Before you make an investment decision with respect to the Company’s common shares, you should carefully consider all of the information included in this Form 10-K and the Company’s subsequent periodic filings with the SEC.
−Removed: In particular, you should carefully consider the risk factors described below and the risks and uncertainties discussed in “Special Note Regarding Forward-Looking Information,” any of which could have a material adverse effect on the Company’s business, results of operations and financial condition and on the actual outcome of matters as to which forward-looking statements are made in this annual report.
−Removed: The following risk factors should be read in conjunction with the balance of this annual report, including the Consolidated Financial Statements and the “Notes to Consolidated Financial Statements.” The risks described below are not the only ones the Company faces.
+Added: In particular, you should carefully consider the risk factors described below and the risks and uncertainties discussed in “Special Note Regarding Forward-Looking Information,” any of which could have a material adverse effect on the Company’s business, results of operations and financial condition and on the actual outcome of matters as to which forward-looking statements are made in this Form 10-K.
+Added: The following risk factors should be read in conjunction with the balance of this Form 10-K, including the Consolidated Financial Statements and the “Notes to Consolidated Financial Statements.” The risks described below are not the only ones the Company faces.
Additional risks that the Company currently deems immaterial or that are currently unknown to the Company may also impair its business or operations.
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The Company’s success depends in part on general political, social and economic conditions and the willingness of consumers to purchase tickets to IMAX locations.
−Removed: If movie-going becomes less popular globally, the Company’s business could be adversely affected, especially if such a decline continues in Greater China, whose consumer market recovered more slowly from the COVID-19 pandemic than other markets, and where economic challenges persist.
−Removed: In addition, the Company’s operations could be adversely affected if consumers’ discretionary income globally or in a particular geography falls as a result of an economic downturn or recession, sustained inflationary conditions, high interest rates, supply chain issues, or otherwise.
−Removed: Such adverse impact on consumer’s discretionary income could result in a shift in consumer demand away from movie-going.
−Removed: Furthermore, sustained inflationary pressures observed globally could materially increase the cost of our goods, services and personnel, which could cause an increase in the Company’s operating costs.
−Removed: The majority of the Company’s revenue is directly derived from the box office results of its exhibitor customers.
−Removed: Accordingly, a decline in attendance at commercial IMAX locations could materially and adversely affect several sources of key revenue streams for the Company.
−Removed: The Company also depends on the sale, lease and installation of IMAX Systems to commercial exhibitors to generate revenue.
−Removed: Commercial exhibitors generate revenues from consumer attendance at their theaters, which depends on the willingness of consumers to visit movie theaters and spend discretionary income at movie theaters.
−Removed: In the event of declining box office and concession revenues, or other economic headwinds, commercial exhibitors may be less willing to invest capital in IMAX Systems.
−Removed: In addition, a significant portion of systems in the Company’s backlog are expected to be installed in newly-built multiplexes.
−Removed: An economic downturn, recession, significant increases in interest rates or other adverse economic developments could impact developers’ ability to secure financing on acceptable terms and complete the build-out of these locations, thereby negatively impacting the Company’s ability to install IMAX Systems, grow its theater network and collect its contractual revenue.
−Removed: The success of the IMAX network is directly related to the availability and success of the IMAX remastered films, and other films released to the IMAX network, as well as the continued purchase or lease of IMAX Systems and other support by exhibitors, for which there can be no guarantee.
−Removed: An important factor affecting the growth and success of the IMAX network is the availability and strategic selection of films for IMAX locations and the box office performance of such films.
−Removed: The Company itself produces only a small number of such films and, as a result, the Company relies principally on films produced by third-party filmmakers and studios, including both Hollywood and local language features converted into the Company’s format.
−Removed: In 2024, 118 new IMAX films were released to the Company’s global network.
−Removed: There is no guarantee that filmmakers and studios will continue to release films to the IMAX network, or that the films selected for release to the IMAX network will be commercially successful.
−Removed: The Company is directly impacted by the commercial success and box office results of the films released to the IMAX network through its joint revenue sharing arrangements, as well as through the percentage of the box office receipts the Company receives from the studios releasing IMAX films, and the Company’s continued ability to secure films, find suitable partners for joint revenue sharing arrangements and to sell IMAX Systems.
−Removed: The commercial success of films released to IMAX locations depends on a number of factors outside of the Company’s control, including whether the film receives critical and consumer acclaim, the timing of its release, the success of the marketing efforts of the studio releasing the film, consumer preferences and trends in cinema attendance.
+Added: The majority of the Company’s revenue comes from its Technology Products and Services segment.
+Added: The Technology Products and Services segment earns revenues principally from the sale or lease of IMAX Systems, a portion of which is directly derived from the box office results of the IMAX locations.
+Added: If consumers’ discretionary income globally or in a particular geography falls for any reason, including an economic downturn or recession, sustained inflationary conditions, high interest rates, and supply chain issues, and/or movie-going becomes less popular and consumers’ willingness to purchase tickets to IMAX locations declines, the Company’s business and revenues may be adversely affected as a result.
+Added: Furthermore, sustained inflationary pressures observed globally could materially increase the cost of goods, services and personnel, which could cause an increase in the Company’s operating costs.
+Added: The Company also depends on exhibitors to purchase, lease, and install IMAX Systems and to supply venues in which to exhibit IMAX films.
+Added: The Company is unable to predict the pace at which exhibitors will purchase, lease, or install IMAX Systems with the Company.
+Added: Furthermore, exhibitors generate revenues from consumer attendance at their theaters, which depends on the willingness and ability of consumers to visit movie theaters and spend discretionary income at movie theaters.
+Added: In the event of declining box office and concession revenues or other economic headwinds, exhibitors may choose to reduce their levels of presence or expansion, be less willing to invest capital in IMAX Systems, negotiate economic terms that are less favorable to the Company, or decide not to enter into transactions with the Company.
+Added: Exhibitors’ unwillingness and/or inability to purchase, lease and/or install IMAX Systems would adversely impact the Company’s business and revenue.
+Added: The Company’s success is directly related to the availability and success of the IMAX remastered films and other content released to the IMAX network.
+Added: An important factor affecting the Company’s growth is the availability and strategic selection of content for IMAX locations and the performance of such content.
+Added: The Company itself produces only a small amount of content and, as a result, the Company relies principally on content produced by third-party content creators, including both Hollywood and local language features converted into the IMAX format.
+Added: In 2025, 126 films and other content (122 new films and 4 re-releases) were released to the Company’s global network.
+Added: There is no guarantee that content creators will continue to release content to the IMAX network, or that the content selected for release to the IMAX network will be commercially successful.
+Added: The Company is directly impacted by the commercial success and global box office results of the films released to the IMAX network through its JRSAs, as well as through the percentage of the GBO receipts the Company receives from the studios releasing IMAX films, and the Company’s continued ability to secure films, find suitable partners for joint revenue sharing arrangements (“JRSA”) and to sell IMAX Systems.
+Added: The commercial success of films released to IMAX locations depends on a number of factors outside of the Company’s control, including whether the film receives critical and consumer acclaim, the timing of its release, the success of the marketing efforts of the studio releasing the film, industry labor disputes, consumer preferences and trends in cinema
Moreover, films can be subject to delays in production or changes in release schedule, which can negatively impact the number, timing and quality of IMAX films released to the Company’s global network.
−Removed: In addition, as the Company’s international network has expanded, the Company has signed deals with studios in other countries to convert their films to the Company’s format and release them to the IMAX network.
−Removed: The Company may be unable to select films which will be successful in international markets or may be unsuccessful in selecting the right mix of Hollywood and local language
−Removed: films for a particular country or region, notably Greater China, the Company’s largest market.
+Added: In addition, as the Company’s international network has expanded, the Company has signed deals with studios in other countries to convert local language films to IMAX’s format and release them to the IMAX network.
+Added: The Company may be unable to select films which will be successful in international markets or may be unsuccessful in selecting the right mix of Hollywood and local language films for a particular country or region, notably Greater China, the Company’s largest market.
