Million Stars Holdings Limited announced that since late November 2022, the COVID-19 prevention and control measures have been gradually eased in various regions in China. In early December 2022, the central government proposed that nucleic acid testing shall be conducted on a voluntary basis, and that infected cases shall no longer be isolated, which resulted in a rapid increase in COVID-19 infection rate. 60% of the Group employees (including the management and the staff) are inflected from the virus and forced to suspend from their duties, and the major offices in Shenzhen, Shanghai and Nanjing are temporarily closed.

For employees not being affected, they are encouraged to work from home. However, some of them have gradually showing the symptom of fever, which greatly decrease the efficiency of the audit work in terms of collecting and providing various information. On top of that, upstream and downstream enterprises were also affected.

Some of the Auditing Confirmations are in printed and stamped version, and need to have the origins mailed back to Hong Kong. Currently, the efficiency of the courier and logistics services has been greatly impacted as many of the couriers were inflected from the virus. Meanwhile, the offices where some of the recipients located were closed or the people concerned were inflected, which resulted in the failure of receiving and handling the mails in time.

Hence, the Company is not able to provide relevant materials for the audit effectively. In addition, the Company is required to provide supporting documents for one of advertising business projects in relation to a mobile game app. The supporting documents include (i) the installation package of the mobile game app for the preparation of issuance on the Android and IOS platforms; and (ii) screenshots of the Internet advertisements from the internal test stage, which have not been collected by us.

Such Supporting Documents are used as part of the audit process to verify the cash flow for the next 18 months. Due to the above reasons, the Group failed to complete the review of the audited annual results as at 16 December 2022. As at the date of this announcement, the assets impairment assessment had been completed and most of the Audit Confirmations had been obtained.

Save as disclosed above, there is no other outstanding audit issues. In light of the above situation, additional time is required to complete the audit work. Based on the information currently available to the Company and the current progress of the audit process and the Christmas and Lunar New Year holiday, it is anticipated that the expected publication of announcement of the Audited Annual Results will be published on or before 13 January 2023 and expected dispatch date of annual report of the Group will be on or before 3 February 2023.