National CineMedia, Inc.

BASISOF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NCM, Inc. was incorporated in Delaware as a holding company formed with the purpose of becoming a member and sole manager of NCM LLC, a limited liability company primarily owned by NCM, Inc. The terms “NCM”, “the Company” or “we” shall, unless the context otherwise requires, be deemed to include the consolidated entity. NCM, Inc. has no business operations or material assets other than its cash and cash equivalents and ownership interest of 100.0% of the common membership units in NCM LLC as of January 1, 2026.

The Company operates the largest cinema advertising network reaching movie audiences in the U.S., allowing NCM LLC to sell advertising under long-term ESAs with the ESA Parties and certain third-party network affiliates, under long-term network affiliate agreements. As of January 1, 2026, the weighted average remaining term of the ESAs is approximately 15.6 years. The network affiliate agreements expire at various dates between March 31, 2026 and July 13, 2033, with our largest affiliate agreement expiring on July 13, 2033. The weighted average remaining term of the ESAs and the network affiliate agreements together is 11.8 years as of January 1, 2026. In November of 2025, NCM extended its reach by acquiring Spotlight and the Spotlight Cinema Network, a U.S. cinema advertising company dedicated to serving art house, luxury and dine-in exhibitors. Spotlight and the Spotlight Cinema Network presents the CineLife® Show exclusively in 108 leading national and regional theater circuits consisting of more than 1,200 screens in over 200 theaters.

In accordance with the Common Unit Adjustment Agreement, Cinemark has the right to potentially receive additional common membership units in NCM LLC in the future. Following the effectiveness of the AMC Termination Agreement, AMC will no longer receive NCM LLC membership units as part of the Common Unit Adjustment Agreement. As of January 1, 2026, AMC and Cinemark have no ownership interest in NCM LLC. AMC and Cinemark and their affiliates are referred to in this document as “ESA Parties”.

NCM, Inc.’s primary source of cash flow from operations is distributions from NCM LLC pursuant to the NCM LLC Operating Agreement. NCM, Inc. also receives management fees pursuant to a management services agreement with NCM LLC in exchange for providing specified management services to NCM LLC.

Basis of Presentation

The Company has prepared its Consolidated Financial Statements and related notes of NCM, Inc. in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made and all intercompany accounts have been eliminated in consolidation. The Company has reclassified certain historical amounts on the Consolidated Balance Sheets, Statements of Operations and Statements of Cash Flows to conform to current period presentation. In the year ended December 26, 2024, the Company reclassified certain historical expenses on the audited Consolidated Statements of Operations from ‘Advertising operating costs’ and ‘Network costs’ to ‘Network operating costs’ and certain historical expenses from ‘Advertising operating costs’ and ‘ESA theater access fees and revenue shares’ to ‘Theater exhibition fees’ to conform to current period presentation. As a result of the various related-party agreements discussed in Note 9—Related Party Transactions, the operating results as presented are not necessarily indicative of the results that might have occurred if all agreements were with non-related third parties.

Estimates—The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to the reserve for uncollectible accounts receivable, share-based compensation, income taxes, intangible assets, the valuation of NCM LLC upon deconsolidation and reconsolidation and the valuation of strategic investments upon acquisition. Actual results could differ from those estimates.

Bankruptcy Filing, Deconsolidation and Reconsolidation of NCM LLC—On April 11, 2023, NCM LLC filed a voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of Title 11 of the United States Code in the Bankruptcy Code in the Bankruptcy Court (the “Chapter 11 Case”). During the Chapter 11 Case, the Company was deemed to no longer control NCM LLC for accounting purposes and NCM LLC was deconsolidated from the Company’s financial statements prospectively as of April 11, 2023. NCM LLC does not have a readily determinable fair value. Upon the deconsolidation of NCM LLC, the original cost of the investment was valued based upon NCM, Inc.'s ownership of the secured debt of NCM LLC and the estimation of the enterprise value of NCM LLC utilizing a combination of a market approach and income approach. The market approach relied upon a comparison with guideline public companies and entails selecting relevant financial information of the subject company and capitalizing those amounts using valuation multiples that are based on empirical market observation. The income approach relied upon an analysis of NCM LLC’s projected economic earnings discounted to present value. Significant assumptions utilized within these analyses include the weighted average cost of capital and NCM LLC’s forecasted cash flows.