Also, conflicts in international release schedules may make it difficult to release every IMAX film in certain markets.
−Removed: The Company depends principally on commercial exhibitors to purchase or lease IMAX Systems, to supply box office revenue under joint revenue sharing arrangements and under its sale and sales-type lease agreements, and to supply venues in which to exhibit IMAX films.
−Removed: The Company is unable to predict the pace at which exhibitors will purchase or lease IMAX Systems or enter into joint revenue sharing arrangements with the Company, or whether any of the Company’s existing exhibitor customers will continue to do any of the foregoing.
−Removed: If exhibitors choose to reduce their levels of presence or expansion, negotiate economic terms that are less favorable to the Company, or decide not to enter into transactions with the Company, the Company’s revenues would not increase at an anticipated rate and motion picture studios may be less willing to convert their films into the Company’s format for exhibition in commercial IMAX locations.
−Removed: As a result, the Company’s future revenues and cash flows could be adversely affected.
+Added: Furthermore, if global box office results of the films released to the IMAX network are not satisfactory or if the scale of the IMAX network declines or does not increase at the same rate as anticipated, studios may be less willing to convert their films into IMAX’s format for exhibition in IMAX locations, which would adversely impact the Company’s revenue generated from both Film Remastering and Distribution of content across the IMAX network.
+Added: For additional discussion of the risks related to IMAX Systems and network, please read the above risk factor titled “— General political, social and economic conditions can affect the Company’s business by reducing both revenues generated from existing IMAX Systems and the demand for new IMAX Systems .”
+Added: The Company’s business may be materially adversely affected by the imposition of tariffs and other trade barriers and retaliatory countermeasures implemented by the United States and other governments.
+Added: Since 2025, the U.S.
+Added: government has implemented substantial and rapidly evolving changes to U.S.
+Added: trade policies, including increased tariffs and changes in U.S.
+Added: participation in multilateral trade agreements, while other countries, China and Canada in particular, have undertaken retaliatory measures in response to such changes.
+Added: While many of the tariffs implemented by the U.S.
+Added: government were struck down by the U.S.
+Added: Supreme Court on February 20, 2026, the full extent of the impact of this ruling is uncertain and the impact of previously implemented tariffs and trade policies or of tariffs and trade policies announced in the future could adversely impact the Company’s operations, costs and expenses applicable to revenues and cash flows.
+Added: The Company continues to closely monitor these developments (including whether tariff refunds may be available in light of the recent judicial decision), and there can be no guarantees that further changes to U.S.
+Added: trade policy and/or retaliatory actions by other countries will not occur.
+Added: Additionally, uncertainty about global trade relationships has and may continue to increase market volatility, currency exchange rate fluctuation, and economic instability, which may adversely impact the Company’s results of operations.
+Added: Furthermore, any resulting downturn or increase in geopolitical tensions may adversely impact consumers’ discretionary income and/or consumer purchasing behavior, which could have a material adverse effect on box office receipts and on the Company’s results of operations and financial condition.
+Added: The extent and duration of previously implemented tariffs and retaliatory actions, the potential changes in tariffs and trade policies in light of the Supreme Court ruling, and the resulting impacts on general economic conditions around the world and on the global filmed entertainment industry in particular, are uncertain and depend on numerous factors, such as the responses of and negotiations among the affected countries.
+Added: As such, the Company cannot predict the impact to its business from any future changes to the trading relationships between the United States and other countries or the impact of new laws or regulations adopted by the United States or other countries.
+Added: Furthermore, any adverse development in these areas could exacerbate other risks discussed in “— The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales, and future growth prospects ,” “— The Company faces risks in connection with its significant presence in China and the continued expansion of its business there ,” and “— General political, social and economic conditions can affect the Company’s business by reducing both revenues generated from existing IMAX Systems and the demand for new IMAX Systems .”
The Company is undertaking brand extensions and new business initiatives, and the Company’s investments and efforts in such business evolution may not be successful.
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These initiatives represent potential new areas of growth for the Company and could include the offering of new products and services that may not be accepted by the market.
−Removed: The Company has recently explored initiatives in the field of in-home entertainment technology, which is an intensely competitive business and which is dependent on consumer demand, over which the Company has no control.
−Removed: The Company is also exploring new technologies to connect the IMAX network to facilitate bringing more unique content, including broadcasts of live events, to IMAX audiences and to expand the Company’s streaming and consumer technology strategy.
−Removed: If any new brand extensions and business initiatives in which the Company invests or attempts to develop does not progress as planned, the Company may be adversely affected by investment expenses that have not led to the anticipated results, by write-downs of its assets, by the distraction of management from its core business or by damage to its brand or reputation.
−Removed: New initiatives could involve acquisitions or the formation of joint ventures and business alliances.
−Removed: For example, in September 2022, the Company acquired SSIMWAVE.
−Removed: Such transactions and arrangements involve significant challenges and risks, including that they may not advance the Company’s long-term business strategy, that the Company realizes an unsatisfactory return on its investments or fails to realize anticipated business synergies, that the Company has difficulty integrating or retaining new employees, systems, and technology, that the Company has disagreements with a relevant partner with respect to financing, management, and development, that the Company fails to identify or anticipate risks and liabilities of acquired companies in advance of acquisition, or that management gets distracted from the Company’s core business.
−Removed: Also, it may take longer than expected to realize the full benefits from these transactions and arrangements such as increased revenue or enhanced efficiencies, or the benefits may ultimately be smaller than the Company expected.
+Added: The Company has recently explored initiatives in the field of in-home entertainment technology, including the development of the Company’s SCT business to bring The IMAX Experience to users across streaming platforms and consumer devices.
+Added: The in-home entertainment industry is an intensely competitive business and dependent on consumer demand, over which the Company has no control.
+Added: The Company has also invested in the connection of the IMAX network to facilitate bringing more unique content, including broadcasts of live events, to IMAX audiences in theaters.
+Added: New initiatives could also involve acquisitions or the formation of joint ventures and business alliances.
+Added: New business initiatives involve significant challenges and risks, including that they may not advance the Company’s long-term business strategy, that the Company realizes an unsatisfactory return on its investments or fails to realize anticipated business synergies, that the Company has difficulty integrating or retaining new employees, systems, and technology, that the Company has
+Added: disagreements with a relevant partner with respect to financing, management, and development, that the Company fails to identify or anticipate risks and liabilities of acquired companies in advance of acquisition, or that management gets distracted from the Company’s core business.
+Added: Also, it may take longer than expected to realize the full benefits from these initiatives such as increased revenue or enhanced efficiencies, or the benefits may ultimately be smaller than the Company expected.
+Added: If any new brand extensions and business initiatives in which the Company invests or attempts to develop do not progress as planned, the Company may be adversely affected by investment expenses that have not led to the anticipated results, including by the write-downs of its assets, by the distraction of management from its core business or by damage to its brand or reputation.
The Company faces cybersecurity and similar risks, which could result in the disclosure, theft, or loss of confidential or other proprietary information, including intellectual property, damage to the Company’s brand and reputation, legal exposure and financial losses.
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The nature of the Company’s business involves access to and storage of confidential and proprietary content and other information, including its own intellectual property and the intellectual property of certain movie studios or partners it may work with, as well as certain information regarding the Company’s customers, employees, licensees, and suppliers.
−Removed: Although the Company maintains robust procedures, internal policies and technological security measures to safeguard such content and information, as well as a cybersecurity insurance policy, the Company’s information technology systems, and the information technology systems of its current or future third-party vendors, collaborators, consultants and service providers, could be penetrated by internal or external parties intent on extracting information, corrupting information, stealing intellectual property or trade secrets, or disrupting business processes.
+Added: Although the Company maintains procedures, internal policies and technological security measures intended to safeguard such content and information, as well as a cybersecurity insurance policy, the Company’s information technology systems, and the information technology systems of its current or future third-party vendors, collaborators, consultants and service providers, could be penetrated by internal or external parties intent on extracting information, corrupting information, stealing intellectual property or trade secrets, or disrupting business processes.
