READING INTERNATIONAL INC

RCES

Our Financing Strategy

In 2025, due primarily to the negative operating conditions caused by the 2023 Hollywood strikes and increased interest rates, as well as the lingering impacts from the COVID-19 pandemic, we (i) conserved our cash and chose to defer non-essential capital expenditures (such as cinema upgrades and refurbishments), (ii) refinanced our existing debt to provide longer maturity dates and eased financial covenants and/or obtained waivers of financial ratio tests, and (iii) monetized two real estate assets and identified certain other assets as candidates for potential monetization to raise additional liquidity. In January 2025, we sold our Courtenay Central properties in New Zealand at a gross sale price of $21.5 million. The proceeds were used to pay off the Westpac mortgage on the property, and to reduce our Bank of America debt. In May 2025, we sold our Cannon Park ETC in Australia at a gross sale price of $20.7 million. The proceeds were used principally to pay off our NAB bridging facility, and to reduce our Bank of America debt.

In May 2025, we extended the maturity of our loan on 44 Union Square to November 6, 2026, with an option to extend further to May 6, 2027. In July 2025, we extended the maturity of our Bank of America/Bank of Hawaii loan to May 18, 2026. We further extended the maturity of our Bank of America/Bank of Hawaii loan to September 18, 2026, in December 2025. In July 2025, we extended the maturity of our loan on our Live Theatre assets in NYC to June 1, 2026. In November 2025, we extended the maturity of our National Australia Bank (“NAB”) loan to July 31, 2030, and modified the principal repayment schedule and extended the maturity of our Valley National Bank Loan to October 1, 2026. In December 2025, we completed the purchase of Sutton Hill Associates, a California general partnership. As a result of that transaction, we acquired the 25% minority interest in our Cinemas 1,2,3 that we did not already own and the ground lessee’s interest in the land and improvements constituting our Village East Theatre, subject to certain indebtedness owed by Sutton Hill Associates to a third party. That indebtedness, at December 30, 2025, had a face amount of $13.6 million, interest payable quarterly at 4.75% per annum with all principals due and payable in a bullet on September 30, 2035. Due to the extended term of the debt and the below market interest rates, at December 30, 2025, we carried that debt at its fair value of $7.7 million. As a result of the transaction, approximately $7.1 million in short term obligations were eliminated in consolidation.

During 2025, our bank loans with Bank of America, and NAB required that our Company comply with certain covenants. We either complied with the underlying bank covenants or obtained waivers from compliance.

During 2024 and 2025, we also worked to restructure our rent payments under various cinema leases. As a result of these negotiations, we have been able to defer rent payments of approximately $11.5 million to be paid out in the next five years.

We have set as a goal for 2026 to substantially reduce our secured U.S. bank debt. Accordingly, we have classified as an asset held for sale our Newbury Yard rail yard in Williamsport, Pennsylvania and in February 2026, we retained Newmark & Company Real Estate, Inc to monetize our Cinemas 1,2,3 property in Manhattan. While no assurances can be given, we believe it reasonable to assume that these assets can be monetized before the end of the third quarter of this year.

Generally speaking, we believe our relationship with our landlords and lenders is good.

For more information about our borrowings, including loan modifications and modifications to waivers of certain covenants, please refer to Part II, Item 8 – Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 2 – Liquidity, and Note 13 – Borrowings.

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The table below presents the changes in our total available resources (cash and borrowings), debt-to-equity ratio, working capital, and other relevant information addressing our liquidity for the last five years:

(1)This relates to the construction facilities specifically negotiated for 44 Union Square redevelopment project.

(2)Typically, our working capital is reported as a deficit, as we receive revenue from our cinema business ahead of the time that we have to pay our associated liabilities. We use the money we receive to pay down our borrowings in the first instance.

We endeavor to manage our cash, investments, and capital structure to meet the short-term and long-term obligations of our business, while maintaining financial flexibility and liquidity. We forecast, analyze, and monitor our cash flows to enable investment and financing within the overall constraints of our financial strategy. In the past, we used cash generated from operations and other excess cash to the extent not needed for any capital expenditure, to pay down our loans and credit facilities providing us some flexibility on our available loan facilities for future use and thereby, reducing interest charges. To meet our liquidity’s needs, in 2025, we have worked with our lenders to extend the maturity of various loans.

Refer to Part II, Item 8 – Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements-- Note 13 – Borrowings for further details on our various borrowing arrangements.

On December 31, 2025, our consolidated cash and cash equivalents totaled $10.5 million. Of this amount, $3.3 million, $6.8 million and $0.4 million were held by our U.S., Australian and New Zealand operations, respectively. The funds held in Australia and New Zealand are, under our applicable bank lending arrangement, subject to limitations on their use outside of Australia or New Zealand as applicable. Due to the impact of the COVID-19 pandemic, the lack of U.S. Federal assistance (including funds from the Payroll Protection and Shuttered Venue Programs), the 2023 Hollywood strikes and continuing funding needs in the U.S. we no longer intend to indefinitely reinvest offshore any earnings derived from our Australian and New Zealand operations.

We have historically funded our working capital requirements, capital expenditures and investments in individual properties primarily from a combination of internally generated cash flows and debt. During 2025, the need for such funding for capital expenditures and investments has decreased, as we have deferred to the fullest extent reasonable such expenditures. However, due primarily to the 2023 Hollywood strikes and the increase in interest rates, our operating income is still insufficient to cover our costs and expenses accordingly, our negative working capital has increased over the course of the year. The funding that has been required, has been funded predominantly from cost reductions, bridge facility debt and strategic asset sales and landlord concessions. As noted in the preceding table, we had no unused available unrestricted corporate credit facilities at December 31, 2025.

The change in cash and cash equivalents for the three years ended December 31, 2025 is as follows:

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Operating Activities

Cash used in operating activities for the twelve months ended December 31, 2025 decreased by $2.3 million, to cash used of $1.6 million comparedto cash used in the same period of prior year of $3.8 million, driven by a decrease in Net operating Loss of $11.5 million, offset by a $9.3 million decrease in net payable primarily due to increase in receivables and a smaller increase in accounts payable and accrued expense plus deferred revenues and other liabilities.

Investing Activities

Cash provided in investing activities during the twelve months ended December 31, 2025, increased by $33.1 million, to cash provided of $37.1 million from a cash provided of $4.0 million in the same period of prior year. This was due to the proceeds from sale of our Cannon Park property assets in May 2025 and the Wellington property assets in January 2025, compared to the proceeds from the sale of our Culver City office in February 2024.

Financing Activities

Cash used in financing activities for the twelve months ended December 31, 2025, increased by $38.2 million, from a cash provided of $0.3 million to a cash used of $37.9 million. This was primarily due to the paydowns of our Westpac debt, Bank of America debt and NAB Bridge Facility in 2025 as discussed previously.

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGEN