What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-19 · 471 added, 379 removed, 2218 unchanged (28% of the section changed)

9 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of IMAX Corporation

To the Board of Directors and Shareholders of IMAX Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of IMAX Corporation and its subsidiaries (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income (loss), of cash flows and of shareholders’ equity for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of IMAX Corporation and its subsidiaries (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control ‒ Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Revenue Recognition ‒ IMAX Systems

As described in notes 2 and 19 to the consolidated financial statements, the Company recognized revenue from IMAX Systems related to the IMAX Technology Products and Services reportable segment (System Sales) of $82.5 million for the year ended December 31, 2024 ($93.3 million for the year ended December 31, 2023).

Management evaluates whether an IMAX System arrangement involves either a sale or a lease of an IMAX System, and for those arrangements that are accounted for as a sale of an IMAX System, determines the transaction price and the allocation thereof to each separate performance obligation based on estimated standalone selling prices.

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and (iii) evaluating the reasonableness of significant assumptions used by management, including estimated standalone selling prices.

Evaluating management’s

assumption related to estimated standalone selling prices involved evaluating whether the assumption was reasonable by comparing the estimate to current and historical transactions.

Evaluating the appropriateness of management’s assessment of the timing of revenue recognition involved inspecting the customers’ certificates of acceptance and theatre openings during the year.

Evaluating management’s assumption related to estimated standalone selling prices involved evaluating whether the assumption was reasonable by comparing the estimate to current and historical transactions.

Evaluating the appropriateness of management’s

assessment of the timing of revenue recognition involved inspecting the customers’ certificates of acceptance and theatre openings during the year.

/s/ PricewaterhouseCoopers LLP

76 unchanged sentences

7,516 5,758 4,578

Credit loss (reversal) expense, net

Credit loss expense (reversal), net

696 ( 973 ) 1,759

Asset impairments

Restructuring and other charges

Goodwill impairment

Restructuring charges and other impairments

2,478 3,749 2,946

Income (loss) from operations

Income from operations

84,229 43,862 50,398

Realized and unrealized investment gains

Realized and unrealized investment (losses) gains

( 867 ) 127 465

Retirement benefits non-service expense

4 unchanged sentences

( 7,362 ) ( 8,084 ) ( 6,821 )

Income (loss) before taxes

Induced conversion expense on settlement of convertible notes

( 15,264 ) — —

Income before taxes

63,293 37,698 46,117

Income tax expense

( 17,767 ) ( 4,996 ) ( 13,051 )

Net income (loss)

45,526 32,702 33,066

1 unchanged sentence

( 10,650 ) ( 6,643 ) ( 7,731 )

Net income (loss) attributable to common shareholders

Net income attributable to common shareholders

$ 34,876 $ 26,059 $ 25,335

Net income (loss) per share attributable to common shareholders:

Net income per share attributable to common shareholders:

$ 0.65 $ 0.49 $ 0.47

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IMAX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S.

1 unchanged sentence

2025 2024 2023

Net income (loss)

$ 45,526 $ 32,702 $ 33,066

Other comprehensive loss before tax

Other comprehensive income (loss) before tax

Unrealized defined benefit plan actuarial gain (loss)

2,340 26 ( 75 )

Unrealized postretirement benefit plans actuarial (loss) gain

Unrealized postretirement benefit plans actuarial loss

( 243 ) ( 61 ) ( 37 )

Amortization of defined benefit and postretirement benefit plans net gain

Amortization of prior service cost — — 184

Unrealized net (loss) gain from cash flow hedging instruments

( 691 ) ( 740 ) ( 604 )

Unrealized net gain (loss) from cash flow hedging instruments

1,723 ( 3,455 ) 575

Realized net loss from cash flow hedging instruments

1,297 607 892

Foreign currency translation adjustments

4,329 ( 2,588 ) ( 3,907 )

Total other comprehensive loss before tax

Total other comprehensive income (loss) before tax

8,755 ( 6,211 ) ( 3,156 )

Income tax benefit (expense) related to other comprehensive loss

Income tax (expense) benefit related to other comprehensive income (loss)

( 1,234 ) 949 ( 181 )

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax

7,521 ( 5,262 ) ( 3,337 )

Comprehensive income (loss)

Comprehensive income

53,047 27,440 29,729

Comprehensive (income) loss attributable to non-controlling interests

Comprehensive income attributable to non-controlling interests

( 11,878 ) ( 5,898 ) ( 6,629 )

Comprehensive income (loss) attributable to common shareholders

Comprehensive income attributable to common shareholders

$ 41,169 $ 21,542 $ 23,100

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Operating Activities

Net income (loss)

$ 45,526 $ 32,702 $ 33,066

Adjustments to reconcile net income (loss) to cash provided by operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

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1,984 1,969 2,235

Credit loss (reversal) expense, net

Credit loss expense (reversal), net

696 ( 973 ) 1,759

Write-downs, including asset impairments

Write-downs, including goodwill and asset impairments

9,202 3,973 1,884

Deferred income tax benefit

Deferred income tax expense (benefit)

772 ( 5,631 ) ( 1,447 )

1 unchanged sentence

26,824 23,209 24,230

Unrealized foreign currency exchange (gain) loss

Unrealized foreign currency exchange gain

( 134 ) ( 2,770 ) ( 212 )

Realized and unrealized investment gain

Realized and unrealized investment loss (gain)

867 ( 127 ) ( 465 )

Induced conversion expense on settlement on convertible notes

Changes in assets and liabilities:

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( 28,425 ) ( 24,341 ) ( 18,000 )

Interest in film classified as a financial instrument

— — ( 4,731 )

Acquisition of other intangible assets

1 unchanged sentence

Proceeds from sale of equity securities — — 1,045

Acquisition of SSIMWAVE, net of cash and cash equivalents acquired

— — ( 15,939 )

Net cash used in investing activities

1 unchanged sentence

Financing Activities

Proceeds from issuance of convertible notes, net 243,125 — —

Redemption of capped calls related to convertible notes

Debt issuance costs related to convertible notes ( 24 ) — —

Cash paid related to repurchase of convertible notes

( 275,415 ) — —

Purchase of capped calls related to convertible notes ( 21,925 ) — —

Proceeds from revolving credit facility borrowings

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$ 401,420 $ 389,048 $ 376,715

Restricted share units vested, net of shares withheld for employee tax obligations

Restricted share units and performance stock units vested, net of shares withheld for employee tax obligations

12,483 14,033 13,701

3 unchanged sentences

— ( 8,575 ) ( 1,368 )

Issuance of common shares in acquisition

Balance, end of year

8 unchanged sentences

9,650 8,536 8,321

Restricted share units vested

Restricted share units and performance stock units vested

( 23,278 ) ( 20,122 ) ( 21,074 )

2 unchanged sentences

( 549 ) ( 505 ) ( 433 )

Settlement of capped calls related to 2026 convertible notes

Induced conversion impact on settlement of 2026 convertible notes

( 31,506 ) — —

Purchase of capped calls related to 2030 convertible notes

( 21,925 ) — —

Balance, end of year

9 unchanged sentences

( 274,675 ) ( 292,845 ) ( 293,124 )

Net income (loss) attributable to common shareholders

Net income attributable to common shareholders

34,876 26,059 25,335

4 unchanged sentences

( 239,967 ) ( 274,675 ) ( 292,845 )

Adjustments to accumulated other comprehensive (loss) income:

Adjustments to accumulated other comprehensive loss:

Balance, beginning of year

( 16,598 ) ( 12,081 ) ( 9,846 )

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax

6,293 ( 4,517 ) ( 2,235 )

6 unchanged sentences

10,664 6,621 7,793

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax

1,228 ( 745 ) ( 1,102 )

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Repurchase of common shares — ( 1,274,763 ) ( 1,636,027 )

Issuance of common shares in acquisition — — 160,547

Balance, end of year 53,921,676 52,946,200 53,260,276

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Top filmmakers, movie studios, artists, and creators utilize the cutting-edge visual and sound technology of IMAX to connect with audiences in innovative ways.

As a result, IMAX is among the most important and successful global distribution platforms.

The Company’s global content portfolio includes blockbuster films, both from Hollywood and local language film industries worldwide;

As a result, IMAX is among the most important and successful global distribution platforms for domestic and international tentpole films.

T he Company’s global content portfolio includes blockbuster films, both from Hollywood and local language film industries worldwide;

IMAX documentaries, both original and acquired (“IMAX Documentaries”);

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The Company does not own the locations in the IMAX network, except for one, and is not an exhibitor, but instead sells or leases the IMAX System for the distribution of specially formatted content to exhibitor customers along with a license to use its trademarks and ongoing maintenance services.

As of December 31, 2024, there were 1,807 IMAX Systems operating in 90 countries and territories, including 1,735 commercial multiplexes, 11 commercial destinations and 61 institutional locations in the Company’s global network.

As of December 31, 2025, there were 1,864 IMAX Systems operating in locations in 91 countries and territories, including 1,796 commercial multiplexes, 10 commercial destinations and 58 institutional locations in the Company’s global network.

This compares to 1,807 IMAX Systems operating in 90 countries and territories as of December 31, 2024 including 1,735 commercial multiplexes, 11 commercial destinations, and 61 institutional locations in the Company’s global network.

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The Company does not consolidate the other five film production companies because it does not have the power to direct their activities and it does not have the obligation to absorb the majority of the expected losses or the right to receive expected residual returns.

The Company uses the equity method of accounting for these entities, which continues to not be material to the Company’s Consolidated

Financial Statements.

The Company uses the equity method of accounting for these entities, which continues to not be material to the Company’s Consolidated Financial Statements.

A change in the value of an equity method investment that is other than temporary is recognized in the Consolidated Statements of Operations.

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(iii) expected credit losses on accounts receivable, financing receivables, and variable consideration receivables;

(iv) provisions for the write-down of excess and obsolete inventory;

(iv) provisions for the write-down of excess and obsolete inventories;

(v) the fair values of the reporting units used in assessing the recoverability of goodwill;

(vi) the cash flow projections used in testing the recoverability of long-lived assets such as the system equipment supporting joint revenue sharing arrangements;

(vi) the cash flow projections used in testing the recoverability of long-lived assets such as the system equipment supporting joint revenue sharing arrangements (“JRSA”) ;

(vii) the economic lives of the system equipment supporting joint revenue sharing arrangements;

(viii) the useful lives of intangible assets;

(viii) the useful lives of tangible and intangible assets;

(ix) the ultimate revenue forecasts used to test the recoverability of film assets;

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(xii) estimates related to the fair value and projected vesting of share-based payment awards;

(xiii) the valuation of deferred income tax assets;

(xiii) the valuation allowance of deferred income tax assets;

and (xiv) reserves related to uncertain tax positions.

Commencing in March 2022, in response to numerous sanctions imposed by the United States, Canada and the European Union on companies transacting in Russia resulting from ongoing conflict between Russia and Ukraine, the Company suspended its operations in Russia.

In 2022, the Company recorded provisions for potential credit losses against substantially all of its receivables in Russia due to uncertainties associated with the ongoing conflict.

These receivables relate to existing sale agreements as the Company is not party to any joint revenue sharing arrangements in these countries.

In addition, exhibitors in Russia and Ukraine were placed on nonaccrual status for maintenance revenue and finance income.

In 2023, due to the resumption of operations throughout Ukraine’s exhibition industry, as evidenced by the reopening of all IMAX Systems in Ukraine and payments received from exhibitor customers therein, the Company recognized maintenance revenue and finance income in connection with those theaters.

The Company closely monitors geopolitical conflicts (including any government sanctions imposed in response thereto) and its effects on the global economy and the Company.

Cash and Cash Equivalents

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The costs related to IMAX Systems under sale and sales-type lease arrangements are transferred from Inventories to Costs and Expenses Applicable to Revenues – Technology Sales in the period when the sale is recognized in the Consolidated Statements of Operations.

The costs related to IMAX Systems under joint revenue sharing arrangements (“JRSA”) are transferred from Inventories to assets under construction in Property, Plant and Equipment when allocated to a signed JRSA.

The Company records write-downs for excess and obsolete inventory based upon management’s judgments regarding future events and business conditions, including the anticipated installation dates for the current backlog of theater system contracts, contracts in negotiation, technological developments, growth prospects within the customers’ ultimate marketplace and anticipated market acceptance of the Company’s current and pending theater IMAX Systems.

The costs related to IMAX Systems under joint revenue sharing arrangements are transferred from Inventories to assets under construction in Property, Plant and Equipment when allocated to a signed JRSA.

The Company records write-downs for excess and obsolete inventories based upon management’s judgments regarding future events and business conditions, including the anticipated installation dates for the current backlog of theater system contracts, contracts in negotiation, technological developments, growth prospects within the customers’ ultimate marketplace and anticipated market acceptance of the Company’s current and pending theater IMAX Systems.

Finished goods inventories includes IMAX Systems for which title has passed to the Company’s customer in situations when the IMAX System has been delivered to the customer, but the criteria for revenue recognition were not met as of the balance sheet date.

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Ultimate revenues reflect management’s estimates of future revenue over a period not to exceed 10 years following the date of the film’s initial release.

The recoverability of the Company’s film assets is dependent upon the commercial acceptance of the underlying films and the resulting level of box office results and, in certain situations, ancillary revenues.

The recoverability of the Company’s film assets is dependent upon the commercial acceptance of the underlying films and the resulting level of global box office results and, in certain situations, ancillary revenues.

If management’s projections of future net cash flows resulting from the exploitation of a film indicate that the carrying value of the film asset is not recoverable, the film asset is written down to its fair value.

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Property, Plant and Equipment is grouped at the lowest level for which identifiable cash flows are largely independent and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset (or asset group) may not be recoverable.

In such situations, the asset (or asset group) is considered impaired when estimated future cash flows (undiscounted and without interest charges) resulting from the use of the asset (or asset group) and its eventual disposition are less than the carrying value of the asset (or asset group).

In such situations, the asset (or asset group) is considered impaired when estimated future cash flows (undiscounted and

without interest charges) resulting from the use of the asset (or asset group) and its eventual disposition are less than the carrying value of the asset (or asset group).

In such situations, the asset (or asset group) is written down to its fair value, which is the present value of the estimated future cash flows.

Factors that are considered when evaluating such assets for impairment include a current expectation that it is more likely than not that the long-lived asset will be sold significantly before the end of its useful life, a significant decrease in the market price of the long-lived asset, and a significant change in the extent or manner in which the long-lived asset is being used.

Other Assets principally include lease incentives provided to certain exhibitor customers under JRSAs classified as an operating lease, as well as sales commissions and other deferred selling expenses that directly relate to the acquisition of the revenue generating contract and are incremental to the Company’s other expenses.

Other Assets principally include lease incentives provided to certain exhibitor customers under JRSAs, as well as sales commissions and other deferred selling expenses that directly relate to the acquisition of the revenue generating contract and are incremental to the Company’s other expenses.

To a much lesser extent, Other Assets also includes various investments and foreign currency derivatives.

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Goodwill is not amortized, but is tested annually for impairment at the reporting unit level in the fourth quarter of the year and between annual tests if indicators of potential impairment exist.

These indicators could include a decline in the Company’s stock price and market capitalization, a significant change in the outlook for the reporting unit’s business, including projections of future box office results and IMAX System installations, lower than expected operating results, increased competition, legal factors, or the sale or disposition of a significant portion of a reporting unit.

For reporting units with goodwill, an impairment loss is recognized for the amount by which the reporting unit’s carrying value, including goodwill, exceeds its fair value.

The carrying value of each reporting unit is based on a systematic and rational allocation of certain assets and liabilities.

The fair value of each reporting unit is assessed using a discounted cash flow model based on management’s current short-term forecast and estimated long-term projections, against which various sensitivity analyses are performed.

These indicators could include a decline in the Company’s stock price and market capitalization, a significant change in the outlook for the reporting unit’s business, including projections of future global box office results and IMAX System installations, lower than expected operating results, increased competition, legal factors, or the sale or disposition of a significant portion of a unit.

For reporting units with goodwill, an impairment loss is recognized for the amount by which the unit’s carrying value, including goodwill, exceeds its fair value.

The carrying value of each unit is based on a systematic and rational allocation of certain assets and liabilities.

The fair value of each unit is assessed using a discounted cash flow model based on management’s current short-term forecast and estimated long-term projections, against which various sensitivity analyses are performed.

The discount rates used in the cash flow model are derived based on the Company’s estimated weighted average cost of capital.

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Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose.

incurred during the preliminary project and post-implementation stages are charged to expense.

Costs incurred during the preliminary project and post-implementation stages are charged to expense.

These capitalized costs are amortized on a straight-line basis over the estimated useful life.

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Tax benefits that meet the more likely than not recognition threshold are measured using a probability weighting of the largest amount of tax benefit that has greater than 50% likelihood of being realized upon settlement.

Whether the more likely than not recognition threshold is met for a particular tax benefit is a matter of judgment based on the individual facts and circumstances evaluated in light of all available evidence as of the balance sheet date.

Whether the more likely than not recognition

threshold is met for a particular tax benefit is a matter of judgment based on the individual facts and circumstances evaluated in light of all available evidence as of the balance sheet date.

Although management believes that the Company has adequately accounted for its uncertain tax positions, tax audits can result in subsequent assessments where the ultimate resolution may result in the Company owing additional taxes above what was originally recognized in its financial statements.

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The Company has established standalone prices for the System Obligation and maintenance and extended warranty services, as well as for film license arrangements.

The Company uses an adjusted market assessment approach for separate performance obligations that do not have standalone selling prices or third-party evidence of estimated standalone selling prices.

The Company uses an adjusted market assessment and cost-plus approaches for separate performance obligations that do not have standalone selling prices or third-party evidence of estimated standalone selling prices.

The Company considers multiple factors including its historical pricing practices, product class, market competition and geography.

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The arrangement for the sale of an IMAX System includes indexed minimum payment increases over the term of the arrangement, as well as the potential for additional payments owed by the exhibitor customer if certain minimum box office receipt thresholds are exceeded.

In addition, hybrid sales arrangements include amounts owed by the exhibitor customer based on a percentage of their box office receipts over the term of the arrangement.

In addition, sales arrangements include amounts owed by the exhibitor customer based on a percentage of their box office receipts over the term of the arrangement.

These contract provisions are considered to be variable consideration.

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The initial revenue recognized in a sales arrangement consists of payments received before and in connection with the installation of the IMAX System and the present value of any future payments, including ongoing fixed minimum payments, which are subject to indexed increases over the term of the arrangement, and potential additional payments owed by the customer if certain minimum box office receipt thresholds are exceeded.

In addition, hybrid sales arrangements include amounts owed by the customer based on a percentage of their box office receipts over the term of the arrangement.

In addition, sales arrangements include amounts owed by the customer based on a percentage of their box office receipts over the term of the arrangement.

Potential payments based on the future box office receipts of the customer are considered to be variable consideration.

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Variable consideration is recognized subject to appropriate constraints to avoid a significant reversal of revenue in future periods.

The Company reviews its variable consideration assets on at least a quarterly basis considering recent box office performance and, when applicable, updated box office projections for future periods.

The Company reviews its variable consideration assets on at least a quarterly basis considering recent global box office performance and, when applicable, updated global box office projections for future periods.

The relevant accounting guidance identifies the following examples of situations when constraining the amount of variable consideration is appropriate:

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As discussed above, the Company’s significant streams of variable consideration relate to arrangements for the sale of IMAX Systems which include indexed minimum payment increases over the term of the arrangement, as well as the potential for additional payments owed by the customer if certain minimum box office receipt thresholds are exceeded.

In addition, hybrid sales arrangements include variable consideration based on a percentage of the customer’s box office receipts over the term of the arrangement.

In addition, sales arrangements include variable consideration based on a percentage of the customer’s box office receipts over the term of the arrangement.

Variable consideration related to indexed minimum payment increases is outside of the Company’s control, but the movement in the rates is historically well documented and economic trends in inflation are easily accessible.

2 unchanged sentences

Variable consideration related to the level of the customer’s box office receipts is outside of the Company’s control as it is dependent upon the future commercial success of the films released to the IMAX network.

The estimated variable consideration

initially recognized by the Company is based on management’s box office projections for the location, which are developed using historical box office data for that location and, if necessary, comparable locations and territories.

The estimated variable consideration initially recognized by the Company is based on management’s box office projections for the location, which are developed using historical box office data for that location and, if necessary, comparable locations and territories.

Using this data, management applies its understanding of these exhibition markets to estimate the most likely amount of variable consideration to be earned over the term of the arrangement.

Management then applies a constraint to this estimate by reducing the projection by a percentage factor for locations or markets with no or limited historical box office experience.

In cases where direct historical experience can be observed, average historical box office results, eliminating significant outliers, is used.

In cases where direct historical experience can be observed, average

historical box office results, eliminating significant outliers, is used.

The resulting amount of variable consideration is then recorded at its present value as of the date of recognition using a risk-weighted discount rate.

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Impairment losses, if any, are also included in Costs and Expenses Applicable to Revenues – Technology Rentals.

Sales commissions related to these arrangements are deferred and recognized as Costs and Expenses Applicable to Revenues – Technology Rentals in the month they are earned by the salesperson, which is typically the month of installation.

Commissions related to these arrangements are deferred and recognized as Costs and Expenses Applicable to Revenues – Technology Rentals in the month they are earned by the salesperson, which is typically the month of installation.

Direct advertising and marketing costs for each location are charged to Costs and Expenses Applicable to Revenues – Technology Rentals as incurred.

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Terminations by default are situations when a customer does not meet the payment obligations under an arrangement and the Company retains the amounts paid by the customer.

Under terminations by default, the Company evaluates the deferred revenue for potential breakage in accordance with ASC 606.

Breakage is recognized as revenue when the Company concludes that the customer’s likelihood of exercising its remaining rights is remote.

Under a consensual buyout, the Company and the customer agree, in writing, to a settlement and to release each other of any further obligations under the arrangement or an arbitrated settlement is reached.

Any initial payments retained or additional payments received by the Company are recognized as revenue when the settlement arrangements are executed and the cash is received, respectively.

Under a consensual buyout, any initial payments retained or additional payments received by the Company are recognized as revenue when the settlement arrangements are executed and the cash is received, respectively.

In addition, the Company may agree with a customer to convert its obligations for one type of IMAX System configuration that has not yet been installed to an arrangement to acquire or lease a different type of IMAX System.

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Most of the Company’s leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more.

The Company has determined that it is reasonably certain that the renewal options on its warehouse leases will be exercised based on previous history, its current understanding of future business needs, and its level of investment in the leasehold improvements, among other factors.

The Company has the ability to renew its leases through either extension options or mutual agreement.

The depreciable lives of ROU assets and related leasehold improvements are limited by the expected lease term.

6 unchanged sentences

Research and development costs, which are expensed as incurred, primarily include projector and sound parts, labor, consulting fees, allocation of overheads, and other related materials which pertain to the Company’s development of new products and services.

Research and development costs pertaining to fixed and intangible assets that have alternative future uses are capitalized and amortized under their related policies.

Development costs pertaining to fixed and intangible assets that have alternative future uses are capitalized and amortized under their related policies.

Foreign Currency Translation

6 unchanged sentences

Changes in the fair value (i.e., gains or losses) are recognized in the Consolidated Statements of Operations except for derivatives designated and qualifying as foreign currency hedging instruments.

For foreign currency hedging instruments, the gain or loss related to the effective portion of the hedge of a forecasted transaction is reported within Other Comprehensive (Loss) Income and reclassified to the Consolidated Statements of Operations when the forecasted transaction occurs.

For foreign currency hedging instruments, the gain or loss related to the effective portion of the hedge of a forecasted transaction is reported within Other Comprehensive Income (Loss) and reclassified to the Consolidated Statements of Operations when the forecasted transaction occurs.

Any ineffective portion is recognized immediately in the Consolidated Statements of Operations.

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The Company no longer issues stock options as a form of employee compensation.

(Refer to “Capital Stock — Shared-Based Compensation ” in Note 16 for the assumptions used to determine the fair value of the Company’s stock options.)

(Refer to “Capital Stock — Share-Based Compensation ” in Note 16 for the assumptions used to determine the fair value of the Company’s stock options.)

Restricted Share Units

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The achievement of the Adjusted EBITDA and TSR targets in these PSUs is determined over a three-year performance period.

At the conclusion of the three-year performance period, the number of PSUs that ultimately vest can range from 0 % to a maximum vesting opportunity of 175 % of the initial Adjusted EBITDA PSU award or 150 % of the initial TSR PSU award depending upon actual performance versus the established Adjusted EBITDA and TSR targets, respectively.

For PSUs granted as of December 31, 2025, the number of PSUs that ultimately vest can range from 0 % to a maximum vesting opportunity of 175 % of the initial Adjusted EBITDA PSU award or 150 % of the initial TSR PSU award depending upon actual performance versus the established Adjusted EBITDA and TSR targets, respectively, at the end of the three-year performance period.

The Company’s PSUs are classified as equity.

The grant date fair value of PSUs with Adjusted EBITDA targets is equal to the closing price of the Company’s common shares on the date of grant or the average closing price of the Company’s common shares for five days prior to the date of grant.

The grant date fair value of PSUs with TSR targets is determined on the grant date using a Monte Carlo simulation, which is a valuation model that considers the likelihood of achieving the TSR targets embedded in the award (“Monte Carlo Model”).

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The amount and timing of compensation expense recognized for PSUs with Adjusted EBITDA targets is dependent upon management’s assessment of the likelihood and timing of achieving these targets.

If, as a result of management’s assessment, it is projected that a greater number of PSUs will vest than previously anticipated, a life-to-date adjustment to increase compensation

expense is recorded in the period such determination is made.

If, as a result of management’s assessment, it is projected that a greater number of PSUs will vest than previously anticipated, a life-to-date adjustment to increase compensation expense is recorded in the period such determination is made.

Conversely, if, as a result of management’s assessment, it is projected that a lower number of PSUs will vest than previously anticipated, a life-to-date adjustment to decrease compensation expense is recorded in the period such determination is made.

5 unchanged sentences

The Company has a defined benefit pension plan, the Supplemental Executive Retirement Plan (the “SERP”).

As the Company’s SERP is unfunded, as of December 31, 2024, a liability was recognized for the benefit obligation.

As the Company’s SERP was unfunded, as of December 31, 2025, a liability was recognized for the benefit obligation.

Assumptions used in computing the defined benefit obligations are reviewed annually by management in consultation with its actuaries and adjusted for current conditions.

Actuarial gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefits cost are recognized as a component of Other Comprehensive (Loss) Income.

Amounts recognized in Accumulated Other Comprehensive Loss including unrecognized actuarial gains or losses and prior service costs are adjusted as they are subsequently recognized in the Consolidated Statements of Operations as components of net periodic benefit cost.

Prior service costs resulting from the pension plan inception or amendments are amortized over the expected future service life of the employees, cumulative actuarial gains and losses in excess of 10 % of the projected benefit obligation are amortized over the expected average remaining service life of the employees, and current service costs are expensed when earned.

The remaining weighted average future service life of the employee used in computing the defined benefit obligation for the year ended December 31, 2024 was one year .

The remaining weighted average future service life of the employee used in computing the defined benefit obligation for the year ended December 31, 2025 was three years .

For defined contribution pension plans, required contributions by the Company are recorded as an expense within Selling, General and Administrative Expenses in the Company’s Consolidated Statements of Operations.

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Adoption of New Accounting Policies

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-06, “Disclosure Improvements:

Codification Amendments in response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”).

ASU 2023-06 incorporates into U.S.

GAAP certain presentation and disclosure requirements currently included in the SEC’s regulations.

Each amendment will become effective prospectively from the date the SEC withdrawals the corresponding SEC regulatory requirement.

The Company adopted ASU 2023-06 on January 1, 2024.

The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

The purpose of ASU 2023-07 is to enhance the interim disclosure requirements by more closely aligning them with the annual requirements.

ASU 2023-07 requires interim and annual disclosures to

include information about the Company’s significant segment expenses.

The Company adopted ASU 2023-07 for the Company’s year ended December 31, 2024.

The adoption of this ASU impacted the Company’s segment disclosures in Note 20.

Recently Issued FASB Accounting Standard Codification Updates Not Yet Adopted

In December 2023, the FASB issued Accounting Standard Update No.

Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

The amendments in ASU 2023-09 improve the transparency of income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation, and (ii) income taxes paid disaggregated by jurisdiction.

ASU 2023-09 will be effective for the Company’s year ended December 31, 2025.

The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

In November 2024, the FASB issued Accounting Standard Update No.

The amendments in ASU 2023-09 are intended to improve the transparency of income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation, and (ii) income taxes to be paid disaggregated by jurisdiction.

The Company adopted ASU 2023-09 for the year ended December 31, 2025 on a prospective basis.

The adoption of this ASU impacted the Company’s income tax disclosures in Note 11 of these Consolidated Financial Statements.

Induced Conversions of Convertible Debt Instruments

In November 2024, the FASB issued ASU Update No.

2024-04, “Debt - Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”).

ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The Company adopted ASU 2024-04 for the Company’s year ended December 31, 2025.