Information security risks have increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks, including from emerging technologies, such as advanced forms of AI and quantum computing.
The Company’s information technology infrastructure may be vulnerable to such attacks, including through the use of malware, software bugs, computer viruses, ransomware, social engineering, and denial of service.
−Removed: It is possible that such attacks could compromise the Company’s security measures or the security measures of parties with whom the Company does business.
+Added: Such attacks could compromise the Company’s security measures or the security measures of parties with which the Company does business.
Because the techniques that may be used to circumvent the Company’s safeguards change frequently and may be difficult to detect, the Company may be unable to anticipate any new techniques or implement sufficient preventive security measures.
In addition, the Company’s sensitive, proprietary, or confidential information could be leaked, disclosed, or revealed as a result of or in connection with the Company’s employees’ or third-party vendors’ use of generative AI technologies.
−Removed: The Company seeks to monitor such attempts and incidents and to prevent their recurrence through modifications to the Company’s internal procedures and information technology infrastructure and provides information security training and compliance program to its employees on an annual basis, but in some cases preventive action might not be successful.
−Removed: Moreover, the development and maintenance of these security measures may be costly and will require ongoing updates as technologies evolve and techniques to overcome the Company’s security measures
−Removed: become more sophisticated.
−Removed: Any such attack or unauthorized access could result in a disruption of the Company’s operations, the theft, unauthorized use or publication of confidential or proprietary information of the Company or its customers, employees, licensees or suppliers, a reduction of the revenues the Company is able to generate from its operations, damage to the Company’s brand and reputation, a loss of confidence in the security of the Company’s business and products, and significant legal and financial exposure, each of which could potentially have an adverse effect on the Company’s business.
−Removed: Refer to Part 1C, “Cybersecurity” for additional information.
+Added: While the Company seeks to monitor such attempts and incidents and to prevent their recurrence through monitoring and modifications, if needed, to the Company’s internal procedures and information technology infrastructure, and provides information security training and compliance program to its employees on an annual basis, in some cases preventive action might not be successful.
+Added: Moreover, the development and maintenance of these security measures may be costly and will require ongoing updates as technologies evolve and techniques to overcome the Company’s security measures become more sophisticated.
+Added: Any such attack or unauthorized access could result in a disruption of the Company’s operations, the theft, unauthorized use or publication of confidential or proprietary information of the Company or its customers, employees, licensees or suppliers, a reduction of the revenues the Company is able to generate from its operations, damage to the Company’s brand and reputation, a loss of confidence in the security of the Company’s business and products, or significant legal and financial exposure, each of which could potentially have an adverse effect on the Company’s business.
+Added: Refer to Part 1, Item 1C, “Cybersecurity” for additional information.
In addition, a variety of laws and regulations at the international, national, and state level govern the Company’s collection, use, protection and processing of personal data.
−Removed: These laws, including but not limited to the General Data Protection Regulation and the California Privacy Rights Act, are constantly evolving and may result in increasing regulatory oversight and public scrutiny in the future.
−Removed: The Company’s actual or perceived failure to comply with such laws and regulations could result in fines, investigations, enforcement actions, penalties, sanctions, claims for damages by affected individuals, and damage to the Company’s reputation, among other negative consequences, any of which could have a material adverse effect on its financial performance.
+Added: These laws, including but not limited to the General Data Protection Regulation, the California Consumer Privacy Act, and China’s Personal Information Protection Law, are constantly evolving and may result in increasing regulatory oversight and public scrutiny in the future.
+Added: The Company’s actual or perceived failure to comply with such laws and regulations could result in fines, investigations, enforcement actions, penalties, sanctions, claims for damages by affected individuals, or damage to the Company’s reputation, among other negative consequences, any of which could have a material adverse effect on its financial performance.
RISKS RELATED TO THE COMPANY’S INTERNATIONAL OPERATIONS
The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales, and future growth prospects.
−Removed: A significant portion of the GBO generated by the Company’s exhibitor customers and its revenues are generated from customers located outside the United States and Canada.
+Added: A significant portion of the Company’s revenues and of the GBO earned by the Company’s exhibitor customers are generated outside the United States and Canada.
Approximately 62%, 58%, and 64% of the Company’s revenues were derived outside of the United States and Canada in 2025, 2024, and 2023, respectively.
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There are a number of risks associated with operating in international markets that could negatively affect the Company’s operations, sales and future growth prospects.
−Removed: These risks include:
−Removed: • new tariffs, trade protection measures, import or export licensing requirements, trade embargoes, sanctions, and other trade barriers, including but not limited to tariffs planned, implemented or threatened by the new U.S.
−Removed: administration and retaliatory responses thereto;
−Removed: • new restrictions on access to markets, both for IMAX Systems and films;
−Removed: • unusual or burdensome foreign laws or regulatory requirements or unexpected changes to those laws or requirements, including censorship of content that may restrict what films the Company’s network can present;
−Removed: • fluctuations in the value of various foreign currencies versus the U.S.
−Removed: Dollar, potential currency devaluations, and imposition of foreign exchange controls in foreign jurisdictions;
+Added: These risks, among others, include:
+Added: Operational and Supply Chain Risks
• difficulties in obtaining competitively priced key commodities, raw materials, and component parts from various international sources that are needed to manufacture quality products on a timely basis;
• dependence on foreign distributors and their sales channels;
−Removed: • reliance on local partners, including in connection with joint revenue sharing arrangements;
+Added: • reliance on local partners, including in connection with JRSAs;
• difficulties in staffing and managing foreign operations;
• inability to complete installations of IMAX Systems, including as a result of material disruptions or delays in the Company’s supply chains, or collect full payment on installations thereof;
−Removed: • local business practices that can present challenges to compliance with applicable anti-corruption and bribery laws;
−Removed: • difficulties in establishing market-appropriate pricing;
−Removed: • less accurate and/or less reliable box office reporting;
+Added: • public health concerns, including pandemics or epidemics, and regulations in response thereto, which could adversely affect the Company’s and its customers’ operations;
+Added: • harm to the IMAX brand from operating in countries with records of controversial government action, including human rights abuses.
+Added: Financial and Macroeconomic Risks
+Added: • fluctuations in the value of foreign currencies versus the U.S.
+Added: Dollar, potential currency devaluations, and imposition of foreign exchange controls in foreign jurisdictions;
• adverse changes in foreign government monetary and/or tax policies, and/or difficulties in repatriating cash from foreign jurisdictions (including with respect to China, where approval of the State Administration of Foreign Exchange is required);
+Added: • requirements to provide performance bonds and letters of credit to international customers to secure IMAX System component deliveries;
+Added: • less accurate and/or less reliable box office reporting;
+Added: • difficulties in establishing market-appropriate pricing;
+Added: • economic conditions in foreign markets, including inflation.
+Added: Geopolitical, Trade, and Regulatory Compliance Risks
+Added: • new and potentially changing tariffs, trade protection measures, import or export licensing requirements, trade embargoes, sanctions and export controls, and other trade barriers, including but not limited to planned, implemented or threatened tariffs and retaliatory responses thereto, or the residual impacts and uncertainty as a result of changes in tariff or trade policy;
+Added: • new restrictions on access to markets, both for IMAX Systems and content;
+Added: • unusual or burdensome foreign laws or regulatory requirements or unexpected changes to those laws or requirements, including censorship of content that may restrict what films or other content are exhibited across the Company’s network;
+Added: • local business practices that can present challenges to compliance with applicable anti-corruption and bribery laws;
• poor recognition of intellectual property rights;
• difficulties in enforcing contractual rights;
−Removed: • economic conditions in foreign markets, including inflation;
−Removed: • public health concerns, including pandemics or epidemics, and regulations in response thereto, which could adversely affect the Company’s and its customers’ operations;
−Removed: • requirements to provide performance bonds and letters of credit to international customers to secure system component deliveries;
−Removed: • harm to the IMAX brand from operating in countries with records of controversial government action, including human rights abuses;
−Removed: • political, economic and social instability, which could result in adverse consequences for the Company’s interests in different regions of the world.
