengfeng Logistics Group (Ningde) Supply Chain Management Co., Ltd. | Fujian, the PRC | September 23, 2022 | 100% | Supply chain management service |
| **36** | Anhui Shengfeng Supply Chain Management Co., Ltd. | Anhui, the PRC | November 29, 2023 | 100% | Transportation and warehouse storage management service |
| **37** | Shenzhen Tianyu Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | May 19, 2023 | 100% | Transportation and supply chain management service |
| **38** | Ningbo Shengfeng Supply Chain Co., Ltd. | Zhejiang, the PRC | April 16, 2024 | 100% | Transportation and warehouse storage management service |
| **39** | Qingdao Shengfeng Supply Chain Co., Ltd. | Shandong, the PRC | April 22, 2024 | 100% | Transportation and warehouse storage management service |
| **40** | Zhongshan Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | May 15, 2024 | 100% | Transportation and warehouse storage management service |
| **41** | Hunan Shengfeng Supply Chain Management Co., Ltd. | Hunan, the PRC | May 23, 2024 | 100% | Transportation and warehouse storage management service |
| **42** | Jiangxi Shengfeng Supply Chain Management Co., Ltd. | Jiangxi, the PRC | May 24, 2024 | 100% | Transportation and warehouse storage management service |
| **43** | Dongguan Shengfeng Supply Chain Management Co., Ltd. | Guangdong, the PRC | July 7, 2024 | 100% | Transportation and warehouse storage management service |
| **44** | Langfang Shengfeng Logistics Co., Ltd | Hebei, the PRC | August 27, 2024 | 100% | Transportation and warehouse storage management service |
| **45** | Liaoning Tianyu Changsheng Supply Chain Management Co., Ltd. | Liaoning, the PRC | October 16, 2024 | 66% | Transportation and warehouse storage management service |
| **46** | Chongqing Tianyu Shengfeng Supply Chain Management Co., Ltd | Chongqin, the PRC | October 21, 2024 | 100% | Transportation and supply chain management service |
| **47** | Fujian Shengfeng Fulai Low Altitude Comprehensive Service Co., Ltd. | Fujian, the PRC | November 7, 2024 | 51% | Transportation and cargo packaging service |
| **48** | Fujian Shengfeng Zhuoyue Shipping Engineering Technology Co., Ltd. | Fujian, the PRC | December 9, 2024 | 51% | Technical services and development |
| **49** | Zhangzhou Shengfeng Logistics Co., Ltd. | Fujian, the PRC | May 14, 2025 | 100% | Transportation and warehouse storage management service |
| **50** | Luoyang Shengfeng Supply Chain Management Co., Ltd. | Luoyang, the PRC | August 1, 2025 | 100% | Transportation and warehouse storage management service |
| **51** | Heilongjiang Shengfeng Supply Chain Management Co., Ltd. | Heilongjiang, the PRC | September 26, 2025 | 100% | Transportation and warehouse storage management service |
|  | **Significant subsidiaries of Tianyu:** |  |  |  |  |
| **52** | Yichun Shengfeng Logistics Co., Ltd. | Jiangxi, the PRC | December 1, 2022 | 100% | Transportation and warehouse storage management service |
| **53** | Hubei Tianyu Shengfeng Logistics Co., Ltd | Hubei, the PRC | November 14, 2023 | 100% | Transportation and supply chain management service |

---

## Exhibit 11.2

**Exhibit 11.2**

**INSIDER TRADING COMPLIANCE MANUAL**

**Shengfeng Development Limited**

Adopted [●], 2026

In order to take on an active role in the prevention of insider trading violations by its officers, directors, employees, consultants, advisors, and other related individuals, the Board of Directors (the **"Board")** of Shengfeng Development Limited, an exempted company with limited liability incorporated under the laws of Cayman Islands (the **"Company"),** has adopted the policies and procedures described in this Insider Trading Compliance Manual.

I.  **<u>Adoption of Insider Trading Polic</u> y.** 

Effective as of the date written above, the Company has adopted the Insider Trading Policy (the **"Policy"),** which prohibits trading based on material, non-public information regarding the Company and its subsidiaries **("Inside Information").** The Policy covers all officers and directors of the Company and its subsidiaries, all other employees of the Company and its subsidiaries, all secretaries and assistants supporting such officers, directors, or employees and consultants or advisors to the Company or its subsidiaries who have or may have access to Inside Information and members of the immediate family or household of any such person. The Policy (and/or a summary thereof) is to be delivered to all new officers, directors, employees, consultants, advisors and related individuals who are within the categories of covered persons upon the commencement of their relationships with the Company, and is to be circulated to all covered personnel at least annually.

II.  **<u>Des</u> ig <u>nation of Certain Persons</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. **<u>Insiders</u>** Section 16 of the Securities Exchange Act of 1934, as amended (the **"Exchange Act"),** prohibits "short-swing" profits by all directors and executive officers of the Company, and any direct or indirect beneficial owner of 10% or more of any of the Company's equity security of any class (collectively, the **"Insiders")** and such Insiders, in addition to any beneficial owners of 5% or more of the Company's registered securities of any class, are subject to the reporting and liability provisions of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder (collectively, the **"Section 13(d) Individuals").** On December 18, 2025, the Holding Foreign Insiders Accountable Act (the "HFIA Act") was enacted, amending Section 16(a) of the Exchange Act to require every director and officer of a foreign private issuer ("FPI"), as defined in Exchange Act Rule 3b-4, with a class of equity securities registered pursuant to Section 12 of the Exchange Act to file Section 16 reports on Forms 3, 4, and 5. On February 27, 2026, the SEC adopted amendments to Exchange Act Rules 3a12-3(b) and 16a-2, and Forms 3, 4, and 5 to reflect the requirements of the HFIA Act. Accordingly, all directors and officers of the Company are now subject to the Section 16(a) reporting requirements, requiring the filing of Forms 3, 4, and 5. Directors and officers of the Company remain exempt from the short-swing profit recovery provisions of Section 16(b) and the short sale prohibition under Section 16(c). Beneficial owners of 10% or more of any class of the Company's equity securities registered under Section 12 of the Exchange Act remain entirely exempt from Section 16 under amended Rule 3a12-3(b) with respect to such securities. The filing deadlines for the Section 16(a) reports are (i) Form 3: within 10 calendar days after an individual becomes an officer or director, (ii) Form 4: within two business days of an officer or director's non-exempt change in stock ownership, and (iii) Form 5: within 45 days after the end of the fiscal year.

Under Sections 13(d) and 13(g) of the Exchange Act, and the U.S. Securities and Exchange Commission **("SEC")** related rules, subject to certain exemptions, any person who after acquiring, directly or indirectly the beneficial ownership of a certain class of equity securities, becomes, either directly or indirectly, the beneficial owner of more than 5% of such class must deliver a statement to the issuer of the security and to each exchange where the security is traded. Delivery to each exchange can be satisfied by making a filing on EDGAR (as defined below). In addition, Section 13(d) Individuals must file with the SEC a statement containing certain information, as well as any additional information that the SEC may deem necessary or appropriate in the public interest or for the protection of investors. Attached hereto as <u>Exhibit A</u> is a separate memorandum which discusses the relevant terms of Section 13.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. <u>Other Persons Sub</u>j<u>ect to Polic</u>y.** In addition, certain employees, consultants, and advisors of the Company as described in Section I above have, or are likely to have, from time to time access to Inside Information and together with the Insiders, are subject to the Policy.