The adoption of this ASU impacted the accounting for and disclosure of the Company’s convertible debt instruments, as disclosed in Note 13 of these Consolidated Financial Statements.

Recently Issued FASB Accounting Standard Codification Updates Not Yet Adopted

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” (“ASU 2024-03”).

The amendments in ASU 2024-03 improve the transparency of expenses by nature disclosures requiring (i) disclosures with disaggregation of each expense line item into specific categories, (ii) qualitative disclosures of expenses.

ASU 2024-03 will be effective for the Company’s year ended December 31, 2027.

The amendments in ASU 2024-03 expand disclosures about specific expense categories presented on the face of the income statement and addresses requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) in commonly presented expense captions (such as cost of sales, selling, general and administrative expenses).

ASU 2024-03 is effective for interim periods within annual reporting periods beginning after December 15, 2027 with early adoption permitted.

The Company is in the process of evaluating the impact of ASU 2024-03 on its Consolidated Financial Statements.

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU No.

2025-05, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”).

The amendments in ASU 2025-05 provide a practical expedient that allows entities to assume current economic conditions as of the balance sheet date will remain unchanged throughout the reasonable and supportable forecast period when estimating expected credit losses for eligible financial assets, including trade receivables and contract assets.

ASU 2025-05 is effective for fiscal periods beginning after December 15, 2025, including interim periods within those fiscal years.

The Company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU No.

2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”).

The amendments in ASU 2025-06 clarify and refine the criteria for capitalizing costs related to internal-use software.

Under the new guidance, capitalization is permitted when both of the following conditions are met:

(i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

ASU 2025-06 is effective for fiscal periods beginning after December 15, 2027, and interim periods thereafter.

The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

Hedge Accounting Improvements

In November 2025, the FASB issued ASU No.

2025-09, “Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements” (“ASU 2025-09”).

The amendments in ASU 2025-09 more closely align hedge accounting with the economics of an entity’s risk management activities for (i) similar risk assessment for cash flow hedges, (ii) hedging forecasted interest payment on choose-your-rate debt instruments, (iii) cash flow hedges of nonfinancial forecasted transactions, (iv) net written options as hedging instruments, and (v) foreign-currency-denominated debt instrument as hedging instrument and hedged item.

ASU 2025-09 is effective for fiscal periods beginning after December 15, 2026, and interim periods thereafter.

The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

Accounting for Government Grants Received by Business Entities

In December 2025, the FASB issued ASU No.

2025-10, “Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities” (“ASU 2025-10”).

The amendments in ASU 2025-10 establishes accounting and guidance for a government grant received by an entity.

Under the new guidance, a government grant is not recognized until it is probable that an entity will comply with the conditions attached to the grant and the grant will be received, and recognition guidance is met.

A grant related to an asset is recognized on the balance sheet as an entity incurs the related costs for which the grant is intended to compensate.

ASU 2025-10 is effective for fiscal periods beginning after December 15, 2028, and interim periods thereafter.

The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

The Company considers the applicability and impact of all recently issued FASB accounting standard codification updates.

Accounting standard updates that are not noted above were assessed and determined to be not applicable or not significant to the Company’s Consolidated Financial Statements for the year ended December 31, 2024.

ASUs that are not noted above were assessed and determined to be not applicable or not significant to the Company’s Consolidated Financial Statements for the year ended December 31, 2025.

The ability of the Company to collect its receivables is principally dependent on the viability and solvency of individual theater operators which is significantly influenced by consumer behavior and general economic conditions.

Theater operators, or other customers, may experience financial difficulties that could result in them being unable to fulfill their payment obligations to the Company.

In order to mitigate the credit risk associated with its receivables, management performs an initial credit evaluation prior to entering into an arrangement with a customer and then regularly monitors the credit quality of each customer through an analysis of collections history and aging.

In order to mitigate the credit risk associated with the Company’s receivables, management performs an initial credit evaluation prior to entering into an arrangement with a customer and then regularly monitors the credit quality of each customer through an analysis of collections history and aging.

This monitoring process includes meetings on at least a monthly basis to identify credit concerns and potential changes in credit quality classification.

14 unchanged sentences

During the period when the accretion of Finance Income is suspended for Financing Receivables, any payments received from a customer are applied against the outstanding balance owed.

If payments are sufficient to cover any unreserved receivables, a reversal

of the provision is recorded to the extent of the residual cash received.

If payments are sufficient to cover any unreserved receivables, a reversal of the provision is recorded to the extent of the residual cash received.

Once the collectability issues are resolved and the customer has returned to being in good standing, the Company will resume recognition of Finance Income.

7 unchanged sentences

The impacts of inflation, and rising interest rates may impact future credit losses.

The Company will continue to monitor economic trends and conditions and portfolio performance and adjust its allowance for credit loss accordingly.

Refer to “Summary of Significant Accounting Policies — Estimates and Assumptions ” in Note 2 for information regarding theater operators in Russia and Ukraine.

The Company will

continue to monitor economic trends and conditions and portfolio performance and adjust its allowance for credit loss accordingly.

Refer to “Summary of Significant Accounting Policies — Estimates and Assumptions ” in Note 2.

Accounts Receivable

2 unchanged sentences

The following tables summarize the activity in the allowance for credit losses related to Accounts Receivable for the years ended December 31, 2025 and 2024:

Years Ended December 31, 2024

Year Ended December 31, 2025

(In thousands of U.S.

2 unchanged sentences

$ 11,678 $ 1,017 $ 583 $ 13,278

Current year (reversal) provision, net

Current year provision (reversal), net

581 617 ( 139 ) 1,059

2 unchanged sentences

Foreign exchange

143 ( 3 ) — 140

Ending balance

$ 12,170 $ 1,310 $ 444 $ 13,924

Years Ended December 31, 2023

Year Ended December 31, 2024

(In thousands of U.S.

2 unchanged sentences

$ 14,355 $ 616 $ 1,006 $ 15,977

Current year provision (reversal), net

Current year (reversal) provision, net

( 2,696 ) 404 17 ( 2,275 )

2 unchanged sentences

Foreign exchange

( 335 ) ( 6 ) — ( 341 )

Ending balance

$ 11,678 $ 1,017 $ 583 $ 13,278

For the year ended December 31, 2025, the Company’s allowance for current expected credit losses related to Accounts Receivable increased by $ 0.6 million, largely reflective of specific provisions related to certain exhibitors in Greater China for which the Company determined there was an increased risk of non-collection of aged receivables.

For the year ended December 31, 2024, the Company’s allowance for current expected credit losses related to Accounts Receivable decreased by $ 2.7 million, largely the result of an increase in collections of outstanding balances as exhibition partners continue to improve their financial position post pandemic.

For the year ended December 31, 2023, the Company’s allowance for current expected credit losses related to Accounts Receivable increased by $ 1.9 million, largely the result of an increase in aged receivables.

In the fourth quarter of 2023, the $ 1.5 million COVID-19 reserve for China was released of which $ 0.3 million related to Accounts Receivable and $ 1.2 million to Financing Receivables.

Financing Receivables

42 unchanged sentences

The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis and include both billed and unbilled amounts.

The prior year table has been updated to conform to the current year theater-by-theater presentation.

(In thousands of U.S.

26 unchanged sentences

The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis and include both billed and unbilled amounts.

The prior year table has been updated to conform to the current year theater-by-theater presentation.

(In thousands of U.S.

44 unchanged sentences

The following tables provide information about the Company’s net investment in leases and financed sales receivables with billed amounts past due for which it continued to accrue finance income as of December 31, 2025 and 2024.

The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis and include both billed and unbilled amounts.

As of December 31, 2025

37 unchanged sentences

$ 664 $ 10,161

Current year provision, net

Current year reversal, net

( 207 ) ( 60 )

Foreign exchange

7 unchanged sentences

$ 453 $ 9,617

Current year reversal, net

( 61 ) ( 1,644 )

Current year provision, net

Foreign exchange

1 unchanged sentence

$ 664 $ 10,161

For the year ended December 31, 2024, the Company’s allowance for current expected credit losses related to its net investment in leases and financed sales receivables increased by $ 0.8 million, which reflects the Company’s credit quality assessment of future minimum payments due from its exhibition customers.

For the year ended December 31, 2023, the Company’s allowance for current expected credit losses related to its net investment in leases and financed sales receivables decreased by $ 1.7 million.

This decrease is principally due to the release of China’s COVID-19 pandemic provision of $ 1.5 million, of which $ 1.2 million relates to its net investment in leases and financed sales receivables.

For the years ended December 31, 2025 and 2024, the Company’s allowance for current expected credit losses related to its net investment in leases and financed sales receivables decreased by $ 0.2 million and increased by $ 0.8 million, respectively, which reflects the Company’s credit quality assessment of future minimum payments due from its exhibition customers.

Variable Consideration Receivables

6 unchanged sentences

Current year (reversal) provision, net

( 96 ) ( 513 )

Foreign exchange

Ending balance

For the year ended December 31, 2024, the Company’s allowance for current expected credit losses related to Variable Consideration Receivables decreased $ 0.5 million as part of the Company’s assessment of the risk profile of the balance.

For the year ended December 31, 2023, the Company’s allowance for current expected credit losses related to Variable Consideration Receivables remained consistent at $ 0.6 million.

For the year ended December 31, 2025, the Company’s allowance for current expected credit losses related to Variable Consideration Receivables remained consistent.

For the year ended December 31, 2024, the Company’s allowance for current expected credit losses related to Variable Consideration Receivables decreased by $ 0.5 million as part of the Company’s assessment of the risk profile of the balance.

Lease Arrangements

3 unchanged sentences

Leases with an initial term of less than 12 months are not recorded on the Consolidated Balance Sheets and the related lease expense is recognized on a straight-line basis over the lease term.

Most of the Company’s leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more.

The Company has the ability to renew its leases through either extension options or mutual agreement.

The incremental borrowing rate used in the calculation of the Company’s lease liabilities is based on the location of each leased property.

None of the Company’s leases include options to purchase the leased property.

None of the Company’s leases include options to purchase the leased

The depreciable lives of right-of-use assets and related leasehold improvements are limited by the expected lease term.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company rents or subleases certain office space to third parties, which have a remaining term of less than 12 months and are not expected to be renewed.

The Company has a finance lease arrangement involving equipment used to facilitate the delivery of live events to certain IMAX locations.

2 unchanged sentences

The incremental borrowing rate used in the calculation of the lease liabilities is based on the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term.

For the years ended December 31, 2024, 2023, and 2022 the components of lease expense recorded within Selling, General and Administrative Expenses were as follows:

For the years ended December 31, 2025, 2024, and 2023 the components of lease expense, which are primarily recorded within Selling, General and Administrative Expenses, were as follows:

Years Ended December 31,

34 unchanged sentences

Accrued and other liabilities

(1) Recorded net of $ nil (2023 — $ nil ) upfront payment made upon execution of the finance lease arrangement.

As of December 31, 2025 and 2024, the weighted-average remaining lease term and weighted-average interest rate associated with the Company’s leases were as follows:

10 unchanged sentences

(In thousands of U.S.

Thereafter 278

Total lease payments

16 unchanged sentences

The Company’s JRSAs are typically non-cancellable for 10 years or longer with renewal provisions.

Title to the IMAX System under a joint revenue sharing arrangement generally does not transfer to the customer.

The Company’s joint revenue sharing arrangements do not contain a guarantee of residual value at the end of the lease term.

Title to the IMAX System under a JRSA generally does not transfer to the customer.

The Company’s JRSAs do not contain a guarantee of residual value at the end of the lease term.

The customer is required to pay for executory costs such as insurance and taxes and is required to pay the Company for maintenance and an extended warranty throughout the term.

2 unchanged sentences

(In thousands of U.S.

Joint Revenue Sharing arrangements

2025 $ 2,935 $ 25

Thereafter 14,899

$ 30,890 $ 25

(Refer to Note 4 for additional information related to the net investment in leases related to the Company’s sales-type lease arrangements.)

1 unchanged sentence

The arrangement for the sale of an IMAX System includes indexed minimum payment increases over the term of the arrangement, as well as the potential for additional payments owed by an exhibitor customer if certain minimum box office receipt thresholds are exceeded.

In addition, hybrid sales arrangements include amounts owed by an exhibitor customer based on a percentage of their box office receipts over the term of the arrangement.

In addition, sales arrangements include amounts owed by an exhibitor customer based on a percentage of their box office receipts over the term of the arrangement.

These contract provisions are considered to be variable consideration.

13 unchanged sentences

Changes in variable consideration estimates

3,040 2,327 —

Changes in allowance for credit losses (see Note 4)

9 unchanged sentences

$ 32,505 $ 32,840

As of December 31, 2024, Inventories included finished goods of $ 1.8 million (December 31, 2023 — $ 0.6 million) for which title had passed to the customer, but the criteria for revenue recognition were not met as of the balance sheet date.

The following table summarizes the activity for the Company’s inventory valuation allowance account for the years ended December 31, 2024, 2023, and 2022:

As of December 31, 2025, Inventories included balances of $ 1.0 million (December 31, 2024 — $ 1.8 million) for which title had passed to the customer, but the criteria for revenue recognition were not met as of the balance sheet date.

The following table summarizes the activity for the Company’s inventories valuation allowance account for the years ended December 31, 2025, 2024, and 2023:

Years Ended December 31,

8 unchanged sentences

$ 5,765 $ 5,532 $ 5,416

(1) Excludes an expense of $ 0.1 million charged directly to the Consolidated Statements of Operations during the year ended December 31, 2024 (2023 — expense of $ 0.5 million;

2022 — recovery of $ 0.2 million).

(1) Excludes an expense of $ nil charged directly to the Consolidated Statements of Operations during the year ended December 31, 2025 (2024 — expense of $ 0.1 million;

2023 — expense of $ 0.5 million).

(2) Includes the write-off of amounts previously charged to valuation allowance.

11 unchanged sentences

The amount of participation payments owed to third parties related to co-produced films as of December 31, 2025 was $ 5.3 million (December 31, 2024 — $ 5.2 million) and was recorded on the Consolidated Balance Sheets within Accrued and Other Liabilities.

In 2024, the Company recognized film asset write-downs of less than $ 0.1 million (2023 — $ 0.4 million;

In 2025, the Company recognized film asset write-downs of $ 0.2 million (2024 — less than $ 0.1 million;

2023 — $ 0.4 million).

61 unchanged sentences

$ 24,820 $ 22,441

Income (loss) Before Taxes by Jurisdiction

Income (loss) before taxes by tax jurisdiction for the years ended December 31, 2024, 2023, and 2022 consisted of the following:

(1) During the year ended December 31, 2025, the Company recorded an impairment charge of $ 1.0 million on the investment in equity securities.