−Removed: Additionally, global geopolitical tensions, such as the conflicts between Russia and Ukraine and in the Middle East, and actions that governments take in response may adversely impact the Company’s ability to operate in such regions and/or result in global or regional economic downturns.
−Removed: For example, in response to the ongoing conflict between Russia and Ukraine, Canada, the United States, and other countries in which the Company operates have imposed broad sanctions and other restrictive actions against governmental and other entities in Russia, which in turn have and may continue to have an adverse impact on the Company’s business and results of operations in affected regions.
−Removed: In addition, in the wake of the Russia-Ukraine conflict and resulting sanctions, major movie studios suspended the theatrical release of films in Russia and financial institutions halted transactions with Russian entities.
−Removed: The Company has notified its exhibitor clients in Russia that such sanctions and actions constitute a force majeure event under their system agreements, resulting in the suspension of the Company’s obligations thereunder.
+Added: • war, conflict, geopolitical tensions and other political, economic and social instability, terrorist attacks and security concerns, such as escalating tensions in the Taiwan Strait, the ongoing conflict between Russia and Ukraine (the Company has 54 theaters in Russia where IMAX services have been suspended), and tensions in the Middle East (including
+Added: intensified discussions around regime change in Iran), which could result in consequences, including adverse consequences, for the Company’s interests in different regions of the world.
+Added: Additionally, global geopolitical tensions and actions that governments take in response may adversely impact the Company’s ability to operate in such regions and/or result in global or regional economic downturns.
+Added: For example, the ongoing conflict between Russia and Ukraine and responses thereto have had and may continue to have an adverse impact on the Company’s business and results of operations in affected regions, including the continued suspension of the Company’s operations in the region.
Given the uncertainty as to the scope, intensity, duration and outcome of geopolitical conflicts, it is difficult to predict the full extent of the adverse impact of geopolitical conflicts on the Company’s business and results of operations.
−Removed: Additionally, given the global nature of the Company’s operations, any protracted conflict or the broader macroeconomic impact of geopolitical conflicts and sanctions imposed in response thereto, have had and could continue to have an adverse impact on the Company’s business, results of operations, financial condition, and future performance (the Company has 11 systems in its backlog from Russia, the Confederation of Independent States (“CIS”) and Ukraine, and none from Israel) and may also magnify the impact of other risks described herein, including the risk of cybersecurity attacks, which may impact information technology systems unrelated to the conflict, or jeopardize critical infrastructure in jurisdictions where the Company operates.
+Added: Additionally, given the global nature of the Company’s operations, any protracted conflict or the broader macroeconomic impact of geopolitical conflicts and sanctions imposed in response thereto, have had and could continue to have an adverse impact on the Company’s business, results of operations, financial condition, and future performance and may also magnify the impact of other risks described herein, including the risk of cybersecurity attacks, which may impact information technology systems unrelated to the conflict, or jeopardize critical infrastructure in jurisdictions where the Company operates.
+Added: While the Company has implemented policies, internal controls, and other measures reasonably designed to promote compliance with applicable laws and regulations related to doing business internationally, any violations of these laws and regulations, or even allegations of such a violation, could disrupt the Company’s operations and harm the Company’s business, financial condition and results of operations.
In addition, changes in United States or Canadian foreign policy can present additional risks or uncertainties as the Company continues to expand its international operations.
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As of December 31, 2025, the Company had 810 IMAX Systems operating in Greater China with an additional 215 systems in backlog, which represent 50% of the Company’s current backlog.
−Removed: Of the IMAX Systems currently scheduled to be installed in Greater China, 78% are under joint revenue sharing arrangements, which further increases the Company’s ongoing exposure to box office performance in this market.
−Removed: The China market faces a number of risks, including a continued slow recovery from the COVID-19 pandemic, changes in laws and regulations, currency fluctuations, increased competition, and changes in economic conditions, including the risk of an economic downturn or recession, trade embargoes, restrictions or other barriers, as well as other conditions that may impact the Company’s exhibitor and studio partners, and consumer spending.
−Removed: The market’s slow recovery from the pandemic has caused some exhibitors in Mainland China, including several of the Company’s exhibitor partners, to experience financial difficulties which, in certain cases, has resulted in delays in meeting payment and IMAX System installation obligations to the Company.
+Added: Of the IMAX Systems currently scheduled to be installed in Greater China, 82% are under JRSAs, which further increases the Company’s ongoing exposure to box office performance in this market.
+Added: The China market faces a number of risks, including changes in laws and regulations, currency fluctuations, increased competition, and changes in economic conditions, including an economic downturn or recession, trade embargoes, restrictions or other barriers, as well as other condition s that may impact the Company’s exhibitor and studio partners, and consumer spending.
+Added: A slowdown of China’s economic growth in recent years has caused some exhibitors in Mainland China, including several of the Company’s exhibitor partners, to experience financial difficulties which, in certain cases, has resulted in delays in meeting payment and IMAX System installation obligations to the Company and permanent closure of underperforming theaters.
There are no guarantees that such financial difficulties will not continue, or that partner delays or failures to meet contractual obligations will not occur in the future, adversely impacting the Company’s future revenues and cash flows.
The Company does not believe that it is currently required to obtain any permission or approval from the China Securities Regulatory Commission, the Cyberspace Administration of China or any other regulatory authority in the People’s Republic of China (“PRC”) for its operations, but there can be no assurance that such permissions or approvals would not be required in the future and, if required, that they would be granted in a timely manner, on acceptable terms, or at all.
−Removed: Furthermore, PRC regulators, including the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and the Ministry of Public Security, have been increasingly focused on regulation in data security and data protection.
+Added: Furthermore, PRC regulators, including the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and the Ministry of Public Security, have been increasingly focused on the regulation of data security and data protection.
Regulatory requirements concerning data protection and cybersecurity, as well as other requirements concerning operations of foreign businesses, in the PRC are evolving, and their enactment timetable, interpretation and implementation involve significant uncertainties.
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There are also uncertainties regarding the interpretation and application of laws and regulations and the enforceability of intellectual property and contract rights in China.
−Removed: If the Company were unable to navigate China’s regulatory environment, or if the Company were unable to enforce its intellectual property or contract rights in China, the Company’s business could be adversely impacted.
−Removed: Political tensions and/or trade wars between China and the United States or Canada could exacerbate any or all of these risks, and adverse developments in any of these areas could impact the Company’s future revenues and cash flows and could cause the Company to fail to achieve anticipated growth in Mainland China.
+Added: Company were unable to navigate China’s regulatory environment, or if the Company were unable to enforce its intellectual property or contract rights in China, the Company’s business could be adversely impacted.
+Added: Ongoing political tensions between China and the United States could exacerbate any or all of these risks.
+Added: Although the United States and China reached a reported trade truce in October 2025, the agreement is only for one year, and it leaves many issues unresolved, resulting in continued uncertainty over the trade relationship.
+Added: Adverse developments in the U.S.-China relationship could heighten the foregoing risks, could impact the Company’s future net income and cash flows and could cause the Company to fail to achieve anticipated growth in China and/or monetize its current assets.
The Company may experience adverse effects due to exchange rate fluctuations.
−Removed: A substantial portion of the Company’s revenues is denominated in U.S.
+Added: A majority of the Company’s revenues is denominated in U.S.
Dollars while a substantial portion of its expenses is denominated in Canadian Dollars.
−Removed: The Company also generates revenues in Chinese Renminbi, Euros and Japanese Yen.
−Removed: While the Company periodically enters into forward contracts to hedge a portion of its exposure to exchange rate fluctuations between the U.S.
−Removed: and the Canadian Dollar, the Company may not be successful in reducing its exposure to these fluctuations.