**III.**  **<u>Appointment of Chief Compliance Officer</u>.** 

The Company has appointed Guoping Zheng as the Company's Chief Compliance Officer (the **"Compliance Officer").**

IV. <u>Duties of the Compliance Officer</u>.

The Compliance Officer has been designated by the Board to handle any and all matters relating to the Company's Insider Trading Compliance Program. Certain duties may be delegated to outside counsel with special expertise in securities issues and relevant law. The duties of the Compliance Officer shall include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Pre-clearing all transactions involving the Company's securities by the Insiders and those individuals having regular access to Inside Information, defined for these purposes to include all officers, directors, and employees of the Company and its subsidiaries and members of the immediate family or household of any such person, in order to determine compliance with the Policy, insider trading laws, Section 13 and Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended. Attached hereto as <u>Exhibit C</u> is a Pre-Clearance Checklist to assist the Compliance Officer in the performance of his or her duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Assisting in the preparation and filing of Section 13(d) reports for all Section 13(d) Individuals and Section 16(a) reports (Forms 3, 4, and 5) for all directors and officers of the Company, although the filings are their individual obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Serving as the designated recipient at the Company of copies of reports filed with the SEC by Section 13(d) Individuals under Section 13(d) of the Exchange Act and by directors and officers under Section 16(a) of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Performing periodic reviews of available materials, which may include Schedule 13D, Schedule 13G, Forms 3, 4, and 5, Form **144,** officers' and directors' questionnaires, as applicable, and reports received from the Company's stock administrator and transfer agent, to determine trading activity by officers, directors and others who have, or may have, access to Inside Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Circulating the Policy (and/or a summary thereof) to all covered employees, including the Insiders, on an annual basis, and providing the Policy and other appropriate materials to new officers, directors and others who have, or may have, access to Inside Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F. Assisting the Board in implementing the Policy and Sections I and II of this memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; G. Coordinating with Company counsel regarding all securities compliance matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; H. Retaining copies of all appropriate securities reports, and maintaining records of his or her activities as Compliance Officer.

**Shengfeng Development Limited**

**INSIDER TRADING POLICY**

and Guidelines with Respect to Certain Transactions in the Company's Securities

**SECTION I <br> APPLICABILITY OF POLICY**

This Policy applies to all transactions in the Company's securities, including ordinary shares, options and warrants to purchase ordinary shares, and any other securities the Company may issue from time to time, such as preferred shares, and convertible debentures, as well as derivative securities relating to the Company's shares, whether issued by the Company, such as exchange-traded options. It applies to all officers and directors of the Company, all other employees of the Company and its subsidiaries, all secretaries and assistants supporting such directors, officers, and employees, and consultants or advisors to the Company or its subsidiaries who have or may have access to Material Non-public Information (as defined below) regarding the Company and members of the immediate family or household of any such person. This group of people is sometimes referred to in this Policy as "Insiders." This Policy also applies to any person who receives Material Non-public Information from any Insider.

Any person who possesses Material Non-public Information regarding the Company is an Insider for so long as such information is not publicly known.

**SECTION II<br> DEFINITION OF MATERIAL NON-PUBLIC INFORMATION**

It is not possible to define all categories of material information. However, information should be regarded as "material" if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company's securities. Material information may be positive or negative. "Non-public Information" is information that has not been previously disclosed to the general public and is otherwise not available to the general public.

While it may be difficult to determine whether any particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information may include:

● Financial results;

● Entry into a material agreement or discussions regarding entry into a material agreement;

● Projections of future earnings or losses;

● Major contract awards, cancellations or write-offs;

● Joint ventures or commercial ventures with third parties;

● News of a pending or proposed merger or acquisition;

● News of the disposition of material assets;

● Impending bankruptcy or financial liquidity problems;

● Gain or loss of a significant line of credit;

● Significant breach of a material agreement;

● New business or services announcements of a significant nature;

● Share splits;

● New equity or debt offerings;

● Significant litigation exposure due to actual or threatened litigation;

● Changes in senior management or the Board;

● Capital investment plans; and

● Changes in dividend policy.

All of the foregoing categories of information and any similar information should be considered "Material Non-public Information" for purposes of this Policy. If **there are any questions regarding whether a particular item of information is Material Non-public Information, please consult the Compliance Officer or the Company's legal counsel before taking any action with respect to such information.**

**SECTION III<br> CERTAIN EXCEPTIONS**

For purposes of this Policy, the Company considers that the exercise of stock options under the Company's stock option plan (but <u>not</u> the sale of any such shares) is exempt from this Policy, since the other party to the transaction involving only the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan.

**SECTION IV<br> STATEMENT OF POLICY**

**<u>General Polic</u>y**

It is the policy of the Company to prohibit the unauthorized disclosure of any non-public information acquired in the workplace and the misuse of Material Non-public Information in securities trading.

**<u>Specific Policies</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. Trading on Material Non-public Information.** With certain exceptions, no officer or director of the Company, no employee of the Company or its subsidiaries and no consultant or advisor to the Company or any of its subsidiaries and no members of the immediate family or household of any such person, shall engage in any transaction involving a purchase or sale of the Company's securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Material Non-public Information concerning the Company, and ending at the close of business on the second Trading Day (as defined below) following the date of public disclosure of that information, or at such time as such non-public information is no longer material. However, see "Permitted Trading Period" below for a full discussion of trading pursuant to a pre-established plan or by delegation.

As used herein, the term "Trading Day" shall mean a day on which national stock exchanges are open for trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Timing.</u>** No Insider shall disclose **("tip")** Material Non-public Information to any other person (including family members) where such information may be used by such person to his or her profit by trading in the securities of companies to which such information relates, nor shall such Insider or related person make recommendations or express opinions on the basis of Material Non-public Information as to trading in the Company's securities.

Regulation FD (Fair Disclosure) **("Disclosure Regulation")** is an issuer disclosure rule implemented by the SEC that addresses selective disclosure. The Disclosure Regulation provides that when the Company, or person acting on its behalf, discloses Material Non-public information to certain enumerated persons (in general, securities market professionals and holders of the Company's securities who may well trade on the basis of the information), it must make public disclosure of that information. The timing of the required public disclosure depends on whether the selective disclosure was intentional or unintentional; for an intentional selective disclosure, the Company must make public disclosures simultaneously; for a non-intentional disclosure, the Company must make public disclosure promptly. Under the Disclosure Regulation, the required public disclosure may be made by filing or furnishing a Form 6-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.

It is the Company's policy that all communications with the press be handled through our Chief Executive Officer (CEO) or investor/public relations firm. Please refer all press, analyst or similar requests for information to the Company's CEO and do not respond to any inquiries without prior authorization from the Company's CEO. If the Company's CEO is unavailable, the Company's Chief Financial Officer will fill this role.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Confidentiality of Non-public Information</u>.** Non-public information relating to the Company is the property of the Company and the unauthorized disclosure of such information (including, without limitation, via email or by posting on Internet message boards or blogs, anonymously or otherwise) is strictly forbidden.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Dut</u>y <u>to Report Ina</u>pp<u>ropriate and Irregular Conduct</u>.** All employees, and particularly executives, managers and/or supervisors, have a responsibility for maintaining financial integrity within the Company, and being consistent with generally accepted accounting principles and both federal and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or irregularities, whether by witnessing the incident or being told of it, must report it to their immediate supervisor and to the chairman of the Company's Audit Committee of the Board (or to the Chairman of the Board, if an Audit Committee has not been established). For a more complete understanding of this issue, employees should consult their employee manual and or seek the advice of the Company's general counsel or outside counsel. Our outside securities counsel is Rimon P.C., attention: Charlotte Westfall, Esq. at (415) 869-7180, email charlotte.westfall@rimonlaw.com.