Upon emergence from bankruptcy, NCM, Inc., regained control and retained 100.0% ownership of NCM LLC, after taking into account elections by the holders of Secured Debt Claims to receive NCM, Inc. common stock in lieu of NCM LLC common units and was therefore reconsolidated into the Company’s financial statements prospectively as of August 7, 2023 akin to an acquisition under ASC 805 – Business Combinations. The acquisition method requires the Company to make significant estimates and assumptions, especially at the acquisition date as the Company allocates the estimated fair values of acquired tangible and intangible assets and the liabilities assumed. The Company also uses our best estimates to determine the useful lives of the tangible and definite-lived intangible assets, which impact the periods over which depreciation and amortization of those assets are recognized. All balances within the Company’s financial statements reflect NCM LLC activity only for the periods while consolidated, including all of the year ended January 1, 2026 and December 26, 2024 and for the year ended December 28, 2023, December 30, 2022 through April 11, 2023 and August 7, 2023 through December 28, 2023.

Significant Accounting Policies

Accounting Period—The Company has a 52-week or 53-week fiscal year ending on the first Thursday after December 25. Fiscal year 2023 contained 52 weeks, 2024 contained 52 weeks and 2025 contained 53 weeks. Throughout this document, the fiscal years are referred to as set forth below:

Revenue Recognition—The Company derives revenue principally from the sale of advertising to national, regional and local businesses in Noovie®, our cinema advertising and entertainment show seen on movie screens across the U.S., as well as on our LEN, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising, promotions and experiences in theater lobbies. In addition, the Company sells data and digital advertising, including through NCM Boost℠, Boomerang℠, Bullseye℠ and Blueprint℠as well as advertising in a variety of complementary out of home venues. The Company also has a long-term agreement to exhibit the advertising of the ESA Parties’ beverage suppliers. The Company considers the terms of each arrangement to determine the appropriate accounting treatment as more fully discussed in Note 2—Revenue from Contracts with Customers.

Operating Costs—The Company classifies its core operating expenses within the following categories on the audited Consolidated Statements of Operations:

Network operating costs—This balance relates to advertising fulfillment-related operating costs primarily consisting of personnel costs, satellite bandwidth, repairs and other costs of maintaining and operating the digital network as well as preparing advertising and other content for transmission across the digital network. To a lesser extent, this balance also includes production costs of non-digital advertising and revenue share and per patron based fees due to certain sales partners.

Theater exhibition fees—This balance relates to fees the Company pays its ESA Parties and network affiliates in return for the rights to advertise in their theaters. These fees vary by exhibitor, but may be comprised of a revenue share or the combination of a payment per theater attendee, a payment for post-showtime advertising, a payment per digital screen or digital cinema projector equipped in the theaters, all of which may escalate over time, and a revenue share for the Platinum Spot or other premium advertising spots, when sold.

Selling and marketing costs—This balance consists primarily of sales personnel costs including sales commissions and selling related expenses such as travel, barter and bad debt expense; marketing expenses including research subscriptions and studies and production costs for internal segments shown within The Noovie®Show; lease expense for the Company’s sales offices and costs associated with digital inventory, including revenue shares paid to DOOH and other partners.

Administrative and other costs—This balance consists of personnel costs for the Company’s executives as well as administrative functions including legal, information technology and accounting, lease expense for the Company’s headquarters, legal and professional fees, cloud computing costs for the Company’s cinema advertising management system and repairs and maintenance costs.

Cash and Cash Equivalents—All highly liquid debt instruments and investments purchased with an original maturity of three months or less are classified as cash equivalents and are considered available-for-sale securities. The Company held cash balances in a bank in excess of the federally insured limits or in the form of a money market demand account with a major financial institution as of January 1, 2026 and December 26, 2024. The Company has elected the fair value option for valuing its cash equivalents. The cash equivalents are valued at fair value at each balance sheet date and the change in value from the prior period is recognized within “Other non-operating income, net” on the audited Consolidated Statements of Operations.