−Removed: The use of derivative contracts is intended to mitigate or reduce transactional level volatility in the results of foreign operations, but does not completely eliminate volatility.
+Added: While the Company seeks to manage its exposure to foreign exchange rate risks through its regular operating and financing activities and, when appropriate, through the use of derivative financial instruments, the Company may not be successful in reducing its exposure to these fluctuations.
+Added: The use of derivative financial instruments is intended to mitigate or reduce transactional level volatility in the results of foreign operations, but does not completely eliminate volatility.
Even in jurisdictions in which the Company does not accept local currency or requires minimum payments in U.S.
Dollars, significant local currency issues may impact the profitability of the Company’s arrangements with its customers, which ultimately affect the ability to negotiate cost-effective arrangements and, therefore, the Company’s results of operations.
−Removed: In addition, because IMAX films generate box office revenue in 90 different countries, unfavorable exchange rates between applicable local currencies and the U.S.
−Removed: Dollar could affect the GBO generated by exhibitors and the Company’s reported revenues, further impacting the Company’s results of operations.
+Added: In addition, because IMAX content generates box office dependent revenue in 91 different countries as of December 31, 2025, unfavorable exchange rates between applicable local currencies and the U.S.
+Added: Dollar can affect the GBO generated by the Company’s exhibitor customers and its revenues.
RISK RELATED TO THE COMPANY’S INDUSTRY AND COMPETITIVE ENVIRONMENT
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The Company’s primary customers are commercial multiplex exhibitors.
−Removed: Since 2016, the commercial exhibition industry has undergone significant consolidation, including AMC’s acquisition of Carmike Cinemas and Odeon, which includes Nordic and Cineworld’s acquisition of Regal.
+Added: Since 2016, the commercial exhibition industry has undergone significant consolidation both domestically and internationally.
+Added: For example, in 2025, South Korea’s Megabox and Lotte Cinema entered into a merger agreement and are expected to form that nation’s largest theatrical exhibition entity.
Exhibitor concentration has resulted in certain exhibitor chains constituting a material portion of the Company’s network and revenue.
−Removed: For instance, Wanda is the Company’s largest exhibitor customer, representing approximately 9% of the Company’s total revenues in 2024.
+Added: For instance, Wanda Film (“Wanda”) is the Company’s largest exhibitor customer, representing approximately 8% of the Company’s total revenues in 2025.
As of December 31, 2025, through the Company’s partnership with Wanda, there were 393 IMAX Systems operational in Greater China and Wanda represented approximately 21% of the global network and 10% of the Company’s global backlog.
−Removed: The share of the Company’s revenue that is generated by Wanda is expected to continue to grow as the number of IMAX Systems in backlog with Wanda are opened.
−Removed: No assurance can be given that significant customers such as Wanda will continue to purchase IMAX Systems and/or enter into joint revenue sharing arrangements with the Company and if so, whether contractual terms will be affected.
+Added: The share of the Company’s revenue that is generated by Wanda is expected to continue to grow as IMAX Systems in backlog with Wanda are opened.
+Added: No assurance can be given that significant customers, such as Wanda, will continue to purchase IMAX Systems and/or enter into JRSA with the Company and if so, whether contractual terms will be affected.
If the Company does business with Wanda or other large exhibitor chains less frequently or on less favorable terms than currently, the Company’s business, financial condition or results of operations may be adversely affected.
−Removed: addition, an adverse economic impact on a significant customer’s business operations could have a corresponding material adverse effect on the Company.
+Added: In addition, an adverse economic impact on a significant customer’s business operations could have a corresponding material adverse effect on the Company.
The Company also receives revenues from studios releasing IMAX films.
−Removed: Hollywood studios have also experienced consolidation, as evidenced by Disney’s acquisition of certain studio assets from Twenty First Century Fox in 2019 and the expected acquisition of Paramount by Skydance.
−Removed: Studio consolidation could result in individual studios comprising a greater percentage of the Company’s film slate and overall IMAX Film Remastering revenue, and could expose the Company to the same risks described above in connection with exhibitor consolidation.
+Added: Hollywood studios have also experienced and continue to experience consolidation, as evidenced by the 2025 acquisition of Paramount by Skydance and a potential acquisition of Warner Bros.
+Added: Studio consolidation could result in individual studios comprising a greater percentage of the Company’s business and overall Content Solutions segment revenue, and could expose the Company to the same risks described above in connection with exhibitor consolidation.
+Added: In addition, studio consolidation may lead to a reduction in content variety and overall output and/or theatrical release of content, particularly if a studio acquirer is not in the traditional studio production business.
+Added: Such reduction may adversely impact the availability of films for conversion into the IMAX format and distribution into the IMAX network.
Failure to respond adequately or in a timely fashion to changes and advancements in technology could negatively affect the Company’s business.
−Removed: In order to keep pace with changes and advancements in technology and in order to continue to provide an experience that is premium to and differentiated from conventional entertainment experiences, the Company has made, and expects to continue to make, significant investments in technology in the form of research and development and the acquisition of third-party intellectual property and/or proprietary technology.
+Added: In order to keep pace with changes and advancements in technology and in order to continue to provide an experience that is premium to and differentiated from conventional entertainment experiences, the Company has made, and expects to continue to make, significant investments in technology in the form of research and development and the acquisition of third-party intellectual property
+Added: and/or proprietary technology.
A significant portion of the Company’s research and development efforts have been focused on the IMAX Laser Systems and film cameras.
−Removed: The Company intends to continue research and development to further evolve its end-to-end technology.
−Removed: Within the Company’s Streaming and Consumer Technology business, there is ongoing research and development in perceptual metrics including novel measurement and optimization techniques.
−Removed: The process of developing new technologies is inherently uncertain and subject to certain factors that are outside of the Company’s control, including reliance on third-party partners and suppliers, and the Company can provide no assurance its investments will result in commercially viable advancements to the Company’s existing products or in commercially successful new products, or that any such advancements or products will improve upon existing technology or will be developed within the timeframe expected.
−Removed: Artificial intelligence technologies and their uses are currently undergoing rapid change.
−Removed: If the Company fails to enhance its current AI products and develop new products in response to changes in technology or industry standards, or the Company fails to bring product enhancements or new product developments to market quickly enough, the Company’s AI-enabled products could rapidly become less competitive or obsolete.
+Added: The Company continues to invest in other projects, including the development of new SCT product offerings and improvements to its existing product suite.
+Added: The process of developing new technologies is inherently uncertain and subject to certain factors that are outside of the Company’s control, including reliance on third-party partners and suppliers, and the Company can provide no assurance its investments will result in commercially viable advancements to the Company’s existing products or in commercially successful new products, or that any such advancements or products will improve upon existing technology or be developed within the timeframe expected.
+Added: AI technologies and their uses are currently undergoing rapid change.
+Added: If the Company fails to enhance its current AI products and develop new products in response to changes in technology or industry standards, the Company fails to bring product enhancements or new product developments to market quickly enough, or the Company fails to respond to increasing competition from AI-generated content (e.g., AI-created videos or movies), the Company’s AI-enabled products could rapidly become less competitive or obsolete.
The introduction of new, competing products and technologies could harm the Company’s business.
The entertainment industry is very competitive.
−Removed: The Company faces competition both in the form of technological advances in in- home entertainment, as well as those within out-of-home entertainment, including the theater-going experience.
+Added: The Company faces competition in both in-home and out-of-home entertainment, including within the theatrical space.
For example, according to research conducted by Omdia, there were approximately 35,000 conventional-sized screens in North American commercial multiplexes in 2024.
−Removed: In addition, exhibitors and entertainment technology companies have introduced their own branded, large-screen 3D auditoriums or other proprietary theater systems, and in many cases, have marketed those auditoriums or theater systems as having similar quality or attributes as an IMAX System.
−Removed: The Company competes with entertainment and media companies with new technologies and/or substantially greater capital resources to develop and support them.