**SECTION V**

**POTENTIAL CRIMINAL AND CIVIL LIABILITY AND/OR DISCIPLINARY ACTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Liability for Insider Tradin</u>g.** Insiders may be subject to penalties of up to $5,000,000 and up to twenty (20) years in jail for engaging in transactions in the Company's securities at a time when they possess Material Non-public Information regarding the Company, regardless of whether such transactions were profitable. In addition, the SEC has the authority to seek a civil monetary penalty of up to three times the amount of profit gained or loss avoided by illegal insider trading. "Profit gained" or "loss avoided" generally means the difference between the purchase or sale price of the Company's shares and its value as measured by the trading price of the shares a reasonable period after public dissemination of the non-public information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Liabilit</u>y <u>for Tippin</u>g.** Insiders may also be liable for improper transactions by any person (commonly referred to as a **"tippee")** to whom they have disclosed Material Non-public Information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company's securities. The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority, Inc. use sophisticated electronic surveillance techniques to monitor *all trades* and uncover insider trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Possible Disciplinar</u>y <u>Actions</u>.** Individuals subject to the Policy who violate this Policy shall also be subject to disciplinary action by the Company, which may include suspension, forfeiture of perquisites and ineligibility for future participation in the Company's equity incentive plans and/or termination of employment.

**SECTION VI<br> PERMITTED TRADING PERIOD**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Black-Out Period and Trading Window</u>.**

To ensure compliance with this Policy and applicable federal and state securities laws, the Company requires that all officers, directors, employees, and all members of the immediate family or household of any such person refrain from conducting any transactions involving the purchase or sale of the Company's securities, other than during the period in any half year commencing at the close of business on the second Trading Day following the date of public disclosure of the financial results for the prior interim period or fiscal year and ending on the twenty-fifth day of the sixth month of the half year (the **"Trading Window").** Notwithstanding the foregoing, persons subject to this Policy may submit a request to the Company to purchase or sell the Company's securities outside the Trading Window on the basis that they do not possess any Material Non-public Information. The Compliance Officer shall review all such requests and may grant such requests on a case-by-case basis if he or she determines that the person making such request does not possess any Material Non-public Information at that time.

If such public disclosure occurs on a Trading Day before the markets close, then such date of disclosure shall be considered the first Trading Day following such public disclosure. For example, if such public disclosure occurs at 1:00 p.m. EST on June 10, then June 10 shall be considered the first Trading Day following such disclosure.

**Please be advised that these guidelines are merely estimates. The actual trading window may be different because the Company's interim report or annual report may be filed earlier or later**. The filing date of an interim report or annual report may fall on a weekend or the Company may delay filing an annual report due to an extension. Please check with the Compliance Officer to confirm whether the trading window is open.

The safest period for trading in the Company's securities, assuming the absence of Material Non-public Information, is generally the first ten Trading Days of the Trading Window. It is the Company's policy that the period when the Trading Window is "closed" is a particularly sensitive period of time for transactions in the Company's securities from the perspective of compliance with applicable securities laws. This is because the officers, directors and certain other employees are, as any half-year period progresses, increasingly likely to possess Material Non-public Information about the expected financial results for the period. The purpose of the Trading Window is to avoid any unlawful or improper transactions or even the appearance of any such transactions.

It should be noted that even during the Trading Window any person possessing Material Non-public Information concerning the Company shall not engage in any transactions involving the Company's securities until such information has been known publicly for at least two Trading Days. The Company has adopted the policy of delaying trading for "at least two Trading Days" because the securities laws require that the public be informed <u>effective</u>ly of previously undisclosed material information before Insiders trade in the Company's shares. Public disclosure may occur through a widely disseminated press release or through filings, such as Form 6-K, with the SEC. Furthermore, in order for the public to be effectively informed, the public must be given time to evaluate the information disclosed by the Company. Although the amount of time necessary for the public to evaluate the information may vary depending on the complexity of the information, generally two Trading Days is sufficient.

From time to time, the Company may also require that directors, officers, selected employees, and others suspend trading because of developments known to the Company and not yet disclosed to the public. In such event, such persons may not engage in any transaction involving the purchase or sale of the Company's securities during such period and may not disclose to others the fact of such suspension of trading.

Although the Company may from time to time require during a Trading Window that directors, officers, selected employees, and others suspend trading because of developments known to the Company and not yet disclosed to the public, ***each person is individually responsible at all times for compliance with the prohibitions against insider trading. Trading in the Company's securities during the Trading Window should <u>not</u> be considered a "safe harbor," and all directors, officers and other persons should use good judgment at all times.***

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Notwithstanding these general rules, Insiders may trade <u>outside</u> of the Trading Window provided that such trades are made pursuant to a pre-established plan or by delegation. These alternatives are discussed in the next section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. Trading According to a Pre-established Plan or by Delegation.

Trading which is not "on the basis of' Material Non-public Information may not give rise to insider trading liability. The SEC has adopted Rule 10b5-l under which insider trading liability can be avoided if Insiders follow very specific procedures. In general, such procedures involve trading according to pre-established instructions (a **"Pre-established Trade").**

Pre-established Trades must:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a) Be documented by a contract, written plan, or formal instruction which provides that the trade take place in the future.** For example, an Insider can contract to sell his or her shares on a specific date, or simply delegate such decisions to an investment manager, 40l(k) plan administrator or a similar third party. This documentation must be provided to the Compliance Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) Include in its documentation the specific amount, price and timing of the trade, or the formula for determining the amount, price and timing.** For example, the Insider can buy or sell shares in a specific amount and on a specific date each month, or according to a pre-established percentage (of the Insider's salary, for example) each time that the share price falls or rises to pre-established levels. In the case where trading decisions have been delegated, the specific amount, price and timing need <u>not</u> be provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) Include additional representation in its documentation for Directors and Officers.** If the person who entered into the pre-established contract, written plan, or formal instruction (discussed in Section VI.2(a) above) is a director or officer of the Company, such director or officer shall include a representation certifying that, on the date of adoption of the pre-established contract, plan, or instruction, (i) he or she is not aware of any material nonpublic information about the Company or its securities, and (ii) he or she is adopting the pre-established contract, plan, or instruction in good faith and not as part of a plan or scheme to evade prohibitions on inside trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) Be implemented at a time when the Insider does not possess Material Non-public Information and Upon the Expiration of a Cooling-Off Period.** As a practical matter, this means that the Insider may set up Pre-established Trades, or delegate trading discretion, <u>only.</u> during a "Trading Window" (discussed in Section VI.1 above); *provided that* (i) any director or officer of the Company may not conduct a Pre-established Trade until the expiration of a cooling-off period, consisting of the later of (A) 90 days after the adoption or modification of the pre-established contract, plan, or instruction, and (B) two business days following the disclosure of the Company's financial results in a Form 20-F or Form 6-K (but, in any event, this required cooling period is subject to a maximum of 120 days after adoption of the pre-established contract, plan, or instruction), and (ii) any other persons, who are covered by the Policy (as discussed in Section I above) and are not directors or officers, may not conduct a Pre-established Trade until the expiration of a cooling-off period that is 30 days after the adoption of the pre-established contract, plan, or instruction; and,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d) Remain beyond the scope of the Insider's influence after implementation.** In general, the Insider must allow the Pre-established Trade to be executed without changes to the accompanying instructions, and the Insider cannot later execute a hedge transaction that modifies the effect of the Pre-established Trade. An Insider wishing to change the amount, price or timing of a Pre-established Trade, or terminate a Pre-established Trade, can do so <u>only.</u> during a "Trading Window" (discussed in Section 1, above). If the Insider has delegated decision-making authority to a third party, the Insider cannot subsequently influence the third party in any way and such third party must not possess material non-public information at the time of any of the trades.