(Refer to “Financial Instruments — Investments in Equity Securities” in Note 21 for additional information.)

Income Before Taxes by Jurisdiction

Income before taxes by tax jurisdiction for the years ended December 31, 2025, 2024, and 2023 consisted of the following:

Years Ended December 31,

2 unchanged sentences

Canada $ ( 2,032 ) $ ( 14,240 ) $ ( 13,366 )

United States

65,325 51,938 59,483

China 29,660 34,433 11,466

Ireland 15,951 19,371 24,070

Other 1,302 484 6,037

Total $ 63,293 $ 37,698 $ 46,117

(1) Prior year amounts have been revised to conform to the current presentation with one category for Foreign income.

No amounts have been reclassified between Canada and Foreign.

Income Tax Expense

4 unchanged sentences

Income tax expense – current (1) :

Canada $ ( 1,352 ) $ ( 3,102 ) $ ( 1,149 )

United States

$ ( 609 ) $ 700 $ 58

China ( 5,109 ) ( 3,634 ) ( 4,437 )

Ireland ( 1,933 ) ( 3,481 ) ( 2,802 )

Other ( 857 ) ( 2,643 ) ( 3,519 )

( 467 ) 537 45

( 15,919 ) ( 11,864 ) ( 14,601 )

( 16,995 ) ( 10,627 ) ( 14,498 )

Income tax (expense) benefit – deferred (1) :

697 ( 1,920 ) 1,390

United States

535 ( 1,472 ) 1,066

( 2,004 ) 9,023 ( 1,009 )

Ireland 5,406 ( 2,040 ) ( 1,562 )

Other 19 ( 73 ) 60

( 772 ) 5,631 1,447

$ ( 17,767 ) $ ( 4,996 ) $ ( 13,051 )

(1) Prior year amounts have been revised to conform to the current presentation to present the information into Federal, Provincial, and Foreign Categories.

(2) A valuation allowance is recorded in jurisdictions where management has determined, based on the weight of all available evidence, both positive and negative, that a valuation allowance for deferred tax assets is required.

For the year ended December 31, 2024, the Company recorded a $ 3.5 million net increase (2023 — net decrease of $ 0.7 million) in the valuation allowance against its deferred tax assets in Canada.

The $ 3.5 million net increase in the valuation allowance recorded in 2024 is reflected within Income Tax Expense in the Company’s Consolidated Statements of Operations.

(2) The Company’s deferred tax liability of $ 12.5 million as of December 31, 2024 (2023 — $ 12.5 million) relates to the estimated applicable foreign withholding taxes associated with historical earnings that were not indefinitely reinvested which will become payable upon the repatriation of any such earnings.

During the year ended December 31, 2024, $ nil (2023 — $ 24.0 million) of historical earnings from a subsidiary in China were distributed and as a result, $ nil (2023 — $ 2.4 million) of foreign withholding taxes were paid to the relevant tax authorities.

(3) For the year ended December 31, 2024, Income Tax Expense excludes a tax benefit of $ 0.9 million included in Other Comprehensive Income (Loss) (2023 — expense of $ 0.2 million;

For the year ended December 31, 2025, the Company recorded a $ 5.7 million net decrease (2024 — net increase of $ 3.5 million, 2023 — net decrease of $ 0.7 million) in the valuation allowance against its deferred tax assets in Canada.

Of the $ 5.7 million net decrease in the valuation allowance recorded in 2025, a $ 6.0 million decrease is reflected within Income Tax Expense in the Company’s Consolidated Statements of Operations, and a $ 0.3 million increase is reflected directly on the Consolidated Balance Sheets.

(3) For the year ended December 31, 2025, Income Tax Expense excludes a tax expense of $ 1.2 million included in Other Comprehensive Income (2024 — benefit of $ 0.9 million;

2023 — expense of $ 0.2 million).

Reconciliation of Income Tax Expense to Statutory Rates

For the years ended December 31, 2024, 2023, and 2022, the Company’s effective tax rate and income tax expense differs from the combined Canadian federal and provincial statutory income tax rates due to the following factors:

Years Ended December 31,

Reconciliation of Income Tax Expense to Statutory Rate

For the years ended December 31, 2025, 2024, and 2023, the Company’s effective tax rate and income tax expense differs from the Canadian federal statutory income tax rates due to the following factors:

Year Ended December 31,

(In thousands of U.S.

Dollars, except rates)

Income tax expense at Canadian federal statutory tax rate (1)

( 9,494 ) 15.0 %

Adjustments resulting from:

Ontario provincial tax expense

Foreign tax effects

Withholding taxes ( 3,031 ) 4.8 %

Other statutory tax rate differences

( 553 ) 0.9 %

Changes to tax liabilities resulting from tax return adjustments

Statutory tax rate difference

Increase in valuation allowance

( 683 ) 1.1 %

Changes to tax liabilities resulting from tax return adjustments ( 554 ) 0.9 %

Statutory tax rate difference

( 4,647 ) 7.3 %

Withholding taxes

( 986 ) 1.6 %

United States

Statutory tax rate difference

( 275 ) 0.4 %

Changes to tax liabilities resulting from tax return adjustments 537 ( 0.8 %)

Increase in valuation allowance

( 230 ) 0.4 %

State and local income taxes

( 606 ) 1.0 %

Decrease in valuation allowance

6,896 ( 10.9 %)

Stock based compensation

1,706 ( 2.7 %)

Non-deductible goodwill impairment

( 1,841 ) 2.9 %

Non-deductible premium paid on refinancing

( 4,014 ) 6.3 %

Tax gain on settlement of capped call

( 1,536 ) 2.4 %

Changes to tax reserves

( 769 ) 1.2 %

1,180 ( 1.9 %)

Changes to deferred tax liabilities resulting from prior year tax return adjustments

( 963 ) 1.5 %

Other items included in tax benefit

Income tax expense

$ ( 17,767 ) 28.1 %

(1) The Company’s Canadian federal statutory tax rate of 15 % is comprised of the basic Part I federal tax rate of 38 %, netting to 15 % after the federal tax abatement and general tax reduction.

The reconciliation of taxes at the federal statutory rate to the income tax expense for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

Years Ended December 31,

(In thousands of U.S.

Dollars, except rates)

Income tax (expense) benefit at combined statutory rates (1)

Income tax expense at combined statutory rates (1)

$ ( 9,990 ) 26.5 % $ ( 12,221 ) 26.5 %

Adjustments resulting from:

(Increase) decrease in valuation allowance

Decrease (increase) in valuation allowance

( 3,481 ) 9.2 % 732 ( 1.6 %)

11 unchanged sentences

4,037 ( 10.7 ) % — — %

Other items included in tax benefit (expense)

Other items included in tax benefit

267 ( 0.7 %) 257 ( 0.6 %)

2 unchanged sentences

(1) The Company’s Canadian corporate tax rate of 26.5 % is comprised of the basic Part I federal tax rate of 38 %, netting to 15 % after the federal tax abatement and general tax reduction, plus the additional Ontario provincial tax rate of 11.5 %.

During the year, the Company completed an internal asset sale to more closely align intellectual property rights with its operations.

During 2024, the Company completed an internal asset sale to more closely align intellectual property rights with its operations.

The tax expense on the capital gains was offset by deferred tax benefits resulting in a net tax benefit of $ 4.0 million.

The valuation allowance also includes a $ 2.3 million net tax benefit related to the internal asset sale, resulting in a total net tax benefit of $ 6.3 million recognized in Income Tax Expense of the Consolidated Statements of Operations.

Cash Paid for Income Taxes, Net of Refunds

Cash paid for income taxes, net of refunds, for the years ended December 31, 2024 and 2023 was $ 14.6 million and $ 17.8 million, respectively.

During 2025, the Company made the following cash tax payments:

Year Ended December 31,

(In thousands of U.S.

United States

Net Cash Paid

(1) Includes payments to other jurisdictions that are individually insignificant.

Deferred Tax Assets and Deferred Tax Liability

17 unchanged sentences

( 59,941 ) ( 65,613 )

Deferred income tax asset net of valuation allowance

Deferred tax liability

Net deferred income tax asset

12,577 14,499

Net deferred tax asset (liability)

Deferred tax liability

( 12,521 ) ( 12,521 )

As of December 31, 2024, net deferred tax assets included a liability of $ 0.4 million (December 31, 2023 — liability of $ 1.3 million) associated with amounts recognized within Accumulated Other Comprehensive Income (Loss), including unrealized actuarial gains and losses related to the Company’s pension and other postretirement benefit plans and unrealized net gains and losses on cash flow hedging instruments.

Net deferred tax asset (1)

(1) The Company’s deferred tax liability of $ 12.5 million as of December 31, 2025 (2024 — $ 12.5 million) relates to the estimated applicable foreign withholding taxes associated with historical earnings that were not indefinitely reinvested which will become payable upon the repatriation of any such earnings.

During the year ended December 31, 2025, $ nil (2024 — $ nil ) of historical earnings from a subsidiary in China were distributed and as a result, $ nil (2024 — $ nil ) of foreign withholding taxes were paid to the relevant tax authorities.

As of December 31, 2025, net deferred tax assets included a liability of $ 1.6 million (December 31, 2024 — liability of $ 0.4 million) associated with amounts recognized within Accumulated Other Comprehensive Loss, including unrealized actuarial gains and losses related to the Company’s pension and other postretirement benefit plans and unrealized net gains and losses on cash flow hedging instruments.

Net Operating Loss Carryforwards

5 unchanged sentences

Based on the results of this reassessment, management concluded that the historical earnings of certain foreign subsidiaries in excess of amounts required to sustain business operations would no longer be indefinitely reinvested.

During the year ended December 31, 2024, $ nil (2023 — $ 24.0 million) of historical earnings from a subsidiary in China were distributed and, as a result, $ nil (2023 — $ 2.4 million) of foreign withholding taxes were paid to the relevant tax authorities.

During the year ended December 31, 2025, $ nil (2024 — $ nil ) of historical earnings from a subsidiary in China were distributed and, as a result, $ nil (2024 — $ nil ) of foreign withholding taxes were paid to the relevant tax authorities.

The Company had a deferred tax liability of $ 12.5 million as of December 31, 2025 (2024 — $ 12.5 million) related to the estimated applicable foreign withholding taxes associated with these historical earnings.

Valuation Allowance

As of December 31, 2024, the Company’s Consolidated Balance Sheets include net deferred income tax assets of $ 14.5 million, net of a valuation allowance of $ 65.6 million (December 31, 2023 — $ 8.0 million, net of a valuation allowance of $ 62.1 million).

For the year ended December 31, 2024, the Company recorded a net increase in valuation allowance of $ 3.5 million (2023 — net decrease of $ 0.7 million).

The net increase includes an increase of $ 3.2 million in reporting entities where it was concluded that it is more likely than not that the benefit from deferred tax assets will not be realized, $ 1.2 million related to deferred assets on investment tax credits and $ 1.4 million related to tax return and other tax adjustments.

This was partially offset by a decrease of $ 2.3 million related to an internal asset sale completed by the Company during the year.

The net increase in the valuation allowance is reflected within Income Tax Expense in the Company’s Consolidated Statements of Operations.

As of December 31, 2025, the Company’s Consolidated Balance Sheets include net deferred income tax assets of $ 12.6 million, which is net of a valuation allowance of $ 59.9 million (December 31, 2024 — $ 14.5 million, which is net of a valuation allowance of $ 65.6 million).

For the year ended December 31, 2025, the Company recorded a net decrease in valuation allowance of $ 5.7 million (2024 — net increase of $ 3.5 million).

The net decrease includes $ 4.7 million in reporting entities where it was concluded that it is more likely than not that the benefit from deferred tax assets will not be realized, $ 1.2 million related to deferred assets recorded in Other Comprehensive Income, and $ 1.3 million related to tax return and other tax adjustments.

This was partially offset by an increase of $ 1.2 million related deferred assets on investment tax credits and $ 0.4 million for items recorded through Shareholders’ Equity.

The net decrease in the valuation allowance is reflected within Income Tax Expense in the Company’s Consolidated Statements of Operations and a portion in Other Equity in the Consolidated Balance Sheets.

The valuation allowance is expected to reverse at the point in time when management determines it is more likely than not that the Company will incur sufficient tax liabilities to allow it to utilize the deferred tax assets against which the valuation allowance is recorded.

3 unchanged sentences

Accordingly, additional provisions on federal, provincial, state and foreign tax-related matters may be required in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.

For the year ended December 31, 2024, the Company recorded a net decrease of $ 1.6 million (2023 — $ 0.8 million, 2022 —$ 2.2 million) related to tax reserves (excluding interest and penalties) primarily related to tax years becoming statute barred for purposes of future tax examinations by local tax jurisdictions, partially offset by additional tax positions related to prior years.

For the year ended December 31, 2025, the Company recorded a net increase of $ nil (2024 — decrease of $ 1.6 million, 2023 — decrease of $ 0.8 million) related to tax reserves (excluding interest and penalties).

The Company has elected to classify interest and penalties related to income tax liabilities, when applicable, as part of the Income Tax Expense in its Consolidated Statements of Operations rather than Interest Expense.

8 unchanged sentences

Additions based on tax positions related to the current year

Additions (reductions) for tax positions of prior years

109 1,552 ( 94 )

Additions for tax positions of prior years

Reductions resulting from lapse of applicable statute of limitations and administrative practices

14 unchanged sentences

The tax is imposed on the repurchasing corporation itself and will be included in the cost basis of the repurchased treasury stock.

During the year ended December 31, 2024, the Company has recorded $ nil share buyback tax as share buybacks were offset by share issuances in the year.

During the year ended December 31, 2025, the Company has recorded $ nil share buyback tax as the Company did not have any share buybacks during the year.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law.

Key provisions of the Act include revisions to Interest Deductibility (IRC §163(j)), Bonus Depreciation, and Section §179.

The Act did not have a material impact on the Company’s consolidated financial statements, including its effective tax rate.

The Company will continue to monitor interpretive guidance and assess any future impact, if applicable.

Pillar Two Legislation

4 unchanged sentences

The Company is under the revenue threshold where Pillar Two would apply and is not currently subject to tax under these rules.