−Removed: The Company may be unable to continue to produce theater systems or provide experiences which are premium to, or differentiated from, other theater systems or entertainment experiences, respectively.
−Removed: Furthermore, many of the Company’s commercial exhibitor customers are reliant on the availability of retail shopping malls at physical locations, which compete with other forms of retailing such as online retail websites, and may be adversely affected by the changes in the retail shopping landscape and consumer purchasing patterns.
−Removed: In return, the Company may be adversely affected by the challenges faced by its exhibitor customers.
−Removed: As noted above, the Company faces in-home competition from a number of alternative motion picture distribution channels such as home video, streaming services, video-on-demand, internet, and broadcast and cable television.
−Removed: The average exclusive theatrical release window for Hollywood titles has decreased over the years, and there can be no assurance that this release window, which is determined by the movie studios, will not shrink further which could have an adverse impact on the Company’s business and results of operations.
−Removed: In addition, as a result of the COVID-19 pandemic and related movie theater closures, in 2020 and 2021, a number of films were released directly or concurrently to streaming services the same day as to theaters.
−Removed: Most major film studios have since recommitted to exclusive theatrical releases for blockbuster movies.
−Removed: However, there can be no assurance that direct or concurrent release to streaming services will not resume or increase in the future, intensifying in-home competition.
+Added: In addition, exhibitors and entertainment technology companies have introduced their own branded, large-screen 3D auditoriums or other premium theater systems, such as CJ CGV’s 4DX and ScreenX, and in many cases, have marketed those auditoriums or theater systems as having similar quality or attributes as an IMAX System.
+Added: The rising consumer interest in premium cinematic experiences has resulted in demand for premium formats and could drive more investment into the Company’s competitors.
+Added: If the Company is unable to continue to produce theater systems or provide experiences which are premium to, or differentiated from, other theater systems or entertainment experiences, respectively, consumers may be unwilling to pay the price premiums associated with the cost of IMAX tickets and the global box office performance of IMAX films could decline.
+Added: The declining global box office performance of IMAX films could materially and adversely harm the Company’s business and prospects.
+Added: Furthermore, many of the Company’s commercial exhibitor customers are reliant on the availability of retail shopping malls, which compete with other forms of retailing such as online retail websites, and have been and may continue to be adversely affected by the changes in the retail shopping landscape and consumer purchasing patterns.
+Added: The Company may in turn be adversely affected by the challenges faced by its exhibitor customers.
+Added: The Company also faces in-home competition from a number of alternative content distribution channels such as streaming services, video-on-demand, internet, and broadcast and cable television.
+Added: The average exclusive theatrical release window for films has decreased over the years, and there can be no assurance that this release window, which is determined by the movie studios, will not shrink further, which could have an adverse impact on the Company’s business and results of operations.
+Added: Furthermore, there can be no assurance that film studios will not increase the direct or concurrent release of films to streaming services in the future, intensifying in-home competition.
Several streaming services release original films directly to subscribers, bypassing theatrical distribution.
The Company further competes for the public’s leisure time and disposable income with other forms of entertainment, including gaming, sporting events, concerts, live theater, social media, and restaurants.
−Removed: If the Company is unable to continue to produce a differentiated theater experience, consumers may be unwilling to pay the price premiums associated with the cost of IMAX tickets and the box office performance of IMAX films may decline.
−Removed: The declining box office performance of IMAX films could materially and adversely harm the Company’s business and prospects.
+Added: Furthermore, the Company competes with entertainment and media companies with new technologies and/or substantially greater capital resources to develop and support them.
The Company may not be able to adequately protect its intellectual property, and competitors could misappropriate its technology or brand, which could weaken its competitive position.
−Removed: The Company depends on its proprietary knowledge regarding IMAX Systems including digital and film technology, video quality assessment and image enhancement.
+Added: The Company depends on its proprietary knowledge regarding IMAX Systems including digital, audio, and film technology.
The Company relies principally upon a combination of copyright, trademark, patent and trade secret laws, restrictions on disclosures and contractual provisions to protect its proprietary and intellectual property rights.
6 unchanged sentences
The Company’s patents are filed in the United States, often with corresponding patents or filed applications in other jurisdictions, such as Canada, China, Belgium, Japan, France, Germany, and the United Kingdom.
−Removed: The patent applications pending may not be issued or the patents may not provide the Company with any competitive advantage.
+Added: The patent applications pending may not be issued or the
+Added: patents may not provide the Company with any competitive advantage.
The patent applications may also be challenged by third parties.
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If these developments were to occur, it could have an adverse effect on the Company’s sales or market position.
−Removed: Any claims or litigation initiated by the Company to protect its proprietary technology could be time consuming, costly, and divert the attention of its technical and management resources.
+Added: Any claims or litigation initiated by the Company to protect its proprietary technology or other intellectual property could be time consuming, costly, and divert the attention of its technical and management resources.
If the Company chooses to go to court to stop a third party from infringing its intellectual property, that third party may ask the court to rule that the Company’s intellectual property rights are invalid and/or should not be enforced against that third party.
3 unchanged sentences
In addition, others could obtain knowledge of the Company’s trade secrets through independent development or other legal means.
−Removed: The IMAX brand stands for the highest quality and most immersive entertainment experiences.
−Removed: Protecting the IMAX brand is a critical element in maintaining the Company’s relationships with studios and its exhibitor clients and building and maintaining brand loyalty and recognition.
+Added: The Company believes that protecting the IMAX brand is a critical element in maintaining the Company’s relationships with studios and its exhibitor clients and building and maintaining brand loyalty and recognition.
Though the Company relies on a combination of trademark and copyright law as well as its contractual provisions to protect the IMAX brand, those protections may not be adequate to prevent erosion of the brand over time, particularly in foreign jurisdictions.
2 unchanged sentences
The Company may be subject to claims of infringement of third-party intellectual property rights that are costly to defend, result in the diversion of management’s time and efforts, require the payment of damages, limit the Company’s ability to use particular technologies in the future or prevent the Company from marketing its existing or future products and services.
−Removed: The Company’s commercial success will depend in part on not infringing, misappropriating, or violating the intellectual property rights of others.
+Added: The Company’s commercial success depends in part on not infringing, misappropriating, or violating the intellectual property rights of others.
A third party could assert a claim against the Company for alleged infringement of its patent, copyright, trademark, or other intellectual property rights, including in relation to technologies that are important to the Company’s business.
−Removed: may not be aware of whether its products or services do or will infringe existing or future patents or the intellectual property rights of others.
+Added: The Company may not be aware of whether its products or services do or will infringe existing or future patents or the intellectual property rights of others.
In addition, there can be no assurance that one or more of the Company’s competitors who have developed competing technologies or the Company’s other competitors will not be granted patents for their technology and allege that the Company has infringed.
2 unchanged sentences
Such a license may not be available on reasonable terms, if at all, and there can be no assurance that the Company would be able to redesign its services in a way that would not infringe the intellectual property rights of others.
−Removed: Any payments the Company is required to make and any injunction the Company is required to comply with as a result of any infringement could harm its reputation and financial results.
+Added: If the Company was required to make payments or comply with an injunction as a result of any infringement, its reputation and financial results could be harmed.
RISKS RELATED TO THE COMPANY’S REVENUES, EARNINGS, AND FINANCIAL POSITION
1 unchanged sentence
The Company’s operating results and cash flow can fluctuate substantially from period to period.
−Removed: In particular, fluctuations in IMAX System installations and GBO performance of IMAX films can materially affect operating results.
+Added: Fluctuations in IMAX System installations and IMAX GBO, particular, can materially affect operating results.
