Core Viewpoint - The arbitration ruling regarding the exclusive distribution agreement between Sincere Brand Management Limited (SBML) and Multicontinental Distribution (Asia) DMCC has significant implications for SBML's rights and operations in the distribution of Franck Muller watches and related accessories in specified regions [1][2]. Group 1: Arbitration Outcome - The exclusive distribution agreement was incorrectly terminated, but it is deemed to have been terminated as of October 3, 2022, granting SBML the right to seek damages [1]. - SBML's claims for customer indemnification guarantees were rejected [1]. - Multicontinental's claims regarding minimum purchase requirements were also dismissed [1]. Group 2: Obligations and Financial Implications - Multicontinental is required to repair and return withheld watches to SBML within 60 days from the arbitration notification date, excluding consignment inventory [1]. - SBML must return consignment products and organize inspections, and is obligated to pay Multicontinental and GFM for each consignment product sold, with a book value of approximately HKD 338 million as of March 31, 2025 [1]. - The arbitration tribunal ruled that both Multicontinental and GFM are eligible to be sued [1]. Group 3: Trademark and Distribution Rights - SBML must immediately cease any use of the FM trademark and stop claiming to be the (exclusive) distributor of the products, as a result of the arbitration ruling that the exclusive distribution agreement is considered terminated [1]. Group 4: Company Response - The company believes that the arbitration ruling aligns with its initial expectations and will further analyze the ruling to take appropriate actions to protect its rights and interests [2].

Core Viewpoint - The arbitration ruling regarding the exclusive distribution agreement between Sincere Brand Management Limited (SBML) and Multicontinental Distribution (Asia) DMCC has significant implications for the company's rights and operations in the distribution of Franck Muller watches and related accessories in specific regions [1][2] Summary by Sections Arbitration Outcome - The exclusive distribution agreement was incorrectly terminated, but it is deemed to have been terminated since October 3, 2022, granting SBML the right to claim damages [1] - SBML's claim for customer indemnification was rejected [1] - Multicontinental's claims regarding minimum purchase requirements were also dismissed [1] - Multicontinental is required to repair and return withheld watches to SBML within 60 days from the notification of part of the ruling, excluding consignment inventory [1] Financial Implications - SBML must return consignment products and organize inspections, and must pay Multicontinental and GFM for each consignment product sold, with a book value of approximately HKD 338 million as of March 31, 2025 [1] Legal Standing - The sole arbitration tribunal ruled that both Multicontinental and GFM are eligible to be sued [1] - SBML is required to immediately cease any use of the FM trademark and stop claiming to be the (exclusive) distributor of the products, as a result of the termination of the exclusive distribution agreement [1] Company Response - The company believes the arbitration ruling aligns with its initial expectations and will further study the ruling to take appropriate actions to protect its rights and interests [2]