Red Star Macalline Group Corporation Ltd. announced that on 28 August 2023, the Company entered into a supplemental agreement (the " Supplemental Agreement") to revise the annual cap under the Property Service Contract. On 28 August 2023, the company entered into the Supplemental Agreement to revise the annual cap under The Property Service Contract. On 28August 2023, the Company entered in the Supplemental Agreement to revise the Annual Cap under the Property Service Contract.

The annual cap for the transaction amounts payable by the Company under the Property Service Contract for the year ending December 31, 2023 is amended from RMB 16.3 million (as disclosed in the announcement of the Company dated 30 December 2022) to RMB 17.5 million for the year ending December 31., 2023. Save as disclosed above, the rest of the terms of the Property Service Contract remain unchanged. When determine the Revised Annual Cap mentioned above, the Company takes into account: (i) the increase of service area under Property Service Contract.

The property service area under the Property Service Contract will increase by 4,544 square meters since 1 September 2023 and will further increase by 2,164 square meters since 1 October 2023. Such increase was mainly due to that Shanghai Xingzhiyu has decreased its rent area under the Housing Leasing Contract considering its own business needs, the Company repossess such area for its own use and intend to ask Shanghai Xingzhiyu to provide property service together with the remaining part of the Property used by the Group; (ii) the existing service fee under the Property Service Contract and approximately up to 59,799 square meters service area; and (iii) the general level of fees in the market and based on factors including position of the property, the area of the property, property management personnel needs, service demand. For the two financial years ended 31 December 2022 and the period from 1 January 2023 to 30 June 2023, the total property service fees and any other expenses incurred between the Company and Shanghai Xingzhiyu under property service contracts are RMB 12.65 million (audited), RMB 13.02 million (audited) and RMB 7.59 (unaudited), respectively.

Principal Terms of the Property Service Contract. Date: 30 December 2022, Parties: The Company, Shanghai Xingzhiyu, Property involved in the Property Service Contract: The area used by the Group in South and North Buildings, Block B, Building 2, and South and North Buildings, Block A, Building 5, Lane 1466, Shenchang Road, Minhang District, Shanghai Xingzhi Yu. Terms of the Property Service Contract: During the term of the Property Service Contract, if either party terminates the Property Service Contract, the breaching party shall pay one month's property service fee as liquidated damages.

If the Company violates the obligations as agreed in the Property Service Contract which results in Shanghai Xingzhiyu's failure to fulfill the service contents and standards as agreed in the Property Service contract, Shanghai Xingzhiu shall have the right to terminate the Property Service Contract in accordance with laws; if Shanghai Xingzhiyu have incurred economic losses, the Company shall make economic compensation therefor. If Shanghai Xingzhiyu violates the obligations as agreed in The Property Service Contract and fails to fulfill the service contents and standard agreed in the Property Service Contract, the Company shall have the right to claim compensation from Shanghai Xingzhiyu according to its reduced expenses from the narrowed provision of services. If the Company terminates the Property Service Contract., Shanghai Xingzhiyu shall complete the handover procedures with the Company or its selected property service enterprise within a reasonable period as notified by the Company.

The Property Service Contract can be terminated upon mutual agreement between the Company and Shanghai Xedzhiyu and the handover procedures shall be completed within 30 days thereafter. The Property Service Contract can been terminated upon mutual agreement between the company and Shanghai Xingzhi Yu and the handover procedures shall been completed within 30 days thereafter.