Factors that have affected the Company’s operating results and cash flow in the past, and are likely to affect its operating results and cash flow in the future, include, among other things:
• the timing of signing and installation of new IMAX Systems (particularly for installations in newly-built multiplexes, which can result in delays that are beyond the Company’s control);
−Removed: • the timing and commercial success of films distributed to the Company’s network;
+Added: • the timing and commercial success of films distributed to the worldwide IMAX network;
• the demand for, and acceptance of, the Company’s products and services;
−Removed: • the recognition of revenue of sale and sales-type leases;
+Added: • the timing of revenue recognition of sale and sales-type leases;
• the classification of leases as sales-type versus operating;
−Removed: • the volume of orders received and that can be filled in the period;
• the level of its sales backlog;
−Removed: • the signing of film distribution agreements;
−Removed: • the financial performance of IMAX Systems operated by the Company’s customers;
−Removed: • financial difficulties faced by customers, particularly customers in the commercial exhibition industry;
−Removed: • the magnitude and timing of spending in relation to the Company’s research and development efforts and related investments, as well as new business initiatives, and success thereof;
−Removed: • the number and timing of joint revenue sharing arrangement installations, related capital expenditures, and timing of related cash receipts.
+Added: • the signing of Film Remastering and distribution agreements;
+Added: • the financial performance of IMAX Systems operated by the Company’s exhibitor customers;
+Added: • financial difficulties faced by customers;
+Added: • the magnitude and timing of spending in relation to the Company’s research and development efforts and related investments, as well as new business initiatives, and the success thereof;
+Added: • the number and timing of JRSA installations, related capital expenditures, and related cash receipts.
Most of the Company’s operating expenses are fixed in the short term.
−Removed: The Company may be unable to rapidly adjust its spending to compensate for any unexpected shortfall in sales, joint revenue sharing arrangements revenue or IMAX Film Remastering revenue, which would harm operating results for a particular period.
+Added: The Company may be unable to rapidly adjust its spending to compensate for any unexpected shortfall in sales or revenue, which would harm operating results for a particular period.
The Company’s systems revenue can vary significantly from its cash flows under IMAX System sales or lease agreements.
1 unchanged sentence
The Company often provides financing to customers for IMAX Systems on a long-term basis through long-term sale or lease arrangements.
−Removed: The terms of leases or financing
−Removed: receivables are typically 10 to 12 years.
−Removed: The sale and sales-type lease agreements for IMAX Systems typically provide for three major sources of cash flow:
+Added: The terms of these arrangements are typically 10 to 20 years with renewal provisions and provide for three major sources of cash flow to the Company:
• initial fees, which are paid in installments generally commencing upon the signing of the agreement until installation of the IMAX System;
−Removed: • ongoing fees, which are paid monthly after the IMAX System has been opened to the public and are generally equal to the greater of a fixed minimum amount per annum and a percentage of box office receipts;
+Added: • ongoing fees, which are paid monthly after the IMAX System has been opened to the public and are generally equal to the greater of a fixed minimum amount per annum or a percentage of box office receipts;
• ongoing annual maintenance and extended warranty fees, which are generally payable annually or quarterly.
−Removed: Initial fees generally make up the vast majority of cash received under IMAX System sales or sales-type lease agreements.
−Removed: For sale and sales-type leases, the revenue recorded is generally equal to the sum of initial fees and the present value of any future initial payments, and where applicable fixed minimum ongoing payments.
−Removed: Revenue recorded for sales arrangements may also include an estimate of future variable consideration due under the agreement.
+Added: Initial fees generally make up the vast majority of cash received by the Company under IMAX System sales or sales-type lease agreements.
+Added: For sale and sales-type leases, the revenue recorded is generally equal to the sum of initial fees and the present value of any future annual minimum payments.
+Added: Sales arrangements may also include the present value of the estimated future variable consideration based on forecasted box office performance for the term.
Cash received from initial fees in advance of meeting the revenue recognition criteria for the IMAX Systems is recorded as deferred revenue.
−Removed: Leases that do not transfer substantially all of the benefits and risks of ownership to the customer are classified as operating leases.
−Removed: For these leases, initial fees and fixed minimum ongoing payments are recognized as revenue on a straight-line basis over the lease term.
−Removed: Contingent payments in excess of fixed minimum ongoing payments are recognized as revenue when reported by theater operators, provided collectability is reasonably assured.
+Added: The Company also provides IMAX Systems to customers through JRSAs, which typically have an initial term of 10 years or longer.
+Added: Under the traditional form of JRSA, in exchange for providing the IMAX System under a long-term lease, the Company earns rental revenues based on a percentage of contingent box office receipts rather than a fixed upfront fee or annual minimum payments.
+Added: Under hybrid JRSA arrangement, the Company receives a reduced fixed upfront payment and a percentage of contingent box office receipts.
+Added: For certain of JRSAs that are classified as operating leases, initial fees and fixed minimum ongoing payments are recognized as revenue on a straight-line basis over the lease term.
+Added: Contingent payments in excess of fixed minimum ongoing payments are recognized as revenue when reported by customers, provided collectability is reasonably assured.
As a result of the above, the revenue set forth in the Company’s Consolidated Financial Statements does not necessarily correlate with the Company’s cash flow or cash position.
−Removed: Revenues include the present value of future contracted cash payments, and there is no guarantee that the Company will receive such payments under its lease and sale agreements if its customers default on their payment obligations.
+Added: Revenues include the present value of future contracted cash payments, and there is no guarantee that the Company will receive such payments if its customers default on their payment obligations or if box office does not actualize as forecasted.
The Company may not convert all of its backlog into revenue and cash flows.
−Removed: As of December 31, 2024, the Company’s backlog included 440 IMAX Systems, consisting of 164 IMAX Systems under sales or lease arrangements and 276 IMAX Systems under joint revenue sharing arrangements.
+Added: As of December 31, 2025, the Company’s backlog included 434 IMAX Systems, consisting of 139 IMAX Systems under sales or lease arrangements and 295 IMAX Systems under JRSAs.
The Company lists signed contracts for IMAX Systems for which revenue has not been recognized as backlog prior to the time of revenue recognition.
The total value of the backlog represents all binding IMAX System sale or lease agreements scheduled to be installed in the future.
−Removed: Backlog value includes initial fees along with the estimated present value of contractual ongoing fees due over the term, but excludes any variable consideration estimates and amounts allocated to maintenance and extended warranty revenues.
−Removed: Notwithstanding their legal obligations, some of the Company’s exhibition customers with which it has signed contracts may be delinquent in their contractual payments and/or not accept delivery of IMAX Systems that are included in the Company’s backlog.
−Removed: An economic or industry downturn may exacerbate exhibition customer liquidity constraints and the risk of customers not accepting delivery of IMAX Systems.
−Removed: Construction projects linked to malls are particularly susceptible to economic downturns and delays.
−Removed: Customers sometimes request that the Company agree to modify their obligations concerning systems in backlog, which the Company has agreed to do in the past under certain circumstances, and may agree to do in the future.
−Removed: Customer-requested delays in the installation of IMAX Systems in backlog remain a recurring and unpredictable part of the Company’s business.
−Removed: China’s slow recovery from the COVID-19 pandemic has caused several of the Company’s exhibition partners operating in China to delay payment or theater system installation obligations to the Company.
+Added: Notwithstanding their legal obligations, some of the Company’s exhibitor customers may be delinquent in their contractual payments and/or not accept delivery of IMAX Systems that are included in the Company’s backlog.
+Added: An economic or industry downturn may exacerbate exhibitor customer liquidity constraints and the risk of customers not accepting delivery of IMAX Systems.
+Added: Construction projects that are linked to the construction of new malls are particularly susceptible to economic downturns and delays.
+Added: Customers with system obligations in backlog sometimes request that the Company agree to modify or reduce such obligations, which the Company has agreed to do in the past under certain circumstances, and may agree to do in the future.
+Added: Customer-requested delays in the installation of IMAX Systems in backlog remain a recurring and unpredictable part of the Company’s business, especially in China.
+Added: A slow down in China’s economic growth in the past has caused several of the Company’s exhibition partners operating in China to delay payment or theater system installation obligations to the Company.
Any reduction or change in backlog could adversely affect the Company’s future revenues and cash flows.
The Company’s inability to enter into renewals of new sales and lease agreements on favorable terms or at all would adversely affect its cash flows and operating results.
