Subject: Medallion Leads the Way Again in Offering More Value, Updated Technology All for the Same Great Price You Pay Now

Dear Valued Client,

We are all faced with many challenges with running our respective businesses right now. Supply chain issues, rising fuel costs, inflation, labor shortages all combine to make this a very difficult time. We at Medallion understand the pressures you face. Though many suppliers have used these issues as cover to raise their prices, we have decided to absorb these rising costs and have no plans to raise prices for the foreseeable future (except our annual cost of living increases). We understand that your success is a shared success and truly value your business.

Costs reduction is a path we have to take to honor that promise. We are implementing many changes in both our East Coast and West Coast facilities to manage that. We will ask for your help in some areas.

On the East Coast we are working hard to modernize the facility so that it can be operated at the same high level as our L.A. facility. As we re-layout the building we are adding shelving and standardizing the storage areas. This will allow our order management system to function more efficiently. It will also allow automatic calculation of your monthly storage charges.

Previous to this (at Plainville) we were forced to convert shelf storage to an "Equivalent Pallet" system. This has led to considerable confusion over the years. You will start to see the storage charge change to a Bins charge (consistent with your contract) beginning soon.

In order to prevent unnecessary costs please review your sku list and discontinue any sku's that are no longer active. This will prevent us from reserving space for items that you no longer plan to restock. Our Client Service group can help you with that.

Along this same line the cost of warehouse space has been on the increase for a number of years now. We stated previously that we do not intend to raise our prices, however we can no longer provide long term storage for product that is not selling at a reasonable rate. If you have product that supports more than 3-6 months' worth of sales, please contact us. We can only store product at our regular rate if it is supported by sales. This problem affects all of our facilities.

As you may be aware our Order/Warehouse Management system (OMS/WMS) is called CIO Technologies. In January, it was purchased by Extensiv. Extensiv is combining CIO Technologies with a number of other products. This more sophisticated WMS system is called 3PL Central.

We will be converting all accounts over to this system beginning soon. This change will add more features, add more functionality, increase our efficiency, and transition us to a true cloud-based system. Integrations to your shopping carts through Cart Rover will continue to operate as before. We will be working diligently with Extensiv to ensure that you experience no impacts to your business during this transition. You will see a difference in "look and feel" when using the system, but operationally it will be the same. We will provide you and your staff with advance training prior to converting your account. You will not incur any additional charges or fees. We will certainly work closely with you to answer any questions you may have and keep you updated as the process unfolds.

Customer Service Changes - Other changes that we are implementing include the standardization of our Client Service Group. Effective immediately you will only have to call one central number (818-998-8366 or 800-597-5250) to contact all of the Medallion Client Services folks. This is an operational change and the same staff remains here to serve you. Regardless of which staff member picks up your call they will be able to assist you and get you the response you are seeking. We are trying to leverage the power of having folks on both Coasts in a way that better supports our clients.

Thanks again for allowing us to be your fulfillment partner and if there is anything that we can do to improve our service level to you please reach out to us.

Sincerely,

Greg Kent, President