Prior to implementing a pre-established plan for trading, all officers and directors must receive the approval for such plan from the Compliance Officer. In addition, Insiders are generally prohibited from having more than one pre-established contract, plan, or instruction covering the same time period for open market purchase of sales of the Company's securities, unless one of the exceptions under 17 C.F.R 240.10b5- l (c)(1)(ii)(D) is met. Furthermore, Issuers are prohibited from entering into more than one pre-established contract, plan, or instruction, which is designed to effect open-market purchase or sale of the Company's securities as a single transaction, for any given 12-month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. <u>Pre-Clearance of Trades</u>.

Even during a Trading Window, all officers, directors, employees, as well as members of the immediate family or household of such individuals, must comply with the Company's "pre-clearance" process prior to trading in the Company's securities, implementing a pre-established plan for trading, or delegating decision-making authority over the Insider's trades. To do so, each officer and director must contact the Compliance Officer prior to initiating any of these actions. Trades executed pursuant to a properly implemented Pre-Established Trade approved by the Compliance Officer do not need to be pre-cleared. The Company may also find it necessary, from time to time, to require compliance with the pre-clearance process from certain individuals other than those mentioned above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **4. <u>Individual Responsibilit</u>y.**

As Insiders, every person subject to this Policy has the individual responsibility to comply with this Policy against insider trading, regardless of whether the Company has established a Trading Window applicable to that Insider or any other Insiders of the Company. Each individual, and not necessarily the Company, is responsible for his or her own actions and will be individually responsible for the consequences of their actions. Therefore, appropriate judgment, diligence and caution should be exercised in connection with any trade in the Company's securities. An Insider may, from time to time, have to forego a proposed transaction in the Company's securities even if he or she planned to make the transaction before learning of the Material Non-public Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **5. <u>Exceptions to the Polic</u>y.**

Any exceptions to this Policy may only be made by advance written approval of each of: (i) the CEO, (ii) the Compliance Officer and (iii) the Chairman of the Audit Committee of the Board (or the Chairman of the Board if an Audit Committee has not been established). Any such exceptions shall be immediately reported to the remaining members of the Board.

**SECTION VII**

**APPLICABILITY OF POLICY TO INSIDE INFORMATION REGARDING OTHER COMPANIES**

This Policy and the guidelines described herein also apply to Material Non-public Information relating to other companies, including the Company's customers, vendors or suppliers or potential acquisition targets **("business partners"),** when that information is obtained in the course of employment or performance of other services on behalf of the Company. Civil and criminal penalties, as well as the termination of employment, may result from trading on inside information regarding the Company's business partners. All employees should treat Material Non-public Information about the Company's business partners with the same care as is required with respect to the information relating directly to the Company.

**SECTION VIII**

**PROHIBITION AGAINST BUYING AND SELLING <br> COMPANY ORDINARY SHARES WITHIN A SIX-MONTH PERIOD**

**Insiders**

Generally, purchases and sales (or sales and purchases) of Company ordinary shares occurring within any six-month period in which a mathematical profit is realized result in illegal "short-swing profits". The prohibition against short-swing profits is found in Section 16 of the Exchange Act. Section 16 was drafted as a rather arbitrary prohibition against profitable "insider trading" in a company's securities within any six-month period regardless of the presence or absence of Material Non-public Information that may affect the market price of those securities. Each executive officer, director and 10% or greater shareholder of the Company is subject to the prohibition against short-swing profits under Section 16. The measure of damages is the profit computed from any purchase and sale or any sale and purchase within the short-swing (i.e., six-month) period, without regard to any setoffs for losses, any first-in or first-out rules, or the identity of the ordinary shares. This approach sometimes has been called the "lowest price in, highest price out" rule and can result in a realization of "profits" for Section 16 purposes even when the Insider has suffered a net loss on his or her trades. Under the Holding Foreign Insiders Accountable Act (the "HFIA Act"), enacted on December 18, 2025, and the SEC's February 27, 2026 amendments to Exchange Act Rules 3a12-3(b) and 16a-2, directors and officers of the Company are now subject to Section 16(a) reporting requirements (Forms 3, 4, and 5). However, directors and officers of the Company remain exempt from the short-swing profit recovery provisions of Section 16(b) and the short sale prohibition under Section 16(c). Beneficial owners of 10% or more of any class of the Company's equity securities registered under Section 12 of the Exchange Act remain entirely exempt from Section 16 under amended Rule 3a12-3(b) with respect to such securities.

**SECTION IX <br> INQUIRIES**

Please direct your questions as to any of the matters discussed in this Policy to the Compliance Officer.

<u>Exhibit A</u>

**Section 13 Memorandum**

**To: All Officers, Directors and 5% or greater Shareholders ("Insider")**

**Re: Overview of Section 13 Under the Exchange Act of 1934, as amended**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **A. <u>Introduction</u>.**

This Memorandum provides an overview of Section 13 of the Exchange Act of 1934, as amended (the **"Exchange Act"),** and the related rules promulgated by the SEC.

***Each executive officer, director and* 5% *or greater shareholder (commonly called an "Insider") of Shengfeng Development Limited (the "Company") is personally responsible for complying with the provisions of Section 13, and failure by an Insider to comply strictly with his or her reporting requirements will result in an obligation by the Company to publicly disclose such failure.*** Moreover, Congress has granted the SEC authority to seek monetary court-imposed fines on Insiders who fail to timely comply with their reporting obligations.

Under Section 13 of the Exchange Act, reports made to the SEC are filed on Schedule 13D, Schedule 130, Form 13F, and Form 13H. A securities firm (and, in some cases, its parent company or other control persons) generally will have a Section 13 reporting obligation if the firm directly or indirectly:

● beneficially owns, in the aggregate, more than 5% of a class of the voting, equity securities (the **"Section 13(d) Securities"):** 

● registered under Section 12 of the Exchange Act,

● issued by any closed-end investment company registered under the Investment Company Act of 1940, as amended (the **"Investment Company Act"),** or

● issued by any insurance company that would have been required to register its securities under Section 12 of the Exchange Act but for the exemption under Section 12(g)(2)(0) thereof (see Schedules 13D and 130: Reporting Significant Acquisition and Ownership Positions below);

● manages discretionary accounts that, in the aggregate, hold equity securities trading on a national securities exchange with an aggregate fair market value of $100 million or more; or

● manages discretionary accounts that, in the aggregate, purchase or sell any NMS securities (generally exchange-listed equity securities and standardized options) in an aggregate amount equal to or greater than (i) 2 million shares or shares with a fair market value of over $20 million during a day, or (ii) 20 million shares or shares with a fair market value of over $200 million during a calendar month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B. <u>Reportin</u>g <u>Requirements Under Section 13(d) and 13</u>(g).**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. *<u>General</u>.*** Sections 13(d) and l 3(g) of the Exchange Act require any person or group of persons<sup>1</sup> who directly or indirectly acquires or has beneficial ownership<sup>2</sup> of more than 5% of a class of an issuer's Section l3(d) Securities (the **"5% threshold")** to report such beneficial ownership on Schedule 13D or Schedule 13G, as appropriate. Both Schedule 13D and Schedule 13G require background information about the reporting persons and the Section 13(d) Securities listed on the schedule, including the name, address, and citizenship or place of organization of each reporting person, the amount of the securities beneficially owned and aggregate beneficial ownership percentage, and whether voting and investment power is held solely by the reporting persons or shared with others. Reporting persons that must report on Schedule 13D are also required to disclose a significant amount of additional information, including certain disciplinary events, the source and amount of funds or other consideration used to purchase the Section 13(d) Securities, the purpose of the acquisition, any plans to change or influence the control of the issuer, and a list of any transactions in the securities effected in the last 60 days. A reporting person may use the less burdensome Schedule 13G if it meets certain criteria described below.