−Removed: Approximately 9% of the Company’s sales and lease agreements are due to expire in the next 12 months.
+Added: As of December 31, 2025, approximately 7% of the Company’s sales and lease agreements were due to expire in the ensuing 12 months.
If these agreements are not renewed, or if the Company is unable to enter into new leases agreements comparable to those currently in effect in a timely manner, then the Company’s systems revenue could be adversely affected.
The Company’s revenues from existing customers are derived in part from financial reporting provided by its customers, which may be inaccurate or incomplete, resulting in lost or delayed revenues.
−Removed: The Company’s revenue under its joint revenue sharing arrangements, a portion of the Company’s payments under lease or sales arrangements and its film distribution fees are based upon financial reporting provided by its customers.
−Removed: If such reporting is inaccurate, incomplete, or withheld, the Company’s ability to receive the appropriate payments it is owed in a timely fashion may be
−Removed: The Company’s contractual ability to audit IMAX locations may not rectify payments lost or delayed as a result of customers not fulfilling their contractual obligations with respect to financial reporting.
−Removed: There is collection risk associated with payments to be received over the terms of the Company’s IMAX System agreements.
−Removed: The Company is dependent in part on the viability of its exhibitors for collections under long-term leases, sales financing agreements, and joint revenue sharing arrangements.
−Removed: Exhibitors or other operators may experience financial difficulties that could cause them to be unable to fulfill their contractual payment obligations to the Company.
+Added: A portion of the Company’s revenue is based upon financial reporting provided by its customers.
+Added: If such reporting is inaccurate, incomplete, or withheld, the Company’s ability to receive the appropriate payments it is owed in a timely fashion may be impaired.
+Added: While the Company has the contractual ability to audit IMAX locations, this may not rectify payments lost or delayed as a result of customers not fulfilling their contractual obligations with respect to financial reporting.
+Added: There is collection risk associated with payments to be received over the terms of the Company’s agreements.
+Added: The Company is dependent in part on the viability of its customers for collections under the Company’s agreements.
+Added: Exhibitors, other operators or smaller production studios may experience financial difficulties that could cause them to be unable to fulfill their contractual payment obligations to the Company.
As a result, the Company’s future revenues and cash flows could be adversely affected.
4 unchanged sentences
The Company has been and may continue to be subject to impairment losses on its inventories if they become obsolete.
−Removed: The Company records write-downs for excess and obsolete inventory based upon current estimates of future events and conditions, including the anticipated installation dates for the current backlog of IMAX System contracts, technological developments, signings in negotiation and anticipated market acceptance of the Company’s current and pending IMAX Systems.
+Added: The Company records write-downs for excess and obsolete inventories based upon current estimates of future events and conditions, including the anticipated installation dates for the current backlog of IMAX System contracts, technological developments, signings in negotiation and anticipated market acceptance of the Company’s current and pending IMAX Systems.
+Added: The Company has been and may continue to be subject to impairment losses related to goodwill and long-lived assets.
+Added: Under United States Generally Accepted Accounting Principles (“U.S.
+Added: GAAP”), the Company tests goodwill annually for impairment and more frequently if events or changes in circumstances indicate that goodwill may be impaired.
+Added: The Company also tests long-lived assets for impairment if events or changes in circumstances indicate that such assets with an asset group may be impaired.
+Added: These events and circumstances may include a significant change in legal factors or in the business climate, a significant decline in the Company’s share price, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a significant asset group.
+Added: If it is determined that sufficient future cash flows do not exist to support the current carrying value, the Company will be required to record an impairment charge in order to adjust the value of these assets to the newly established estimated value.
+Added: The Company may be required to record a significant charge to earnings in its Consolidated Financial Statements during the period in which any other impairment of its goodwill or long-lived assets is determined.
+Added: For additional information, see Note 12 to the Consolidated Financial Statements.
RISKS RELATED TO THE COMPANY’S COMMON SHARES
6 unchanged sentences
The Company is incorporated under the federal laws of Canada, some of its directors and officers are residents of Canada and a substantial portion of its assets and the assets of such directors and officers are located outside the United States.
−Removed: As a result, it may be difficult for United States plaintiffs to effect service within the United States upon those directors or officers who are not residents of the United States, or to obtain or enforce against them or the Company judgments of United States courts predicated solely upon civil liability under the United States federal securities laws.
−Removed: In addition, it may be difficult for plaintiffs to bring an original action outside of the United States against the Company to enforce liabilities based solely on United States federal securities laws.
+Added: As a result, it may be difficult for U.S.
+Added: plaintiffs to effect service within the United States upon those directors or officers who are not residents of the United States, or to obtain or enforce against them or the Company judgments of U.S.
+Added: courts predicated solely upon civil liability under the U.S.
+Added: federal securities laws.
+Added: In addition, it may be difficult for plaintiffs to bring an original action outside of the United States against the Company to enforce liabilities based solely on U.S.
+Added: federal securities laws.
RISKS RELATED TO THE COMPANY’S INDEBTEDNESS
34 unchanged sentences
In addition, the Company may experience challenges with respect to employee retention given the current competitive labor market.
−Removed: A number of external factors beyond the Company’s control, including its industry’s highly competitive market for skilled workers and leaders, cost inflation, development of non-compete laws, and workforce participation rates, may negatively affect the Company’s ability to retain and attract qualified employees.
−Removed: If the Company experiences high attrition rates in its employee population, the results of our operations may be adversely affected.
−Removed: If the Company’s goodwill or long-lived assets become impaired, the Company may be required to record a significant charge to earnings.
−Removed: Under United States Generally Accepted Accounting Principles (“U.S.
−Removed: GAAP”), the Company reviews its long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
−Removed: Goodwill is required to be qualitatively assessed at least annually and when events or changes in circumstances arise or can be quantitatively tested for impairment.
−Removed: Factors that may be considered a change in circumstances include (but are not limited to) a decline in share price and market capitalization, declines in future cash flows, and slower growth rates in the Company’s industry.
−Removed: The Company may be required to record a significant charge to earnings in its financial statements during the period in which any impairment of its goodwill or long- lived assets is determined.
+Added: A number of external factors beyond the Company’s control, including its industry’s highly competitive market for skilled workers and leaders, cost inflation, and workforce participation rates, may negatively affect the Company’s ability to retain and attract
+Added: qualified employees.
+Added: If the Company experiences high attrition rates in its employee population, the results of its operations may be adversely affected.
Changes in accounting and changes in management’s estimates may affect the Company’s reported earnings and operating income.
3 unchanged sentences
Regulatory and market responses to climate change concerns may negatively impact our business and increase our operating costs.
−Removed: Growing public concern about climate change and enhanced governmental attention to climate matters has resulted in expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change impacts, carbon emissions, water usage, waste management, and risk oversight and has expanded and may continue to expand the nature, scope, and complexity of matters that the Company is required to control, assess, and report.
+Added: Public concern about climate change and governmental attention to climate matters has resulted in expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change impacts, carbon emissions, water usage, waste management, and risk oversight and has expanded and may continue to expand the nature, scope, and complexity of matters that the Company is required to control, assess, and report.
Furthermore, regulatory efforts to combat climate change could result in increases in the cost of raw materials, taxes, transportation and utilities for the Company’s suppliers and vendors which would result in higher operating costs for the Company and potentially impact the availability of components used in the IMAX Systems.
4 unchanged sentences
Additionally, the physical impacts of climate change may cause occurrences of natural disasters to increase in frequency, severity and duration, magnifying the adverse impact of such occurrences and the cost of insuring against them.
−Removed: climates and geology of some of the regions in which the Company’s principal offices are located, including California, present increased risks of adverse weather or natural disasters.
+Added: The climates and geology of some of the regions in which the Company’s principal offices are located, including California, present increased risks of adverse weather or natural disasters.
Any such events in the future could disrupt the Company’s operations and impact the Company’s ability to serve its customers.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.