SINCEREWATCH HK released an Update and Supplemental Announcement detailing progress on resolving its audit “Disclaimer of Opinion,” operational pressures in its watch-distribution segment, financing developments and the termination of a planned acquisition.

The company confirmed that, other than the information disclosed on 31 March 2026, 3 February 2026, 30 April 2026 and 12 May 2026, no additional material progress has been made toward lifting the audit disclaimer. Management will continue to provide quarterly updates until the issue is fully resolved.

Watch Distribution Business • Persistently soft luxury demand, subdued discretionary spending and wider macro-economic uncertainty continue to weigh on sales volumes and pricing power. • Negotiations with new international watch brands remain ongoing, yet a consensus on key commercial terms—particularly minimum purchase commitments—has not been reached. Management is unwilling to accept sizeable minimum purchase obligations under current market conditions. • Recent sales have been primarily on consignment, yielding thin margins.

Liquidity and Staffing Constraints • The group has repaid approximately HK$99.00 million in outstanding loans since October 2024, tightening cash resources available for operating needs. • Staff attrition in the finance department has necessitated the engagement of an external accounting firm. Because historic financial statements were only prepared up to 31 October 2024, the firm must compile management accounts for: 1) FY ended 31 March 2025, 2) six-month period ended 30 September 2025, and 3) FY ended 31 March 2026. Preparation is expected to require about four months, with audited annual results targeted for publication by end-2026, subject to completion of requisite audit procedures.

Termination of Proposed Acquisition • The previously announced agreement to acquire a 51 % equity stake in a natural-gas company has been terminated amid heightened uncertainty stemming from the Middle East conflict. No consideration was paid, and management does not expect any material adverse impact on the group’s financial performance or daily operations.

Continued Suspension of Trading Trading in the company’s shares has been suspended since 2 July 2025 and will remain so until further notice. Shareholders and potential investors are advised to exercise caution when dealing in the securities of SINCEREWATCH HK.