In general, Schedule 13G is available to any reporting person that falls within one of the following three categories:

● *Exempt Investors.* A reporting person is an "Exempt Investor" if the reporting person beneficially owns more than 5% of a class of an issuer's Section 13(d) Securities at the end of a calendar year, but its acquisition of the securities is exempt under Section 13(d)(6) of the Exchange Act. For example, a person that acquired all of its Section 13(d) Securities prior to the issuer's registration of such securities (or class of securities) under the Exchange Act, or acquired no more than 2% of the Section 13(d) Securities within a 12-month period, is considered to be an Exempt Investor and would be eligible to file reports on Schedule 13G.

<sup>1</sup> A "group" is defined in Rule 13d-5 as "two or more persons [that] agree to act together for the purpose of acquiring, holding, voting or disposing of equity securities of an issuer." See, for example, the persons described above in Reporting Obligations of "Control Persons". An agreement to act together does not need to be in writing and may be inferred by the SEC or a court from the concerted actions or common objective of the group members.

<sup>2</sup> Under Rule 13d-3, "beneficial ownership" of a security exists if a person, directly or indirectly, through any contract, arrangement, understanding, or relationship or otherwise, has or shares voting power and/or investment power over a security. "Voting power" means the power to vote or direct the voting of a security. "Investment power" means the power to dispose of or direct the disposition of a security. Under current SEC rules, a person holding securities-based swaps or other derivative contracts may be deemed to beneficially own the underlying securities if the swap or derivative contract provides the holder with voting or investment power over the underlying securities. Please contact us if you would like guidance regarding the application of Section 13 to securities-based swaps or other derivative contracts.

● *Qualified Institutions.* Along with certain other institutions listed under the Exchange Act <sup>3</sup> , a reporting person that is a registered investment adviser or broker-dealer may file a Schedule 13G as a "Qualified Institution" if it (a) acquired its position in a class of an issuer's Section 13(d) Securities in the ordinary course of its business, (b) did not acquire such securities with the purpose or effect of changing or influencing control of the issuer, nor in connection with any transaction with such purpose or effect (such purpose or effect, an **"activist intent"),** and (c) promptly notifies any discretionary account owner on whose behalf the firm holds more than 5% of the Section 13(d) Securities of such account owner's potential reporting obligation.

● *Passive Investors.* A reporting person is a "Passive Investor" if it beneficially owns more than 5% but less than 20% of a class of an issuer's Section 13(d) Securities and (a) the securities were not acquired or held with an activist intent, and (b) the securities were not acquired in connection with any transaction having an activist intent. There is no requirement that a Passive Investor limit its acquisition of Section 13(d) Securities to purchases made in the ordinary course of its business. In addition, a Passive Investor does not have an obligation to notify discretionary account owners on whose behalf the firm holds more than 5% of such Section 13(d) Securities of such account owner's potential reporting obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **2. *<u>Method</u>****<u>o</u>f **<u>Filin</u>g.***

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) An Insider must file Section 13 schedules in electronic format via the Commission's Electronic Data Gathering Analysis and Retrieval System **("EDGAR")** in accordance with EDGAR rules set forth in Regulation S-T.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Filing Date</u>. Schedules are deemed filed with the SEC or the applicable exchange on the date recognized by EDGAR. For Section 13 purposes, filings may be made up to 10 p.m. EST. In the event that a due date falls on a weekend or SEC holiday, the filing will be deemed timely filed if it is filed on EDGAR by the next business day after such weekend or holiday. An Insider must first obtain several different identification codes from the SEC before the filings can be submitted. In order to receive such filing codes, the Insider first submits a Form ID to the SEC. The Form ID must be signed, notarized, and submitted electronically through the SEC's Filer Management website, which can be accessed at https://www.filermanagement.edgarfiling.sec.gov. The Insider is required to retain a manually signed hard copy of all EDGAR filings (and related documents like powers of attorney) in its records available for SEC inspection for a period of five years after the date of filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Compan</u>y. In addition, the rules under Section 13 require that a copy of the applicable filing be sent to the issuer of the security at its principal executive office by registered or certified mail. A copy of Schedules filed pursuant to §§ 240.13d-l(a) and 240.13d-2(a) shall also be sent to each national securities exchange where the security is traded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Securities to be Reported</u>. A person who is subject to Section 13 must only report as beneficially owned those securities in which he or she has a pecuniary interest. See the discussion of "beneficial ownership" below at Section D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. *<u>Initial Report o</u>f <u>Ownership</u>*** <u>- ***Schedule 13D or 13G***</u>*.*** Under Section 13, Insiders are required to make an initial report on Schedule 13D or Schedule 13G to the SEC of their holdings of all equity securities of the corporation (whether or not such equity securities are registered under the Exchange Act). This would include all traditional types of securities, such as ordinary shares, preferred shares and junior shares, as well as all types of derivative securities, such as warrants to purchase shares, options to purchase shares, puts and calls. Even Insiders who do not beneficially own any equity securities of the Company must file a report to that effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Initial Filing Deadline</u>. An Insider who is not eligible to use Schedule 13G must file a Schedule 13D within five business days of such reporting person's direct or indirect acquisition of beneficial ownership of more than 5% of a class of an issuer's Section 13(d) Securities.

● A reporting person that is an Exempt Investor is required to file its initial Schedule 13G within 45 days of the end of the calendar quarter in which the person exceeds the 5% threshold.

● A reporting person that is a Qualified Institution also is required to file its initial Schedule 13G within 45 days of the end of the calendar quarter in which the person exceeds the 5% threshold. Since the 5% threshold for a Qualified Institution is calculated as of the end of a calendar quarter, a Qualified Institution that acquires directly or indirectly more than 5% of a class of an issuer's Section 13(d) Securities during a calendar quarter, but as of the end of such quarter has reduced its interest below the 5% threshold, will not be required to file an initial Schedule 13G. However, a Qualified Institution that acquires direct or indirect beneficial ownership of more than 10% of a class of an issuer's Section 13(d) Securities must file an initial Schedule 13G within five business days after the date on which the person exceeds the 10% threshold.

● A reporting person that is a Passive Investor must file its initial Schedule 13G within five business days of the date on which it exceeds the 5% threshold.

<sup>3</sup> Under Rule 13d-l, a reporting person also qualifies as a Qualified Institution if it is a bank as defined in Section 3(a)(6) of the Exchange Act, an insurance company as defined in Section 3(a)(19) of the Exchange Act, an investment company registered under the Investment Company Act, or an employee benefit plan, savings association, or church plan. The term "Qualified Institution" also includes a non-US. institution that is the functional equivalent of any of the foregoing entities and the control persons and parent holding companies of an entity that qualifies as a Qualified Institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Switching from Schedule 13G to Schedule 13D</u>. If an Insider that previously filed a Schedule 13G no longer satisfies the conditions to be an Exempt Investor, Qualified Institution, or Passive Investor, the person must switch to reporting its beneficial ownership of a class of an issuer's Section 13(d) Securities on a Schedule 13D (assuming that the person continues to exceed the 5% threshold). This could occur in the case of (1) an Insider that changes from acquiring or holding Section 13(d) Securities for passive investment to acquiring or holding such securities with an activist intent, (2) an Insider that is a Qualified Institution that deregisters as an investment adviser pursuant to an exemption under the Investment Advisers Act of 1940, as amended, or applicable state law, or (3) an Insider that is a Passive Investor that acquires 20% or more of a class of an issuer's Section 13(d) Securities. In each case, the Insider must file a Schedule 13D within five business days of the event that caused it to no longer satisfy the necessary conditions (except that, if a former Qualified Institution is able to qualify as a Passive Investor, such person may simply amend its Schedule 13G within five business days to switch its status).