Income Tax Effect on Other Comprehensive Income (Loss)

For the years ended December 31, 2024, 2023, and 2022, income tax benefit (expense) related to the components of Other Comprehensive Income (Loss) was as follows:

Income Tax Effect on Other Comprehensive Income

For the years ended December 31, 2025, 2024, and 2023, income tax (expense) benefit related to the components of Other Comprehensive Income was as follows:

Years Ended December 31,

1 unchanged sentence

2025 2024 2023

Unrealized defined benefit plan actuarial loss (gain)

Unrealized defined benefit plan actuarial loss

$ ( 615 ) $ 7 $ 20

Unrealized postretirement benefit plans actuarial loss (gain)

Unrealized postretirement benefit plan actuarial loss

Amortization of defined benefit and postretirement benefit plans 182 204 175

Amortization of prior service cost — — ( 48 )

Unrealized change in cash flow hedging instruments

4 unchanged sentences

Goodwill and Other Intangible Assets

As of December 31, 2024, the Company’s total Goodwill was $ 52.8 million, of which $ 13.8 million relates to the SSIMWAVE reporting unit (December 31, 2023 — $ 13.8 million), and $ 39.0 million relates to the Technology Products and Services reporting unit (December 31, 2023 — $ 39.0 million).

Accordingly, the Company performed the quantitative assessment of goodwill impairment for the SSIMWAVE reporting unit.

Based on the quantitative assessment, the Company concluded that there is no impairment in the year ended December 31, 2024 and the fair value of the SSIMWAVE reporting unit exceeded its carrying value.

The Company’s significant assumptions, including revenue growth rates, discount rate and other factors may change in the future based on the changing economic and competitive environment in which it operates.

Assuming that all other components of the Company’s fair value estimate remain unchanged, an increase of 100 basis points in discount rate decreases the goodwill headroom by $ 9.4 million, and a decrease of 10 % in the revenue growth rate decreases the goodwill headroom by $ 24.4 million, without triggering impairment charges of goodwill.

For the Technology Products and Services reporting unit, the Company performed a qualitative impairment test as of the annual assessment date, September 30, 2024, to evaluate whether it is more likely than not that the fair value of its reporting units was less than their respective carrying amounts.

As of December 31, 2025, the Company’s total Goodwill was $ 45.8 million (December 31, 2024 — $ 52.8 million) of which $ 39.0 million (December 31, 2024 — $ 39.0 million) relates to the Technology Products and Services reporting unit and $ 6.8 million (December 31, 2024 — $ 13.8 million) relates to the Streaming and Consumer Technology reporting unit (formerly SSIMWAVE reporting unit, refer to Note 20 for additional information).

For the Technology Products and Services reporting unit, the Company performed a qualitative impairment test as of September 30, 2025 (annual test date) to evaluate whether it is more likely than not that the fair value of its reporting units was less than their respective carrying amounts.

Based on such assessment, the Company concluded, that it is more likely than not that the fair value of any such reporting unit is more than its carrying value.

The Company performed both a qualitative and quantitative assessment of goodwill impairment for the SSIMWAVE reporting unit as of November 1, 2025 (annual test date).

The impairment test indicated that a partial goodwill impairment charge of $ 7.0 million was required, with $ 6.8 million of goodwill remaining within the SSIMWAVE reporting unit.

The impairment charge was due to a change in the Company’s market focus, resulting in a downward adjustment to the SSIMWAVE reporting unit’s expected cash flows based on the discounted cash flow method.

The discounted cash flow method, which estimates fair value based on the present value of future cash flows, required the Company to make various assumptions regarding the timing and amount of these cash flows, including revenue growth rates, projected operating expenditures, and the terminal value of the business at the end of the projection period.

The Company’s 2025 assessment includes assumptions about future cash flows based on its internal forecasts, which incorporate the 2026 budget and the long-range plan.

The revenue growth rates were based on expected trends supported by market growth projections.

The terminal value was estimated using a long-term growth rate that closely approximated inflation.

The discount rate determined for the reporting unit was based on the risks of achieving the future cash flows, including risks applicable to the industry and market as a whole, as well as the capital structure of comparable entities.

For the impairment test of the SSIMWAVE reporting unit, the Company utilized a discount rate of 15.2 % and a revenue growth rate of 25.0 % in certain years which represent the most significant assumptions in the model.

Assumptions and estimates about future cash flows and discount rates are complex and often subjective and require significant judgment.

The analysis is dependent on internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units, terminal growth rates, profitability measures, and determination of the discount rates for the reporting units.

Assuming that all other components of the Company’s fair value estimate remain unchanged, an increase of 100 basis points in discount rate increases the impairment by $ 1.4 million, a 10 % decline in forecasted revenue increases the impairment by $ 3.5 million, and a decrease of 10 % in the revenue growth rate increases the impairment by $ 1.7 million.

Changes to the carrying amount of goodwill for the years ended December 31, 2025 and 2024 were as follows:

As of December 31, 2025

(In thousands of U.S.

Net Book Value

$ 52,815 $ 7,000 $ 45,815

As of December 31, 2024

(In thousands of U.S.

Net Book Value

$ 52,815 $ — $ 52,815

Other Intangible Assets

1 unchanged sentence

(In thousands of U.S.

Accumulated Amortization

Accumulated Amortization and Impairment (1)

Net Book Value

14 unchanged sentences

Total $ 99,447 $ 67,056 $ 32,391

(1) Refer to “Restructuring Charges and Other Impairments ” in Note 25 for additional information.

As of December 31, 2024

(In thousands of U.S.

Accumulated Amortization

Accumulated Amortization and Impairment

Net Book Value

14 unchanged sentences

Total $ 95,221 $ 60,097 $ 35,124

During 2024, the Company capitalized $ 8.4 million related to the development of internal use software, marketing-related intangibles, as well as additions in patents and trademarks and other intangible assets (2023 — $ 8.2 million).

During 2025, the Company capitalized $ 6.7 million related to the development of internal use software, marketing-related intangibles, as well as additions in patents and trademarks (2024 — $ 8.4 million).

The weighted average amortization period for these additions is 5.3 years (2024 — 4.9 years).

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(In thousands of U.S.

2026 $ 10,034

Revolving Credit Facility Borrowings, Net

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Wells Fargo Credit Agreement

On March 25, 2022, the Company entered into a Sixth Amended and Restated Credit Agreement with Wells Fargo Bank, National Association, as agent (the “Agent”), and a syndicate of lenders party thereto (the “Credit Agreement”), which extended the maturity date of the credit facility under the Credit Agreement (the “Credit Facility”) from June 28, 2023 to March 25, 2027.

The Company’s obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the “Guarantors”), and are secured by first-priority security interests in substantially all of the assets of the Company and the Guarantors.

The Credit Agreement has a revolving borrowing capacity of $ 300.0 million, and contains an uncommitted accordion feature allowing the Company to further increase its borrowing capacity by the greater of $ 140.0 million, for a total of $ 440.0 million, or by the Company’s EBITDA for the sum of the four most recently ended fiscal quarters, subject to certain conditions, depending on the mix of revolving loans and/or term loans under the incremental facility and subject to conditions set forth in the Credit Agreement.

The Credit Facility requires that the Company maintain a maximum Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) of no greater than 3.25 :1.00, on the last day of each fiscal quarter.

The Senior Secured Net Leverage Ratio is the ratio of Total Debt (as defined in the Credit Agreement), secured by liens, net of unrestricted cash and cash equivalents held outside of the PRC up to a maximum of $ 75.0 million, relative to Adjusted EBITDA per Credit Facility for the four prior quarters.

The Senior Secured Net Leverage Ratio is calculated using Adjusted EBITDA per Credit Facility determined on a trailing twelve-month basis.

The Company was a party to a Sixth Amended and Restated Credit Agreement, dated March 25, 2022 (the “Credit Agreement”), that provided for a credit facility (the “Credit Facility”).

On July 14, 2025, the Company entered into a Seventh Amended and Restated Credit Agreement (the “New Credit Agreement”) with Wells Fargo Bank, National Association, as agent, and a syndicate of lenders party thereto.

The facility under the New Credit Agreement (the “New Credit Facility”) matures on July 14, 2030.

The Company’s obligations under the New Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the “Guarantors”), and are secured by first-priority security interests in substantially all of the assets of the Company and the Guarantors.

The New Credit Agreement provides for a revolving borrowing capacity of $ 375.0 million, and contains an uncommitted accordion feature that allows the Company to further increase its borrowing capacity by the greater of $ 140.0 million, or by the Company’s EBITDA (as defined in the Credit Agreement) (“Adjusted EBITDA per Credit Facility”) for the sum of the four most recently ended fiscal quarters, subject to certain conditions, depending on the mix of revolving loans and/or term loans under the incremental facility and subject to conditions set forth in the Credit Agreement.

The New Credit Agreement requires that the Company does not exceed a maximum Senior Secured Net Leverage Ratio (as defined therein) of 3.25 :1.00 which may be increased under certain circumstances and is tested on the last day of each fiscal quarter.

The Company was in compliance with this requirement as of December 31, 2025 as the Senior Secured Net Leverage Ratio was 0.00 :1.00.

Loans under the Credit Facility bear interest, at the Company’s option, at (i) Term Secure Overnight Financing Rate (“Term SOFR”), Eurocurrency Rate or Canadian Dollar Offered Rate (“CDOR”) plus a margin ranging from 1.00 % to 1.75 % per annum;

Loans under the New Credit Facility bear interest, at the Company’s option, at (i) Term Secure Overnight Financing Rate (“Term SOFR”), Eurocurrency Rate, or Canadian Dollar Offered Rate (“CDOR”) plus a margin ranging from 1.00 % to 1.75 % per annum;

or (ii) the U.S.

3 unchanged sentences

The effective interest rate for the year ended December 31, 2025 was 6.07 % (2024 — 6.96 %).

The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit indebtedness, liens, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets.

The Credit Agreement also contains customary representations, warranties and event of default provisions.

The Company incurred fees of approximately $ 2.5 million in connection with the March 2022 amendment of the Credit Agreement, which are being amortized on a straight-line basis over the term of the Credit Agreement.

As of December 31, 2024, the Company had $ 0.6 million of unamortized fees (December 31, 2023 — $ 1.1 million) that will be amortized over the remaining term of the Credit Facility.

As of December 31, 2024 and 2023, the Company had no letters of credit or advance payment guarantees outstanding under the Credit Facility.

As of December 31, 2024, the amount available for future borrowings under the Credit Facility was $ 263.0 million (2023 — $ 276.0 million).

The New Credit Agreement contains customary affirmative and negative covenants for a transaction of this type, including covenants that limit indebtedness, liens, asset sales, investments, and restricted payments, in each case, subject to negotiated exceptions and baskets.

The New Credit Agreement also contains customary representations, warranties, and event of default provisions for a transaction of this type.

The Company incurred fees of approximately $ 2.2 million in connection with the New Credit Agreement, which are being amortized on a straight-line basis over the term of the New Credit Agreement.

As of December 31, 2025 and 2024, the Company had no letters of credit or advance payment guarantees outstanding under the New Credit Facility.

As of December 31, 2025, the amount available for future borrowings under the New Credit Facility was $ 338.0 million (2024 — $ 263.0 million under the previous Credit Facility).

Foreign Exchange Facility

Within the Credit Facility, the Company is able to purchase foreign currency forward contracts and/or other swap arrangements.

As of December 31, 2024, the net unrealized loss on the Company’s outstanding foreign currency forward contracts was $ 2.0 million, representing the amount by which the fair value of these forward contracts exceeded their nominal value (2023 — net unrealized gain of $ 0.8 million;

2022 — net unrealized loss of $ 0.6 million).

Within the New Credit Facility, the Company is able to purchase foreign currency forward contracts and/or other swap arrangements.

As of December 31, 2025, the net unrealized gain on the Company’s outstanding foreign currency forward contracts was $ 1.0 million, representing the amount by which the fair value of these forward contracts exceeded their nominal value (2024 — net unrealized loss of $ 2.0 million;

2023 — net unrealized gain of $ 0.8 million).

As of December 31, 2025, the notional value of the Company’s outstanding foreign currency forward contracts was $ 48.4 million (December 31, 2024 — $ 48.4 million).

2 unchanged sentences

(“IMAX Shanghai”), one of the Company’s majority-owned subsidiaries in China, renewed its unsecured revolving facility with Bank of China for up to 200.0 million Chinese Renminbi (“RMB”) ($ 28.5 million), including RMB 10.0 million ($ 1.4 million) for letters of guarantee, to fund ongoing working capital requirements (the “Bank of China Facility”).

The Bank of China Facility will expire on March 20, 2025.

As of December 31, 2024, no borrowings were outstanding under the Bank of China Facility and outstanding letters of guarantee were RMB 0.2 million (less than $ 0.1 million).

The Bank of China Facility has been renewed to March 20, 2026.

As of December 31, 2025, no borrowings were outstanding under the Bank of China Facility and outstanding letters of guarantee were RMB 1.0 million ($ 0.1 million).

As of December 31, 2025, the amount available for future borrowings under the Bank of China Facility was RMB 190.0 million ($ 27.1 million) and the amount available for letters of guarantee was RMB 9.0 million ($ 1.3 million).

9 unchanged sentences

In October 2019, the Company entered into a $ 5.0 million facility with National Bank of Canada (the “NBC Facility”) fully insured by Export Development Canada for use solely in conjunction with the issuance of performance guarantees and letters of credit.

In August of 2024, the NBC Facility was renewed to September 20, 2025.

In October 2025, the NBC Facility was renewed to October 8, 2026.

The NBC Facility is renewable on the same terms and conditions on an annual basis.

The Company did not have any letters of credit or advance payment guarantees outstanding as of December 31, 2024 and 2023 under the NBC Facility.

The Company did not have any letters of credit or advance payment guarantees outstanding as of December 31, 2025 and 2024 under this facility.

Convertible Notes and Other Borrowings, Net

16 unchanged sentences

On March 19, 2021, the Company issued $ 230.0 million of 0.500 % Convertible Senior Notes due 2026 (the “2026 Convertible Notes”) in a private placement conducted pursuant to Rule 144A under the Securities Act of 1933, as amended.

The 2026 Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.500 % per annum on the principal of $ 230.0 million, payable semi-annually in arrears on April 1 and October 1 of each year.

The 2026 Convertible Notes will mature on April 1, 2026, unless redeemed or repurchased by the Company or converted on an earlier date.

On November 6, 2025, the Company completed the repurchase of $ 229.3 million (or 99.7 %) of the outstanding principal amount of the 2026 Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of holders for an aggregate repurchase price of approximately $ 275.5 million, which included accrued and unpaid interest of $ 0.1 million.

The repurchase was funded by the issuance of new notes, as described below under “2030 Convertible Notes” and borrowings under the Company’s New Credit Facility.

The Company accounted for the notes repurchase as induced conversions and recognized a $ 31.5 million charge to Other Equity and $ 15.3 million of fair value, representing the consideration paid to holders of the 2026 Convertible Notes in excess of the value to which they were entitled to receive pursuant to the original conversion terms, was recorded within Induced conversion expense on settlement of convertible notes in the Company’s Consolidated Statements of Operations.

