Tong Ren Tang Technologies Co. Ltd. announced that, as each of the Distribution Framework Agreement and the Master Procurement Agreement entered into between the Tong Ren Tang Technologies Co. Ltd. and Tong Ren Tang Holdings will expire on 31 December 2019, the parties renewed such agreements on 16 October 2019, each for a term of three years from 1 January 2020 to 31 December 2022, and set the annual caps for the continuing connected transactions contemplated under each of the aforesaid agreements for the three years ending 31 December 2022. Pursuant to the renewed Distribution Framework Agreement: The Company agreed that the Group may, from time to time, sell its products to members of Tong Ren Tang Group. Tong Ren Tang Holdings agreed that Tong Ren Tang Group as the non-exclusive distributor of the Group, any member of Tong Ren Tang Group may, from time to time, purchase products from the Group and then distribute the same to retailers and/or end-users. Details of the products and quantities to be sold by the Group to Tong Ren Tang Group shall be determined by the parties according to market conditions and stated in the individual implementation agreement. Under the renewed Distribution Framework Agreement, the price of the products to be sold by the Group to Tong Ren Tang Group shall not be lower than that charged by the Group to other independent third parties and shall be determined in accordance with a reasonable cost plus a fair and reasonable profit margin: the reasonable cost shall be determined by reference to the cost of the raw materials, the cost of labour and the manufacturing expense, etc.; and the profit margin shall be determined by reference to the prevailing market and the then market price for comparable products in the related industry, and the average gross profit rate of the products of the Group in the past years (approximately 50%). During the term of the renewed Distribution Framework Agreement, members of the Group and members of Tong Ren Tang Group will enter into, from time to time and as necessary, individual implementation agreement for each of the specific transactions contemplated under the renewed Distribution Framework Agreement, including such implementation agreement entered into during the term of the existing Distribution Framework Agreement which has an expiring date within the term of the renewed agreement. Any such implementation agreement shall be within the ambit of the renewed Distribution Framework Agreement and the relevant annual caps for the continuing connected transactions contemplated thereunder.