An Insider who is required to switch to reporting on a Schedule 13D will be subject to a "cooling off" period from the date of the event giving rise to a Schedule 13D obligation (such as the change to an activist intent or acquiring 20% of a class of an issuer's Section 13(d) Securities) until 10 calendar days after the filing of Schedule 13D. During the "cooling off" period, the reporting person may not vote or direct the voting of the Section 13(d) Securities or acquire additional beneficial ownership of such securities. Consequently, a person should file a Schedule 13D as soon as possible once he is obligated to switch from a Schedule 13G to reduce the duration of the "cooling off" period.

The Insider will thereafter be subject to the Schedule 13D reporting requirements with respect to the Section 13(d) Securities until such time as the former Schedule 13G reporting person once again qualifies as a Qualified Institution or Passive Investor with respect to the Section 13(d) Securities or has reduced its beneficial ownership interest below the 5% threshold. However, only a reporting person that was originally eligible to file a Schedule 13G and was later required to file a Schedule 13D may switch to reporting on Schedule 13G.<sup>4</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **4. *<u>Changes in Ownership -Amendments to Schedule 13D or 13G</u>.***

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*Amendments to Schedule 13D.* If there has been any material change to the information in a Schedule 13D previously filed by an Insider<sup>5</sup>, the person must file an amendment to such Schedule 13D within two business days of such material change. A material change includes, without limitation, a reporting person's acquisition or disposition of 1% or more of a class of the issuer's Section 13(d) Securities, including as a result of an issuer's repurchase of its securities. An acquisition or disposition of less than 1% may be considered a material change depending on the circumstances. A disposition that reduces a reporting person's beneficial ownership interest below the 5% threshold, but is less than a 1% reduction, is not necessarily a material change that triggers an amendment to Schedule 13D. However, an amendment in such a circumstance is recommended to eliminate the reporting person's filing obligations if the reporting person does not in the near term again expect to increase its ownership above 5%.

*Amendments to Schedule 13G.*

 

● **Annual.** If a reporting person previously filed a Schedule 13G and there has been any change to the information reported in such Schedule 13G as of the end of a calendar quarter, then an amendment to such Schedule 13G must be filed within 45 days of the calendar quarter end. A reporting person is not required to make a quarterly amendment to Schedule 13G if there has been no change since the previously filed Schedule 13G or if the only change results from a change in the person's ownership percentage as a result of a change in the aggregate number of Section 13(d) Securities outstanding (e.g., due to an issuer's repurchase of its securities).

● **Other than Quarterly (Qualified Institutions).** A reporting person that previously filed a Schedule 13G as a Qualified Institution reporting beneficial ownership of less than 10% of a class of an issuer's Section 13(d) Securities, must file an amendment to its Schedule 13G within five business days of the date such Qualified Institution is the direct or indirect beneficial owner of more than 10% of a class of the issuer's Section 13(d) Securities. Thereafter, within five business days of the date on which the person's direct or indirect beneficial ownership of such securities increases or decreases by more than 5% of the class of securities, the person must file an amendment to Schedule 13G.

● **Other than Quarterly (Passive Investors).** A reporting person that previously filed a Schedule 13G as a Passive Investor must file an amendment within five business days of the date it directly or indirectly acquires more than 10% of a class of an issuer's Section 13(d) Securities. Thereafter, the reporting person must file an amendment to Schedule 13G within five business days of the date its direct or indirect beneficial ownership of such securities increases or decreases by more than 5%.

<sup>4</sup> See Question 103.07 (September 14, 2009), Regulation 13D-G C&Dls.

<sup>5</sup> This includes a change in the previously reported ownership percentage of a reporting person even if such change results solely from an increase or decrease in the aggregate number of outstanding securities of the issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**S. *Reporting Identifying Information for Large Traders*** - ***Form 13H.*** Rule 13h-l of the Exchange Act requires a Form 13H to be filed with the SEC by any individual or entity (each, a **"Large Trader")** that, directly or indirectly, exercises investment discretion over one or more accounts and effects transactions in NMS Securities (as defined below) for those accounts through one or more registered broker-dealers that, in the aggregate, equal or exceed (a) 2 million shares or $20 million in fair market value during any calendar day, or (b) 20 million shares or $200 million in fair market value during any calendar month (each, an **"identifying activity level").** Under Regulation NMS, an "NMS Security" is defined to include any U.S. exchange-listed equity securities and any standardized options, but does not include any exchange-listed debt securities, securities futures, or shares of open-end mutual funds that are not currently reported pursuant to an effective transaction reporting plan under the Exchange Act. A Large Trader must file an initial Form 13H promptly after effecting aggregate transactions equal to or greater than one of the identifying activity levels. The SEC has indicated that filing within 10 days will be deemed a prompt filing. Amendments to Form 13H must be filed within 45 days after the end of each full calendar year and then promptly following the end of a calendar quarter if any of the information on Form 13H becomes inaccurate.

Form 13H requires that a Large Trader, reporting for itself and for any affiliate that exercises investment discretion over NMS securities, list the broker-dealers at which the Large Trader and its affiliates have accounts and designate each broker-dealer as a "prime broker," an "executing broker," and/or a "clearing broker." Form 13H filings with the SEC are confidential and exempt from disclosure under the United States Freedom of Information Act. The information is, however, subject to disclosure to Congress and other federal agencies and when ordered by a court. If a securities firm has multiple affiliates in its organization that qualify as Large Traders, Rule 13h-l permits the Large Traders to delegate their reporting obligation to a control person that would file a consolidated Form 13H for all of the Large Traders it controls. Otherwise, each Large Trader in the organization will be required to file a separate Form 13H.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6. <u>Reporting Obl</u>ig<u>ations o</u>f <u>Control Persons and Clients</u>.

 ****

*The Firms Obligations.* As discussed above, a securities firm is deemed to be the beneficial owner of Section 13(d) Securities in all accounts over which it exercises voting and/or investment power. Therefore, a firm will be a reporting person if it directly or indirectly acquires or has beneficial ownership of more than 5% of a class of an issuer's Section 13(d) Securities. Unless a securities firm has an activist intent with respect to the issuer of the Section 13(d) Securities, the firm generally will be able to report on Schedule 13G as either a Qualified Institution or as a Passive Investor.

*Obligations of a Firms Control Persons.* Any control person (as defined below) of a securities firm, by virtue of its ability to direct the voting and/or investment power exercised by the firm, may be considered an indirect beneficial owner of the Section 13(d) Securities. Consequently, the direct or indirect control persons of a securities firm may also be reporting persons with respect to a class of an issuer's Section 13(d) Securities. The following persons are likely to be considered "control persons" of a firm:

● any general partner, managing member, trustee, or controlling shareholder of the firm; and

● the direct or indirect parent company of the firm and any other person that indirectly controls the firm (e.g., a general partner, managing member, trustee, or controlling shareholder of the direct or indirect parent company).