From and after January 1, 2026, holders of the remaining outstanding 2026 Convertible Notes may convert their 2026 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

Effective January 1, 2026, the Company made an irrevocable election to settle the principal portion and any applicable conversion premiums of the 2026 Convertible Notes only in cash.

In connection with the pricing of the 2026 Convertible Notes, the Company entered into privately negotiated capped call transactions (the “2026 Capped Call Transactions”) with certain financial institutions to reduce potential dilution in connection with the redemption of the 2026 Convertible Notes.

In connection with the repurchase of the 2026 Convertible Notes, the Company received $ 30.7 million in cash in connection with settling certain 2026 Capped Call Transactions.

As the Capped Call Transactions were classified as equity, the proceeds from settlement of these Capped Calls were recorded to Other Equity within Shareholders’ Equity in the Company’s Consolidated Statements of Shareholders’ Equity and on the Consolidated Balance Sheets.

The remaining outstanding 2026 Capped Call Transactions will expire on April 1, 2026 unless exercised earlier.

2030 Convertible Notes

On November 6, 2025, the Company issued $ 250.0 million of 0.750 % Convertible Senior Notes due 2030 (the “2030 Convertible Notes”) in a private placement conducted pursuant to Rue 144A under the Securities Act of 1933, as amended.

The net proceeds from the issuance of the 2030 Convertible Notes were $ 243.1 million, after deducting the initial purchasers’ discounts and commissions.

The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.500 % per annum on the principal of $ 230.0 million, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021.

The Convertible Notes will mature on April 1, 2026, unless they are redeemed or repurchased by the Company or converted on an earlier date.

Holders of the Convertible Notes have the right to convert their Convertible Notes in certain circumstances and during specified periods.

Before January 1, 2026, holders of the Convertible Notes have the right to convert their Convertible Notes only upon the occurrence of certain events.

From and after January 1, 2026, holders of the Convertible Notes may convert their Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, the Company will pay or deliver, as applicable, cash or a combination of cash (in an amount no less than the principal amount of the Convertible Notes being converted) and common shares, at its election, based on the applicable conversion rates.

The 2030 Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.750 % per annum on the principal of $ 250.0 million, payable semi-annually in arrears on May 15 and November 15 of each year.

The 2030 Convertible Notes will mature on November 15, 2030, unless they are redeemed or repurchased by the Company or converted on an earlier date.

Holders may convert their notes at their option in the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on March 31, 2026 (and only during such calendar quarter), if the last reported sale price per common share of the Company, no par value (“common shares”), exceeds 130 % of

the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

• during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per common share on such trading day and the conversion rate on such trading day;

• upon the occurrence of certain corporate events or distributions on the common shares, as provided in the Indenture;

• if the Company calls such notes for redemption;

• at any time from, and including, August 15, 2030 until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, the Company will pay or deliver, as applicable, cash or a combination of cash and common shares, at its election, based on the applicable conversion rates.

The initial conversion rate is 23.5743 common shares per $1,000 principal amount of 2030 Convertible Notes, which represents an initial conversion price of approximately $ 42.42 per common share, and is subject to adjustment upon the occurrence of certain events.

The Convertible Notes are redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after April 6, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for a specified period of time.

In addition, calling any Convertible Notes for redemption will constitute a “make-whole fundamental change” with respect to such notes, in which case the conversion rate applicable to the conversion of such notes will be increased in certain circumstances if such notes are converted after they are called for redemption.

In addition, upon the occurrence of a “fundamental change” (as defined below), holders may require the Company to repurchase their 2030 Convertible Notes at a cash repurchase price equal to the principal amount of the 2030 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any.

Subject to the terms and conditions of the indenture governing the 2030 Convertible Notes, a “fundamental change” means, among other things, an event resulting in (i) a change of control, (ii) a transfer of all or substantially all of the assets of the Company, (iii) a merger, (iv) liquidation or dissolution of the Company, or (v) delisting of the Company’s common shares from a national securities exchange.

In connection with the pricing of the 2030 Convertible Notes, the Company entered into privately negotiated capped call transactions (the “2030 Capped Call Transactions”) with certain financial institutions.

The 2030 Capped Call Transactions are expected to reduce potential dilution resulting from the common shares the Company is required to issue and/or to offset any potential cash payments the Company is required to make in excess of the principal amount of the 2030 Convertible Notes in the event that the market price per share of the Company’s common shares is greater than the strike price of the Capped Call Transactions with such reduction and/or offset subject to a cap.

The Capped Call Transactions have an initial cap price of $ 37.2750 per share of the Company’s common shares, which represents a premium of 75 % over the last reported sale price of the common shares when they were priced on March 16, 2021, and are subject to certain adjustments under the terms of the Capped Call Transactions.

The 2030 Capped Call Transactions have an initial cap price of $ 57.1025 per share of the Company’s common shares, which represents a premium of 75 % over the last reported sale price of the common shares when they were priced on November 3, 2025, and are subject to certain adjustments under the terms of the 2030 Capped Call Transactions.

Collectively, the 2030 Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2030 Convertible Notes, the number of the Company’s common shares underlying the 2030 Convertible Notes.

The cost of the Capped Call Transactions was approximately $ 19.1 million.

The cost of the 2030 Capped Call Transactions was approximately $ 21.9 million, recorded to Other Equity within Shareholders’ Equity in the Company’s Consolidated Statements of Shareholders’ Equity and on the Consolidated Balance Sheets.

The 2026 Convertible Notes and the 2030 Convertible Notes are together referred to as the “Convertible Notes”.

The 2026 Capped Call Transactions and the 2030 Capped Call Transactions are together referred to as the “Capped Call Transactions”.

The Capped Call Transactions are separate transactions, are not part of the terms of the Convertible Notes and will not affect any holder’s rights under the Convertible Notes.

Holders of the Convertible Notes will not have any rights with respect to the Capped Call Transactions.

related $ 19.1 million cost was recorded as a reduction to Other Equity within Shareholders’ Equity in the Company’s Consolidated Statements of Shareholders’ Equity and on the Consolidated Balance Sheets.

In addition, upon the occurrence of a “fundamental change” (as defined below), holders may require the Company to repurchase their Convertible Notes at a cash repurchase price equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any.

Subject to the terms and conditions of the indenture governing the Convertible Notes, a “fundamental change” means, among other things, an event resulting in (i) a change of control, (ii) a transfer of all or substantially all of the assets of the Company, (iii) a merger, (iv) liquidation or dissolution of the Company, or (v) delisting of the Company’s common shares from a national securities exchange.

The Capped Call Transactions meet all of the applicable criteria for equity classification in accordance with ASC 815-10-15-74(a), “Derivatives and Hedging — Embedded Derivatives — Certain Contracts Involving an Entity’s Own Equity,” and, as a result, the related cost was recorded as a reduction to Other Equity within Shareholders’ Equity in the Company’s Consolidated Statements of Shareholders’ Equity and on the Consolidated Balance Sheets.

The Company continues to record the Convertible Notes entirely as a liability on the Consolidated Balance Sheets, net of initial purchasers’ discounts and commissions and other debt issuance costs, with interest expense reflecting the cash coupon plus the amortization of the discounts and capitalized costs.

14 unchanged sentences

The obligation is being accreted to its maturity amount, resulting in an interest accretion expense of $ 0.2 million in 2025 (2024 — $ 0.3 million;

2022 — less than $ 0.1 million) which is being recorded within Interest Expense in the Company’ Consolidated Statements of Operations.

2023 — $ 0.5 million) which is being recorded within Interest Expense in the Company’s Consolidated Statements of Operations.

As of December 31, 2025, the Federal Economic Development Loan had a carrying value of $ 0.9 million, net of unaccreted interest benefit and was recorded within Convertible Notes and Other Borrowings, Net on the Company’s Consolidated Balance Sheets.

11 unchanged sentences

12,404 3,327 6,343 2,728 6

Finance lease obligations

Wells Fargo Facility

Credit Facility

37,000 37,000 — — —

3 unchanged sentences

745 745 — — —

2030 Convertible Notes (6)

259,422 1,922 3,750 253,750 —

Postretirement benefits obligations

8 unchanged sentences

(Refer to “Borrowings — Convertible Notes and Other Borrowings, Net” in Note 13.)

(5) The Convertible Notes bear interest at a rate of 0.500 % per annum on the principal of $ 230.0 million, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021.

The Convertible Notes will mature on April 1, 2026, unless earlier repurchased, redeemed or converted.

(5) The Convertible Notes bear interest at a rate of 0.500 % per annum on the principal of $ 0.7 million, payable semi-annually in arrears on April 1 and October 1 of each year.

The Convertible Notes will mature on April 1, 2026, unless repurchased, redeemed or converted.

(Refer to “Borrowings — Convertible Notes and Other Borrowings, Net” in Note 13.)

(6) The Convertible Notes bear interest at a rate of 0.750 % per annum on the principal of $ 250.0 million, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2026.

The Convertible Notes will mature on November 15, 2030 unless earlier repurchased, redeemed or converted.

(Refer to “Borrowings — Convertible Notes and Other Borrowings, Net” in Note 13.)

The Company compensates its sales force with both fixed and variable compensation.

10 unchanged sentences

The Company expenses legal costs relating to its lawsuits, claims, and proceedings as incurred.

(i) In January 2004, the Company and IMAX Theatre Services Ltd., a subsidiary of the Company, commenced an arbitration seeking damages before the International Court of Arbitration of the International Chamber of Commerce (the “ICC”) with respect to the breach by Electronic Media Limited (“EML”) of its December 2000 agreement with the Company.

In January 2004, the Company and IMAX Theatre Services Ltd., a subsidiary of the Company, commenced an arbitration seeking damages before the International Court of Arbitration of the International Chamber of Commerce (the “ICC”) with respect to the breach by Electronic Media Limited (“EML”) of its December 2000 agreement with the Company.

In June 2004, the Company commenced a related arbitration before the ICC against EML’s affiliate, E-City Entertainment (I) PVT Limited (“E-City”).

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On March 29, 2017, the Company filed an Execution Application in the Bombay High Court seeking to enforce the ICC award against E-City and several related parties.

On October 24, 2024, the Bombay High Court announced the dismissal of the Company’s application, and the Court issued a written order of dismissal on November 14, 2024.

On December 13, 2024, the Company filed an appeal of this order, and the Company fully intends to continue pursuing its rights and seeking to enforce the arbitration award.

The Company has also taken steps to enforce the ICC final award outside of India.

In December 2011, the Ontario

Superior Court of Justice issued an order recognizing the final award and requiring E-City to pay the Company $ 30,000 to cover the costs of the application, and in May 2012, the New York Supreme Court recognized the Canadian judgment and entered it as a New York judgment.

In an order dated November 14, 2024, the Bombay High Court dismissed the

Company’s application.

On December 13, 2024, the Company filed an appeal of this order, and on December 30, 2025, the Commercial Appellate Division of the Bombay High Court reversed the 2024 dismissal, rejected E-City’s objections to enforcement of the arbitration award, and recognized the award as a decree of the Court.

The Court directed the parties to appear before an Executing Court to proceed with execution of the award.

On January 6, 2026, two of the E-City respondents filed a Special Leave Petition requesting that the Supreme Court of India hear an appeal of the matter.

The Company fully intends to continue pursuing its rights and seeking to enforce the arbitration award.

No amounts have been recognized in connection with this matter.

(ii) In addition to the matters described above, the Company is currently involved in other legal proceedings or governmental inquiries which, in the opinion of the Company’s management, will not materially affect the Company’s financial position or future operating results, although no assurance can be given with respect to the ultimate outcome of any such proceedings.

(iii) In the normal course of business, the Company enters into agreements that may contain features that meet the definition of a guarantee.

A guarantee is a contract (including an indemnity) that contingently requires the Company to make payments (either in cash, financial instruments, other assets, shares of its stock, or provision of services) to a third party based on (a) changes in an underlying interest rate, foreign exchange rate, equity or commodity instrument, index or other variable, that is related to an asset, a liability or an equity security of the counterparty, (b) failure of another party to perform under an obligating agreement or (c) failure of another third party to pay its indebtedness when due.

Financial Guarantees

Certain subsidiaries of the Company have provided significant financial guarantees to third parties under the Credit Agreement (Refer to Note 13).

Certain subsidiaries of the Company have provided significant financial guarantees to third parties under the Credit Agreement.

(Refer to “Borrowings — Convertible Notes and Other Borrowings, Net” in Note 13.)

Product Warranties

The Company’s accrual for product warranties, which is recorded within Accrued and Other Liabilities on the Consolidated Balance Sheets, was $ 0.1 million and less than $ 0.1 million as of December 31, 2024 and 2023, respectively.

The Company’s accrual for product warranties, which is recorded within Accrued and Other Liabilities on the Consolidated Balance Sheets, wa s $ nil a nd $ 0.1 million as of December 31, 2025 and 2024, respectively.

Director/Officer Indemnifications

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During the years ended December 31, 2025, 2024, and 2023, the Company settled the exercise of stock options and the vesting of PSUs and RSUs with its common shares.

These settlements were either through newly issued common shares from treasury or through the purchase of common shares in the open market by the IMAX LTIP trustee.

These settlements were either through newly issued common shares from treasury or through

the purchase of common shares in the open market by the IMAX LTIP trustee.

The following table summarizes the settlement of stock option, PSU and RSU transactions:

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Research and development

Restructuring and other charges

Restructuring charges and other impairments

Total $ 26,578 $ 22,821 $ 23,551

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Of this amount, 1,818,698 common shares are reserved for the future exercise of stock options (December 31, 2024 — 2,469,238 ), 1,140,515 common shares are reserved for the future vesting of PSUs (December 31, 2024 — 1,097,634 ), and 1,244,670 common shares are reserved for the future vesting of RSUs (December 31, 2024 — 1,465,977 ).

As of December 31, 2024, 2,469,238 stock options in respect of common shares (December 31, 2023 — 3,329,422 ) were vested and exercisable.

IMAX LTIP and SOP Stock Options

The Company’s policy is to issue new common shares from treasury or shares purchased in the open market to satisfy stock options which are exercised.

Prior to 2020, the Company issued stock options under the Company’s Stock Option Plan (the “SOP”) as share-

based compensation.

Prior to 2020, the Company issued stock options under the Company’s Stock Option Plan (the “SOP”) as share-based compensation.

The Company no longer grants stock option awards as share-based compensation under the IMAX LTIP and SOP.

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Stock option expense $ — $ — $ 84

For the year ended December 31, 2024, the Company’s Consolidated Statements of Operations included an income tax benefit of $ nil related to stock option expense (2023 — $ nil ;

2022 — $ 0.1 million).

As of December 31, 2024, 2023, and 2022, unrecognized share-based compensation expense related to non-vested employee stock options was as follows:

Years Ended December 31,

(In thousands of U.S.

