The Board of Directors of Mlabs Systems Berhad (“Mlabs” or the “Company”) wishes to inform that Mlabs Research Sdn. Bhd. (“Mlabs Research”), a wholly owned subsidiary of the Company, had on 19 November 2020 entered into a Digital Distribution Agreement (“Agreement”) with mTouche International Sdn. Bhd. (“MISB”) to promote, market, and distribute Novel Coronavirus (SAR-CoV-2) RP-PCR Detection and Diagnostic kit and Novel Coronavirus (SAR-CoV-2) lgM/lgG Rapid Test Kit, and other equivalent products in Malaysia and South East Asia Region only through Mlabs digital distribution channel.

MISB is a wholly owned subsidiary of mTouche Technology Berhad which the group is engaged in the provision of mobile value-added services and digital medial marketing to more than 40 mobile network operators, who are reaching out to more than 640 million subscribers throught its operation in South East Asia market and Hong Kong.

The Agreement is to a period of one (1) year, commencing on and from 19 November 2020, unless otherwise mutually extended or terminated. Either party may terminate the Agreement upon delivery of written notice at least 30 days prior to such termination.

The Agreement will not have any effects on the share capital and shareholding structure of the Company. However, it is expected to have positive contribution to the earnings and net assets of Mlabs Group.

Similar to all business entities, the risk factors affecting the execution of the Agreement, including but not limited to business risks such as prudent financial management, changes in political, economic and regulatory conditions. However, the Board will continue to exercise due care in considering the risks associated with the Agreement and will take appropriate measures in planning the successful execution of the Agreement.

The Agreement being incurred in the ordinary course of business, is not subject to the approval of the shareholders.

None of the Directors and/or other major shareholders of the Company and/or any persons connected to them have any interest, direct or indirect, in relation to the Agreement.

The Board, after due consideration, is of the opinion that the Agreement is in the best interest of the Group.

This announcement is dated 19 November 2020.