If a securities firm (or parent company) is directly or indirectly owned by two partners, members, trustees, or shareholders, generally each such partner, member, trustee, or shareholder is deemed to be a control person. For example, if a private fund that beneficially owns more than 5% of a class of an issuer's Section 13(d) Securities is managed by a securities firm that is a limited partnership, the general partner of which is a limited liability company that in turn is owned in roughly equal proportions by two managing members, then each of the private fund, the securities firm, the firm's general partner, and the two managing members of the general partner likely will have an independent Section 13 reporting obligation.

*Availability of Filing on Schedule 13G by Control Persons.* Any direct and indirect control person of a securities firm may file a Schedule 13G as an Exempt Investor, a Qualified Institution or as a Passive Investor to the same extent as any other reporting person as described above. In order for a control person to file a Schedule 13G as a Qualified Institution, however, no more than 1% of a class of an issuer's Section 13(d) Securities may be held (i) directly by the control person or (ii) directly or indirectly by any of its subsidiaries or affiliates that are not Qualified Institutions. For example, a direct or indirect control person of a securities firm will not qualify as a Qualified Institution if more than 1% of a class of an issuer's Section 13(d) Securities is held by a private fund managed by the firm or other affiliate because a private fund is not among the institutions listed as a Qualified Institution under the Exchange Act.

A securities firm that has one of its control persons serving on an issuer's board of directors may not be eligible to qualify as a Passive Investor with respect to such issuer. Even though the securities firm may not otherwise have an activist intent, the staff of the SEC has stated "the fact that officers and directors have the ability to directly or indirectly influence the management and policies of an issuer will generally render officers and directors unable to certify to the requirements" necessary to file as a Passive Investor.<sup>6</sup>

*Obligations of a Firms Clients.* If a client of a securities finn (including a private or registered fund or a separate account client) by itself beneficially owns more than 5% of a class of an issuer's Section 13(d) Securities, the client has its own independent Section 13 reporting obligation.

*Availability of Joint Filings by Reporting Persons.* As discussed above, each reporting person has an independent reporting obligation under Section 13 of the Exchange Act. The direct and indirect beneficial owners of the same Section 13(d) Securities may satisfy their reporting obligations by making a joint Schedule 13D or Schedule 13G filing, provided that:

● each reporting person is eligible to file on the Schedule used to make the Section 13 report (e.g., each person filing on a Schedule 13G is a Qualified Institution, Exempt Investor, or Passive Investor);

● each reporting person is responsible for the timely filing of the Schedule 13D or Schedule 13G and for the completeness and accuracy of its information in such filing <sup>7</sup> ; and

● the Schedule 13D or Schedule 13G filed with the SEC (i) contains all of the required information with respect to each reporting person; (ii) is signed by each reporting person in his, her, or its individual capacity (including through a power of attorney); and (iii) has a joint filing agreement attached.

**C. <u>Determinin</u>g <u>Beneficial Ownershi</u>p.**

In determining whether a securities firm has crossed the 5% threshold with respect to a class of an issuer's Section 13(d) Securities<sup>8</sup>, it must include the positions held in any proprietary accounts and the positions held in all discretionary client accounts that it manages (including any private or registered funds, accounts managed by or for principals and employees, and accounts managed for no compensation), and positions held in any accounts managed by the firm's control persons (which may include certain officers and directors) for themselves, their spouses, and dependent children (including IRA and most trust accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. Determining Who is a Five Percent Holder.** Beneficial ownership in the Section 13 context is detennined by reference to Rule 13d-3, which provides that a person is the beneficial owner of securities if that person has or shares voting or disposition power with respect to such securities, or can acquire such power within 60 days through the exercise or conversion of derivative securities.

<sup>6</sup> See Question 103.04 (September 14, 2009), Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting Compliance and Disclosure Interpretations of the Division of Corporation Finance of the SEC (the "Regulation 13D-G C&Dls").

<sup>7</sup> If the reporting persons are eligible to file jointly on Schedule 13G under separate categories (e.g., a private fund as a Passive Investor and its control persons as Qualified Institutions), then the reporting persons must comply with the earliest filing deadlines applicable to the group in filing any joint Schedule 13G. In the example above, the reporting persons would be required to file a Schedule 13G initially within five business days of exceeding the 5% threshold and thereafter within five business days of any transaction triggering an amendment (i.e., the filing deadlines applicable to a Passive Investor) and not the later deadlines applicable to a Qualified Institution.

<sup>8</sup> In calculating the 5% test, a person is permitted to rely upon the issuer's most recent interim or annual report for purposes of determining the amount of outstanding voting securities of the issuer, unless the person knows or has reason to believe that such information is inaccurate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. *<u>Determining Beneficial Ownership for Reporting and Short-Swing Profit Liability</u>.*** For all Section 13 purposes other than determining who is a five percent holder, beneficial ownership means a direct or indirect pecuniary interest in the subject securities through any contract, arrangement, understanding, relationship or otherwise. "Pecuniary interest" means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the subject securities. Discussed below are several of the situations that may give rise to an indirect pecuniary interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Fami</u>ly <u>Holdin</u>gs. An Insider is deemed to have an indirect pecuniary interest in securities held by members of the Insider's immediate family sharing the same household. Immediate family includes grandparents, parents (and step-parents), spouses, siblings, children (and step-children) and grandchildren, as well as parents-in-laws, siblings-in-laws, children-in-law and all adoptive relationships. An Insider may disclaim beneficial ownership of shares held by members of his or her immediate family, but the burden of proof will be on the Insider to uphold the lack of a pecuniary interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Partnership Holdin</u>gs. Beneficial ownership of a partnership's securities is attributed to the general partner of a limited partnership in proportion of such person's partnership interest. Such interest is measured by the greater of the general partner's share of partnership profits or of the general partner's capital account (including any limited partnership interest held by the general partner).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Corporate Holdin</u>gs. Beneficial ownership of securities held by a corporation will not be attributed to its shareholders who are not controlling shareholders and who do not have or share investment control over the corporation's portfolio securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Derivative Securities</u>. Ownership of derivative securities (warrants, share appreciation rights, convertible securities, options and the like) is treated as indirect ownership of the underlying equity securities. Acquisition of derivative securities must be reported. If the derivative securities are acquired pursuant to an employee plan, the timing of such reporting depends upon the Rule l 6b-3 status of the employee plan under which the grant was made.

**D** **. Delinquent Filings.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. *<u>Correcting Late Filin</u>gs.*** In the case of an Insider that has failed to make required amendments to its Schedule 13D or Schedule 13G in a timely manner (i.e., any material changes), the Insider must immediately amend its schedule to disclose the required information. The SEC Staff has explained that, "[r]egardless of the approach taken, the security holder must ensure that the filings contain the information that it should have disclosed in each required amendment, including the dates and details of each event that necessitated a required amendment." However, the SEC Staff has also affirmed that, irrespective of whether a security holder takes any of these actions, a security holder may still face liability under the federal securities laws for failing to promptly file a required amendment to a Schedule 13D or Schedule 13G.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. *<u>Potential Liabili</u>ty.*** The SEC may bring an enforcement action, in the context of a Schedule 13D or Schedule 13G filing, for violations of Section 13(d), Section 13(g), Rule l0b-5 and Section l0(b), provided that the SEC specifically shows: (1) a material misrepresentation or omission made by the defendant; (2) scienter on the part of the defendant; and (3) a connection between a misrepresentation or omission and purchase or sale of a security regarding the Rule 10b-5 claim it brings. The SEC may seek civil remedies in the form of injunctive relief, a cease-and-desist order, monetary penalties, and other forms of equitable relief (e.g., disgorgement of profits). Under Section 32 of the Exchange Act, criminal sanctions may also extend to the willful violation of Section 13(d) and Section 13(g). The U.S. Department of Justice, which prosecutes criminal offenses under the Exchange Act, may seek numerous penalties against any person that violates the Exchange Act and any rules thereunder, including a monetary fine of up to

$5,000,000, imprisonment for up to 20 years and/or disgorgement.