2024 2023 2022

Expense related to non-vested employee stock options $ — $ — $ 86

As of 2024, 2023, and 2022, unrecognized share-based compensation expense related to non-vested employee stock options was expected to be recognized over the following weighted-average periods:

As of December 31,

2024 2023 2022

Weighted average period (in years) 0.0 0.0 0.2

For the years ended December 31, 2025, 2024 and 2023, respectively, the Company’s Consolidated Statements of Operations did not include an income tax benefit related to stock option expense.

During the years ended December 31, 2025, 2024, and 2023, the Company did not grant any stock options.

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1,818,698 2,469,238 3,329,422 25.82 26.27 26.23

As of December 31, 2024, 2,469,238 options outstanding included fully vested options with a weighted average exercise price of $ 26.27 , an aggregate intrinsic value of $ 5.3 million and a weighted average remaining contractual life of 2.0 years.

The intrinsic value of options exercised in 2024 was $ 0.9 million (2023 —$ nil ;

As of December 31, 2025, 1,818,698 options outstanding, which are fully vested and exercisable, with a weighted average exercise price of $ 25.82 , an aggregate intrinsic value of $ 20.3 million and a weighted average remaining contractual life of 1.7 years.

The intrinsic value of options exercised in 2025 was $ 1.7 million (2024 —$ 0.9 million;

2023 — $ nil ).

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Each RSU represents a contingent right to receive a common share and is the economic equivalent of one common share.

The grant date fair value of each RSU is equal to the share price of the Company’s stock at the grant date or the average closing price of the Company’s common share for five days prior to the date of

For the years ended December 31, 2025, 2024, and 2023, the Company recorded the following expenses related to RSUs issued to employees and directors in the IMAX LTIP:

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Restricted Share Units to Non-Employees

The Company issued 24,982 RSUs to a strategic advisor in 2024 (2023 — nil ;

2022 — nil ), of which 1,481 RSUs vested immediately.

For the remaining 23,501 RSUs issued, 14,251 RSUs vested in four months and the remaining 9,250 RSUs were forfeited.

The Company issued 2,200 RSUs to a strategic advisor in 2025 (2024 — 24,982 ;

2023 — nil ), which were fully vested as of December, 31, 2025.

These RSUs had a weighted average grant date fair value per share of $ 25.00 and an expense of $ 0.1 million in the year ended December 31, 2025.

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The achievement of the Adjusted EBITDA and TSR targets in these PSUs is determined over a three-year performance period.

At the conclusion of the three-year performance period, the number of PSUs that ultimately vest can range from 0 % to a maximum vesting opportunity of 175 % of the initial Adjusted EBITDA PSU award or 150 % of the initial TSR PSU award, depending upon actual performance versus the established Adjusted EBITDA and TSR targets, respectively.

For PSUs granted as of December 31, 2025, the number of PSUs that ultimately vest can range from 0 % to a maximum vesting opportunity of 175 % of the initial Adjusted EBITDA PSU award or 150 % of the initial TSR PSU award, depending upon actual performance versus the established Adjusted EBITDA and TSR targets, respectively, at the end of the three-year performance period.

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The amount and timing of compensation expense recognized for PSUs with Adjusted EBITDA targets is dependent upon management’s assessment of the likelihood of achieving these targets.

If, as a result of management’s assessment, it is projected that a

greater number of PSUs will vest than previously anticipated, a life-to-date adjustment to increase compensation expense is recorded in the period that such determination is made.

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The Company’s actual tax benefits realized for the tax deductions related to the vesting of PSUs was $ 0.4 million for the year ended December 31, 2025 (2024 ― $ 0.2 million;

2022 ― $ nil ).

2023 ― $ 0.3 million).

Total share-based compensation expense related to non-vested PSUs not yet recognized and the weighted average period over which the awards are expected to be recognized are as follows:

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1,097,634 922,621 931,716 $ 17.99 $ 19.16 $ 18.96

Granted (1)(2)

555,247 580,336 585,602 24.19 17.50 17.69

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1,140,515 1,097,634 922,621 20.12 17.99 19.16

(1) For the year ended December 31, 2024, the balance of shares granted includes 135,511 additional shares, at a weighted average grant date fair value per share of $ 19.71 , as PSUs granted in 2021 with Adjusted EBITDA targets vested at 175 % on account of full achievement of the targets.

(2) Forfeited PSUs include the TSR awards granted in 2021 which did not vest as the market condition was not satisfied.

(1) For the year ended December 31, 2025, the balance of shares granted includes 159,376 (2024 ― 135,511 ;

2023 ― 157,963 ) additional shares, at a weighted average grant date fair value per share of $ 19.18 (2024 ― $ 19.71 ;

2023 ― $ 16.92 ), as PSUs granted in 2022 (2024 ― 2021;

2023 ― 2020) with Adjusted EBITDA targets vested at 175 % on account of full achievement of the targets.

(2) For the year ended December 31, 2025, the balance of shares granted includes 17,375 (2024 ― nil ;

2023 ― nil ) additional shares at a weighted grant date fair value per share of $ 22.72 (2024 ― $ nil ;

2023 ― $ nil ), as PSUs granted in 2022 (2024 ― 2021;

2023 ― 2020) with TSR targets vested at 123.5 % based on actual performance versus the targets.

(3) In 2023, forfeited PSUs include the TSR awards granted in 2020 which did not vest as the market condition was not satisfied.

The Company recorded an expense of $ 1.5 million associated with these 104,633 shares that has not been reversed at the time of forfeiture.

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1,416 1,243 2,337

1,243 2,337 2,284

Total $ 1,710 $ 1,278 $ 2,996

In 2022, IMAX China modified the terms of certain fully vested stock options to extend their contractual life by one year and recorded an associated expense of less than $ 0.1 million during the year ended December 31, 2022.

No such charges were incurred in 2024 and 2023, respectively.

Issuer Purchases of Equity Securities

On June 12, 2017, the Company announced that the Board of Directors approved a $ 200.0 million share repurchase program for its common shares that would have initially expired on June 30, 2020, which was subsequently extended and increased in the total share repurchase authority to $ 400.0 million.

In 2023, the Company’s Board of Directors approved a 36-month extension to its share repurchase program through June 30, 2026.

In June 2025, the Company’s Board of Directors approved a 12-month extension to its share repurchase program through June 30, 2027, and an increase of $ 100.0 million in the Company’s share repurchase program authorization.

With the increase of $ 100.0 million, the Company’s total share repurchase authority is $ 500.0 million under the current share repurchase program.

As of December 31, 2025, the Company had $ 250.7 million available under the program.

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The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time.

In 2024, the Company repurchased 1,166,370 (2023 ― 1,604,420 ) common shares at an average price of $ 13.99 per share (2023 ― $ 16.45 per share), for a total of $ 16.3 million (2023 ― $ 26.4 million), excluding commissions.

In addition, 108,393 common shares repurchased in 2023, at an average price of $ 14.98 for a total of $ 1.6 million, were settled in 2024.

The following table summarizes the Company’s share repurchases during the years ended December 31, 2025 and 2024:

Total Number of Shares

Repurchased Average Price Paid Per Share

Repurchased Average Price Paid

2025 2024 2025 2024

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For the years ended December 31, 2025 and 2024, there were no shares purchases in the administration of employee share based plans.

As of December 31, 2024, the IMAX LTIP trustee held nil shares.

As of December 31, 2025, the IMAX LTIP trustee did not hold any shares.

Any shares held with the trustee are recorded at cost and are reported as a reduction against Capital Stock on the Company’s Consolidated Balance Sheets.

In 2023, IMAX China’s shareholders granted its Board of Directors a general mandate authorizing the Board, subject to applicable laws, to repurchase shares of IMAX China not to exceed 10 % of the total number of issued shares as of June 7, 2023 ( 33,959,314 shares).

In 2024, IMAX China’s shareholders granted its Board of Directors a general mandate authorizing IMAX China’s Board of Directors, subject to applicable laws, to repurchase shares of IMAX China not to exceed 10 % of the total number of issued shares as of June 7, 2024 ( 34,000,845 shares).

This program expired on the date of the 2025 Annual General Meeting of IMAX China on June 12, 2025.

During the 2024 Annual General Meeting, shareholders approved the repurchase of shares of IMAX China not to exceed 10 % of the total number of shares as of June 7, 2024 ( 34,000,845 shares).

During the 2025 Annual General Meeting, shareholders granted its Board of Directors a general mandate authorizing the Board of Directors of IMAX China, subject to applicable laws to repurchase shares of IMAX China not to exceed 10 % of the total number of issued shares as of June 12, 2025 ( 33,919,122 shares).

This program will be valid until the 2026 Annual General Meeting of IMAX China.

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In 2025, IMAX China repurchased 1,495,900 (2024 ― 119,900 ) common shares at an average price of HKD 7.56 per share ($ 0.96 per share) for a total of HKD 11.3 million or U.S.

$ 0.1 million (2023 ― HKD 7.11 per share or $ 0.91 per share, for a total of HKD 0.1 million or less than $ 0.1 million).

$ 1.4 million (2024 ― HKD 7.43 per share or $ 0.95 per share, for a total of HKD 0.9 million or U.S $ 0.1 million).

The change in non-controlling interest as a result of common shares repurchased by IMAX China is recorded within Non-Controlling Interest on the Consolidated Balance Sheets and in the Consolidated Statements of Shareholders’ Equity.

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Total Number of Shares

Repurchased Average Price Paid Per Share

Repurchased Average Price Paid

2025 2024 2025 2024

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52,946 53,260 54,149

Weighted average number of shares (repurchased) issued, net

Weighted average number of shares issued (repurchased), net

690 ( 610 ) 161

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Weighted average effect of potential common shares, if dilutive

1,908 1,214 836

Weighted average number of shares outstanding - diluted

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Statutory Surplus Reserve

Pursuant to the corporate law of the PRC, entities registered in the PRC are required to maintain certain statutory reserves, which are appropriated from after-tax profits (after offsetting accumulated losses from prior years), as reported in their respective statutory financial statements, before the declaration or payment of dividends to equity holders.

Pursuant to the corporate law of the People’s Republic of China (“PRC”), entities registered in the PRC are required to maintain certain statutory reserves, which are appropriated from after-tax profits (after offsetting accumulated losses from prior years), as reported in their respective statutory financial statements, before the declaration or payment of dividends to equity holders.

All statutory reserves are created for specific purposes.

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Foreign Exchange

Included in Selling, General and Administrative Expenses for the year ended December 31, 2024 was a foreign currency net loss of $ 1.2 million (2023 — net loss of $ 0.7 million;

Included in Selling, General and Administrative Expenses for the year ended December 31, 2025 was a foreign currency net loss of less than $ 0.1 million (2024 — net loss of $ 1.2 million;

2023 — net loss of $ 0.7 million) resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities.

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Film Remastering and Distribution

In an IMAX Film Remastering and distribution arrangement, the Company receives a percentage of the box office receipts from a third party who owns the copyright to a film in exchange for converting the film into IMAX format and distributing it through the IMAX network.

The fee earned by the Company in a typical IMAX Film Remastering and distribution arrangement averages approximately 12.5 % of box office receipts (i.e.

gross box office receipts less applicable sales taxes), except for within mainland China, where the Company receives a lower percentage of net box office receipts for certain Hollywood films.

In a typical IMAX Film Remastering and distribution arrangement, the Company receives a percentage of the box office from a movie studio in exchange for converting a commercial film into the IMAX format and distributing it through the IMAX network.

The fee earned by the Company in a typical IMAX Film Remastering and distribution arrangement averages approximately 12.5 % of box office on a gross basis before sales taxes except within Greater China, where the Company often receives a lower percentage of net box office due to an incremental importation fee paid by Hollywood studios.

All of the Company’s box office results in this Form 10-K are inclusive of China booking fees to be consistent with market reporting of global box office.

The accounting policy for the Company’s Film Remastering and distribution arrangements is disclosed in “Summary of Significant Accounting Policies — Revenue Recognition ” in Note 2.

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2025 2024 2023

Decrease (increase) in:

(Increase) decrease in:

Financing receivables

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(3) Includes the amortization of lessee incentives provided by the Company to its customers under JRSAs.

Write-downs, including asset impairments

Write-downs, including goodwill and asset impairments

Years Ended December 31,

1 unchanged sentence

2025 2024 2023

Other assets (1)

$ 381 $ — $ 144

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$ 9,202 $ 3,973 $ 1,884

(1) In 2022, the Company recognized a full impairment of its RMB 4.5 million investment in the film Mozart from Space based on projected box office results and distribution costs.

(Refer to “Financial Instruments — Interest in Film” in Note 21.)

(1) In 2025, the Company recorded write-downs of $ 0.3 million (2024 — $ 0.4 million;

2022 — $ 0.7 million in Costs and Expenses Applicable to Technology Sales to reduce the carrying value of inventory.

2023 — $ 0.5 million) in Costs and Expenses Applicable to Technology Sales to reduce the carrying value of inventories.

(2) In 2025, the Company recorded charges of $ 0.6 million (2024 — $ 3.4 million;

2022 — $ 1.0 million) in Costs and Expenses Applicable to Revenues - Technology Rentals mostly mostly related to the write-down of systems under joint revenue sharing arrangements resulting from contract amendments, as well as the write-downs of leased xenon-based digital systems which were taken out of service in connection with customer upgrades to laser-based digital systems.

(4) In 2024, the Company recorded impairment losses of less than $ 0.1 million (2023 — $ 0.4 million;

2023 — $ 0.8 million) in Costs and Expenses Applicable to Revenues - Technology Rentals mostly related to the write-down of systems under joint revenue sharing arrangements resulting from contract amendments, as well as the write-downs of leased xenon-based digital systems which were taken out of service in connection with customer upgrades to laser-based digital systems.

(3) In 2025, the Company recorded goodwill impairment losses of $ 7.0 million (2024 — $ nil ;

2023 — $ nil ) related to the SSIMWAVE reporting unit, which is part of the Streaming and Consumer Technology operating segment.

(4) In 2025, the Company recorded impairment losses of $ 0.2 million (2024 — less than $ 0.1 million;

2023 — $ 0.4 million) related to the write-down of content-related film assets.

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2025 2024 2023

Net (decrease) increase in accruals related to:

Net decrease in accruals related to:

Investment in equipment supporting joint revenue sharing arrangements

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Significant non-cash financing activities

As of December 31, 2025, the Company had accrued and not yet paid a $ 1.0 million liability on the Consolidated Balance Sheets within Accounts Payable related to debt issuance costs for the issuance of the 2030 Convertible Notes.

In the fourth quarter of 2023, the Company recognized a $ 1.6 million liability on the Consolidated Balance Sheets within Accounts Payable related to repurchase of its common shares, which settled subsequent to December 31, 2023.

No such amounts were recognized in the fourth quarter of 2024.

No such amounts were recognized in the fourth quarter of 2024 and 2025.

Revenue from Contracts with Customers

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Dollars) Technology

Sales Image Enhancement and Maintenance Services

Sales Image Enhancement and

Maintenance Services

Rentals Finance Income

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Deferred Revenue

IMAX System sale and lease arrangements include a requirement for the Company to provide maintenance services over the life of the arrangement, some of which are subject to a consumer price index adjustment each year.

IMAX System sale and lease arrangements include a requirement for the Company to provide maintenance services over the life of the arrangement, some of which maintenance services are subject to a consumer price index adjustment each year.

In circumstances where customers prepay the entire term’s maintenance fee based on the original arrangement, additional payments are due to the Company for the years after its extended warranty and maintenance obligations expire.

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As of December 31, 2025, $ 28.3 million of consideration had been deferred in relation to outstanding maintenance services to be provided on existing maintenance contracts (December 31, 2024 — $ 26.5 million and 2023 — $ 22.8 million).

Maintenance revenue is recognized evenly over the contract term which coincides with the period over which maintenance services are provided.

In the event of customer default, any payments made by the customer may be retained by the Company.

In instances where the Company receives consideration prior to satisfying its performance obligations, the recognition of revenue is deferred.

The majority of the deferred revenue balance relates to payments received by the Company for IMAX Systems where control of the system has not yet transferred to the customer.

The deferred revenue balance related to an individual IMAX System increases as progress payments are made and is then derecognized when control of the system is transferred to the customer.

Recognition dates are variable and depend on numerous factors, including some outside of the Company’s control.

For the year ended December 31, 2025, $ 39.0 million of revenue was recognized that was included in the $ 52.7 million balance of deferred revenue as of December 31, 2024.

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To a lesser extent, the Technology Product and Services segment also earns revenue from certain ancillary theater business activities, including after-market sales of IMAX System parts and 3D glasses.

The Company’s activities that do not meet the criteria to be considered a reportable segment, principally the Company’s streaming and consumer technology business as well as other ancillary activities, are reported within “All Other.”

During the fourth quarter of 2025, the Company reorganized its operating and reporting structure to align with the manner in which management evaluates performance for SSIMWAVE and IMAX Enhanced on a combined basis.

As a result of this change, certain legacy operating segments were aggregated to form a new operating segment, “Streaming and Consumer Technology”.

This operating segment is included in “All Other”, as it does not meet the quantitative criteria for being a reportable segment.

Also included within “All Other” are other ancillary activities that do not meet the criteria to be considered a reportable segment.

The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies.

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No single customer comprises more than 10% of the Company’s total Accounts Receivable as of December 31, 2025 and 2024.

The following table presents the Costs and Expenses Applicable to Revenues for the Content Solutions segment that is made available to the CODM as part of the Company’s annual and quarterly financial reporting requirements in accordance with U.S.

The following table presents the Costs and Expenses Applicable to Revenues for the Content Solutions segment that has been made available to the CODM as part of the Company’s annual and quarterly financial reporting requirements in accordance with U.S.

Content Solutions Segment:

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438 3,292 594

Write-down of film assets

Other segment expenses (1)

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630 3,397 756

Write-down of inventory

Write-down of inventories

Other segment expenses (1)

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(1) Included within the Other segment expenses are costs related to the manufacturing and build of IMAX Systems recognized in the period, maintenance and warranty costs, and other product related costs.

Also included is a recovery of $ 0.5 million for insurance proceeds received during the year ended December 31, 2025, associated with inventory costs that were previously written off.

The total proceeds received were $ 0.7 million, and the incremental gain of $ 0.2 million was recognized in selling, general and administrative expenses.

The following table presents the Company’s assets by category and reportable segment, reconciled to consolidated assets, as of December 31, 2025 and 2024:

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Fair Value Measurements

The carrying values of the Company’s Cash and Cash Equivalents, Accounts Receivable, Variable Consideration, Accounts Payable, and Accrued Liabilities due within one year approximate their fair values due to the short-term maturity of these instruments.

The carrying values of the Company’s Cash and Cash Equivalents, Accounts Receivable, Variable Consideration, Accounts Payable, and Accrued and Other Liabilities due within one year approximate their fair values due to the short-term maturity of these instruments.

Including these instruments, the Company’s financial instruments consist of the following:

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( 743 ) ( 892 ) ( 230,000 ) ( 234,009 )

2030 Convertible Notes (6)

( 250,000 ) ( 278,708 ) — —

(1) Recorded at cost, which approximates fair value.

(2) Recorded at cost net of fair value adjustments and impairment charges.

(3) Fair value is determined using quoted prices in active markets.

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Dollars through the spot market.

In addition, because IMAX films generate box office in 90 different countries, unfavorable exchange

rates between applicable local currencies and the U.S.

In addition, because IMAX films generate box office in 91 different countries, unfavorable exchange rates between applicable local currencies and the U.S.

Dollar could have an impact on box office receipts and the Company’s revenues and results of operations.

5 unchanged sentences

The Company currently has cash flow hedging instruments associated with Selling, General and Administrative Expenses.

For foreign currency cash flow hedging instruments related to Selling, General and Administrative Expenses, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in Accumulated Other Comprehensive Loss and reclassified to the Consolidated Statements of Operations when the forecasted transaction occurs.

For foreign currency cash flow hedging instruments related to Selling, General and Administrative Expenses, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in Accumulated Other Comprehensive Loss (“AOCI”) and reclassified to the Consolidated Statements of Operations when the forecasted transaction occurs.

Any ineffective portion is recognized immediately in the Consolidated Statements of Operations.

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Foreign exchange contracts — Forwards

Derivative (Loss) Gain

Recognized in OCI

Derivative Gain (Loss)

Recognized in AOCI

(Effective Portion)

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$ ( 1,297 ) $ ( 607 ) $ ( 892 )

The Company’s estimated net amount of the existing loss as of December 31, 2024 is $ 2.0 million (2023 — $ 0.6 million), which is expected to be reclassified to earnings within the next twelve months.

The Company’s estimated net amount of the existing gain as of December 31, 2025 is $ 0.8 million (2024 — loss of $ 2.0 million), which is expected to be reclassified to earnings within the next twelve months.

Investments in Equity Securities

As of December 31, 2025, the Company held investments in the preferred shares of enterprises which meet the criteria for classification as an equity security carried at historical cost, net of impairment charges.

The carrying value of these equity security investments was $ 1.0 million as of December 31, 2024 (December 31, 2023 — $ 1.0 million) and is recorded in Other Assets.

Interest in Film

In 2022, IMAX (Shanghai) Culture and Technology Co., Ltd, a former wholly-owned subsidiary of IMAX China, entered into a joint film investment agreement with Wanda Film (Horgos) Co.

to invest RMB 30.0 million ($ 4.7 million) in the movie Mozart from Space, which was released on July 15, 2022.

Pursuant to the investment agreement, IMAX (Shanghai) Culture and Technology Co., Ltd.

has the right to receive a share of the profits or losses of the film distribution.

IMAX (Shanghai) Culture and Technology Co., Ltd.’s commitment is limited to its investment and has no further obligation if the actual movie production cost exceeds the original budget.

The investment meets the criteria for classification as a financial asset.

The investment is measured at amortized cost less impairment losses.

In 2022, the Company recognized a full impairment of its RMB 30.0 million ($ 4.5 million) investment in Mozart from Space based on projected box office results and distribution costs.

Upon conclusion of the film run, in 2023, the Company received proceeds of $ 0.3 million.

No contributions to film investments were made in 2024.

During the year ended December 31, 2025, the Company recorded an impairment charge of $ 1.0 million on the investment in equity securities as the carrying value exceeded the estimated fair value.

The carrying value of these equity security investments was $ nil as of December 31, 2025 (December 31, 2024 — $ 1.0 million) and is recorded in Other Assets.

Employers Pension and Postretirement Benefits

Defined Benefit Plan

The Company has an unfunded defined benefit pension plan, the Supplemental Executive Retirement Plan (the “SERP”), covering its CEO, Richard L.

The Company has an unfunded defined benefit pension plan, the SERP, covering its CEO, Richard L.

Under the terms of the SERP, if Mr.

1 unchanged sentence

SERP benefit payments to Mr.

Gelfond are subject to a deferral for six months after the termination of his employment, at which time Mr.

Gelfond are subject to a deferral for 6 months after the termination of his employment, at which time Mr.

Gelfond will be entitled to receive interest on the deferred amount credited at the applicable federal rate for short-term obligations.

Pursuant to an amendment to his employment agreement dated September 19, 2022, the term of Mr.

Gelfond’s employment was extended through December 31, 2025, although Mr.

Gelfond has not informed the Company that he intends to retire at that time.

Pursuant to an amendment to his employment agreement dated July 17, 2025, the term of Mr.

Gelfond’s employment was extended through December 31, 2028.

Under the terms of his employment agreement, as amended, the total benefit payable to Mr.

7 unchanged sentences

Interest cost

Actuarial (gain) loss

Actuarial gain

( 2,340 ) ( 26 )

Obligation, end of year and unfunded status

41 unchanged sentences

Gelfond and Bradley J.

Wechsler, former Chairman of the Company’s Board of Directors (the “Executive Postretirement Benefit Plan”).

The Executive Postretirement Benefit Plan provides that the Company will maintain health benefits for Messrs.

Wechsler, former Co-CEO and Chairman of the Company’s Board of Directors (the “Executive Postretirement Benefit Plan”).

The Executive Postretirement Benefit Plan provides that

the Company will maintain health benefits for Messrs.

Gelfond and Wechsler until they become eligible for Medicare and, thereafter, the Company will provide Medicare supplemental coverage as selected by Messrs.

8 unchanged sentences

Benefits paid ( 12 ) ( 10 )

Actuarial (gain) loss

Actuarial gain

Obligation, end of year and unfunded status

7 unchanged sentences

( 69 ) ( 44 ) ( 65 )

Pension (income) expense

Pension income

$ ( 42 ) $ ( 20 ) $ ( 42 )

30 unchanged sentences

Actuarial loss

Unrealized foreign exchange (gain) loss

Unrealized foreign exchange loss (gain)

Obligation, end of year and unfunded status

8 unchanged sentences

$ 36 $ 29 $ 30

The Company expects interest costs of less than $ 0.1 million to be recognized as a component of benefit cost for the year ended December 31, 2025.

The Company expects interest costs of $ 0.1 million to be recognized as a component of benefit cost for the year ended December 31, 2026.

As of December 31, 2025, 2024, and 2023, the following amounts related to the Canadian Postretirement Benefit Plan were recorded on the Company’s Consolidated Balance Sheets within Accumulated Other Comprehensive Loss and will be recognized as components of net pension cost in future periods:

2 unchanged sentences

2025 2024 2023

Unrealized foreign exchange gain

Unrealized actuarial gain

$ ( 315 ) $ ( 323 ) $ ( 336 )

24 unchanged sentences

Refer to Note 13, “Borrowings.”

IMAX China receives local district grants primarily related to taxes paid, including corporate income taxes, value-added taxes, individual income taxes, and withholding taxes for dividends and/or cross-border activities.

IMAX China receives local district grants primarily related to taxes paid, including corporate income taxes, value-added taxes, and withholding taxes for dividends and/or cross-border activities.

Government grants are recognized in the period the costs were incurred.

3 unchanged sentences

2023 — $ 3.4 million).

Employee Retention Credit

In 2025, the Company recognized $ 4.0 million in benefits received from the Internal Revenue Service under the Employee Retention Credit (“ERC”) program which provides for a refundable tax credit for eligible businesses that had employees and were affected during the COVID-19 pandemic.

During the year ended December 31, 2025, the ERC was classified as a reduction to Selling, General and Administrative Expenses ($ 2.7 million) and Costs and Expenses Applicable to Revenues ($ 1.3 million).

No such credits were received in 2024 and 2023.

Non-Controlling Interests

18 unchanged sentences

$ 680 $ 658 $ 722

Net income (loss)

Net (loss) income

( 14 ) 22 ( 64 )

1 unchanged sentence

$ 666 $ 680 $ 658

Restructuring and Other Charges

In 2024, the Company incurred $ 2.4 million (2023 — $ 1.3 million;

2022 — $ nil ) in connection with the assessment of its organizational structure and implementation of such plan, including the elimination of redundant roles and addressing spans and layers to capture efficiencies and centralize certain operational roles.

Additionally, the Company incurred $ 1.3 million of non-recurring fees related to the assessment of its corporate structure and the resulting internal asset sale.

In 2023, the Company recognized executive

transition costs of $ 1.4 million associated with the departure of the President, IMAX Entertainment and Executive Vice President of the Company.

These charges have been recognized in Restructuring and other charges in the Consolidated Statements of Operations.

In the fourth quarter of 2024, the Company recognized a $ 1.4 million liability (December 31, 2023 — $ 0.9 million) on the Consolidated Balance Sheets within Accrued and other liabilities related to Restructuring and other charges, which is expected to be paid subsequent to year-end.

Subsequent Events

On February 1, 2025, the new U.S.

administration signed an executive order that imposes tariffs on imported goods from Canada.

On February 3, 2025 the U.S.

administration agreed to delay implementing these tariffs on Canadian imports for 30 days to allow for further negotiations with Canada.

If no agreement is reached, the U.S.

could potentially start applying tariffs based on the executive order on Canadian-origin goods imported into the U.S.

in the near future.

The Company is in the process of evaluating the potential impact to the business as a result of these potential tariffs.

Restructuring Charges and Other Impairments

In 2025, the Company recognized $ 2.5 million (2024 — $ 3.7 million;

2023 — $ 2.9 million) in Restructuring charges and other impairments in the Consolidated Statements of Operations.

These charges primarily reflect the Company’s strategic initiatives to streamline operations, reduce costs, and enhance organizational efficiency.

The Company incurred termination charges of $ 1.4 million (2024 — $ 2.4 million;

2023 — $ 1.3 million) in connection with its plan to optimize its organizational structure, including eliminating redundant roles, addressing spans and layers to capture efficiencies and centralizing certain operational roles, and $ 0.7 million in connection with the writedown of the SSIMWAVE customer relationship intangible asset.

In addition, the Company’s recognized $ 0.4 million (2024 — $ 1.3 million;

2023 — $ nil ) of fees relating to the assessment of its corporate structure and the resulting 2024 internal asset sale.

As of December 31, 2025, the Company’s liability was $ 1.4 million liability (December 31, 2024 — $ 1.4 million) on the Consolidated Balance Sheets within Accrued and other liabilities related to Restructuring charges and other impairments.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data