<u>Exhibit B</u>

**Shengfeng Development Limited**

**INSIDER TRADING COMPLIANCE PROGRAM** - **PRE-CLEARANCE CHECKLIST**

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| |
|:---|
| Individual Proposing to Trade: |
| Number of Shares covered by Proposed Trade: |
| Date: |

---

☐ <u>Trading Window</u>. Confirm that the trade will be made during the Company's "trading window."

☐ <u>Section 13 and Section 16 Compliance</u>. Confirm, if the individual is subject to Section 13 and/or Section 16, that the proposed trade will not give rise to any potential liability under Section 13 as a result of matched past (or intended future) transactions. Also, ensure that an amendment to Schedule 13D or 13G has been or will be completed and will be timely filed. For directors and officers, ensure that Forms 3, 4, or 5, as applicable, have been or will be timely filed. Note that directors and officers of the Company remain exempt from Section 16(b) short-swing profit rules and Section 16(c) short sale prohibition.

☐ <u>Prohibited Trades</u>. Confirm, if the individual is subject to Section 13, that the proposed transaction is not a prohibited or strongly discouraged transaction. Note that directors and officers of the Company remain exempt from Section 16(c) short sale prohibition.

☐ <u>Rule 144 Compliance</u>. Confirm that:

☐ Current public information requirement has been met;

☐ Shares are not restricted or, if restricted, the six-month holding period has been met;

☐ Volume limitations are not exceeded (confirm that the individual is not part of an aggregated group); □ The manner of sale requirements has been met; and

☐ The Notice of Form 144 Sale has been completed and filed.

☐ <u>Rule 10b-5 Concerns</u>. Confirm that (i) the individual has been reminded that trading is prohibited when in possession of any material information regarding the Company that has not been adequately disclosed to the public, and (ii) the Compliance Officer has discussed with the individual any information known to the individual or the Compliance Officer which might be considered material, so that the individual has made an informed judgment as to the presence of inside information.

  <br> Signature of Compliance Officer

**Transactions Report**

Officer or Director:  

I. TRANSACTIONS:

☐ No transactions. ☐ The transactions described below.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Owner of Record** | **Transaction Date (I)** | **Transaction<br> Code <2)** | **Security<br> (Common,<br> Preferred)** | **Number of<br> Securities<br> Acquired** | **Number of<br> Securities<br> Disposed of** | **Purchase/<br> Sale Unit<br> Price** |

---

(1) (a) Brokerage transactions - trade date (d) Acquisitions under stock bonus plan - date of grant

(b) Other purchases and sales - date firm commitment is made (e) Conversion - date of surrender of convertible security

(c) Option and SAR exercises - date of exercise (f) Gifts - date on which gift is made

(2) Transaction Codes:

(P) Pre-established Purchase or Sale (Q) Transfer pursuant to marital settlement

(N) Purchase or Sale (not "Pre-established") (U) Tender of shares

(G) Gift (W) Acquisition or disposition of will

(M) Option exercise (in-the-money option) (J) Other acquisition
or disposition (specify)

II. SECURITIES OWNERSHIP FOLLOWING TRANSACTION

&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Compan</u> y <u>Securities Direct</u> ly <u>or Indirect</u> ly <u>Owned (other than stock options noted below</u>):

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| | | | |
|:---|:---|:---|:---|
| **Title of Security *(e.g.,*<br> Preferred, Common, etc.)** | **Number of Shares/Units** | **Record Holder (if not<br> Reporting Person)** | **Relationship to <br> Reporting Person** |

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&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Stock Option Ownership</u>:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Date of Grant** | **Number of Shares** | **Exercise Price** | **Vesting Dates** | **Expiration Date** | **Exercises to Date<br> (Date, No. of<br> Shares)**  |

---

 **<u>Exhibit C</u>**

**Shengfeng Development Limited**

**TRANSACTION REMINDER**

TO: [Name of Officer or Director] FROM:

DATED:

---

| | |
|:---|:---|
| RE: | **Amendment to Schedule 13D filing and/or Section 16(a) filing** |

---

This is to remind you that if there is a change in your beneficial ownership of ordinary shares or other securities of Shengfeng Development Limited (the "Company"), you must file an amendment to Schedule 13D with the Securities and Exchange Commission (the "SEC") within two business days following the material change, and if you are a director or officer, you must file a Form 4 within two business days following any change in beneficial ownership.

Our records indicate that on<u> </u>(specify date) you had the transactions in the Company's securities indicated on the attached exhibit.

1. Please advise us whether the information on the attached exhibit is correct:

☐ The information is complete and correct.

D This information is <u>not</u> complete and correct. I have marked the correct information on the attached exhibit.

2. Please advise us if we should assist you by preparing the amendment to Schedule
13D for your signature and filing it for you with the SEC based upon the information you provided to us, or if you will prepare and file
the amendment to Schedule 13D yourself. (Please note that we have prepared and attached for your convenience an amendment to Schedule
13D reflecting the information we have, which (if it is complete and correct), you may sign and return in the envelope enclosed.)

D The Company should prepare and file the amendment to Schedule 13D on my behalf after receiving my signature on the form.

D I shall prepare and file the amendment to Schedule 13D myself.

  <br> Signed <br> Dated

If you have any questions, contact Guoping Zheng, the Company's Compliance Officer.

I understand that my amendment to Schedule 13D must be filed as follows: (i) on EDGAR (the SEC Electronic Data-Gathering, Analysis and Retrieval system) and (ii) one copy with the Company's Compliance Officer. If I am a director or officer, I understand that I must also file Section 16(a) reports (Forms 3, 4, and 5) on EDGAR.

## Exhibit 12.1

**Exhibit 12.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, Yongxu Liu, certify that:

1. I have reviewed this annual report on Form 20-F of Shengfeng
Development Limited (the "Company");

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this report;

4. The Company's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the Company's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the Company's
internal control over financial reporting that occurred during the period covered by the annual report that has materially affected,
or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The Company's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee
of the Company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: March 27, 2026 | Date: March 27, 2026 | Date: March 27, 2026 |
| By: | /s/ Yongxu Liu | /s/ Yongxu Liu |
|  | Name: | Yongxu Liu |
|  | Title: | Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, Guoping Zheng, certify that:

1. I have reviewed this annual report on Form 20-F of Shengfeng
Development Limited (the "Company");

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this report;

4. The Company's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the Company's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the Company's
internal control over financial reporting that occurred during the period covered by the annual report that has materially affected,
or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The Company's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee
of the Company's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: March 27, 2026 | Date: March 27, 2026 | Date: March 27, 2026 |
| By: | /s/ Guoping Zheng | /s/ Guoping Zheng |
|  | Name: | Guoping Zheng |
|  | Title: | Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Shengfeng Development Limited (the "Company") on Form 20-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Yongxu Liu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: March 27, 2026 | Date: March 27, 2026 | Date: March 27, 2026 |
| By: | /s/ Yongxu Liu | /s/ Yongxu Liu |
|  | Name: | Yongxu Liu |
|  | Title: | Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2** 

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Shengfeng Development Limited (the "Company") on Form 20-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Guoping Zheng, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: March 27, 2026 | Date: March 27, 2026 | Date: March 27, 2026 |
| By: | /s/ Guoping Zheng | /s/ Guoping Zheng |
|  | Name: | Guoping Zheng |
|  | Title: | Chief Financial Officer |

---