Restricted Cash—The Company’s restricted cash balance was$3.0 million and $3.0 million for the years ended January 1, 2026 and December 26, 2024, respectively. The balance is related to unsettled, agreed upon payments to NCM LLC’s unsecured creditors within the escrow accounts and included within “Accounts payable” on the audited Consolidated Balance Sheets.

Marketable Securities—The Company’s marketable securities are classified as available-for-sale and are reported at fair value. The fair value of substantially all securities is determined by quoted market information and pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The estimated fair value of securities for which there are no quoted market prices is based on similar types of securities that are traded in the market. The change in value from the prior period is recognized within “Other non-operating income, net” on the audited Consolidated Statements of Operations.

Concentration of Credit Risk and Significant Customers—The risk of credit loss related to the Company's trade receivables and unbilled receivables balances is accounted for through the allowance for credit losses, a contra asset account which reduces the net receivables balance. The allowance for credit losses balance is determined by pooling the Company's receivables with similar risk characteristics, specifically by type of customer (national or local/ regional) and then age of receivable and applying historical write-off percentages to these pools in order to determine the amount of expected credit losses as of the balance sheet date. National receivables are with large advertising agencies with strong reputations in the advertising industry and clients with stable financial positions and good credit ratings, represent larger receivables balances per customer and have significantly lower historical and expected credit loss patterns. Local and regional receivables are with smaller companies sometimes with less credit history and represent smaller receivable balances per customer and higher historical and expected credit loss patterns. The Company has smaller contracts with many local clients that are not individually significant. The Company also considers current economic conditions and trends to determine whether adjustments to historical loss rates are necessary. The Company also reserves for specific receivable balances that it expects to write off based on known concerns regarding the financial health of the customer. Receivables are written off when management determines amounts are uncollectible. The Company did not have any agencies through which it sourced advertising revenue that accounted for 10% or more of the Company’s gross outstanding receivable balance as of January 1, 2026. The Company hadone agency through which it sourced advertising revenue that accounted for 14.7% of the Company’s gross outstanding receivable balance as of December 26, 2024. During the year ended December 26, 2024, the Company didnot have a customer that accounted for 10% or more of the Company's revenue. During the years ended January 1, 2026 and December 28, 2023, the Company hadone customer that accounted for 11.0% and 11.2% of the Company's revenue, respectively.

Receivables consisted of the following (in millions):

Property and Equipment—Property and equipment is stated at cost, net of accumulated depreciation or amortization. Generally, the equipment associated with the digital network of the ESA Party theaters is owned by the ESA Parties, while the equipment associated with network affiliate theaters is owned by the Company. Major renewals and improvements are capitalized, while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. The Company records depreciation using the straight-line method over the following estimated useful lives:

Software and website development costs developed or obtained for internal use are accounted for in accordance with ASC 350—Internal Use Software and ASC 350–Website Development Costs. The subtopics require the capitalization of certain costs incurred in developing or obtaining software for internal use. Software costs related primarily to the Company’s cinema advertising management system, digital products, digital network distribution system (DCS), enterprise resource planning system and website development costs, which are included in equipment, and are depreciated over threetoten years. As of January 1, 2026 and December 26, 2024, the Company had a net book valueof $8.9 million and $9.1 million, respectively, of capitalized software and website development costs. Depreciation expense related to software and website development was approximately $2.3 million,$2.4 million and $1.8 million for the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively. The subtopics also require the capitalization of certain implementation costs related to qualifying Cloud Computing Arrangements (“CCAs”) upon adoption of ASU 2018-15—Intangibles - Goodwill and Other - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contractas of September 28, 2018. As of January 1, 2026 and December 26, 2024, the Company had a net book value of $4.3 million and $4.3 million of capitalized implementation costs for CCAs, respectively, recorded within “Other assets” in the Consolidated Balance Sheets. These costs primarily relate to the Company's hosted cinema advertising management system which was implemented in January 2021. Depreciation expense related to capitalized implementation costs for CCAs was approximately $0.7 million, $0.6 million and $0.5 million for the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively. These costs are amortized to “Administrative and other costs” within the audited Consolidated Statements of Operations over the life of the hosting arrangement beginning at implementation. For the years ended January 1, 2026, December 26, 2024 and December 28, 2023, the Company recorded $3.1 million, $3.3 million and $3.0 million in research and development expense, respectively.

The Company assesses impairment of property and equipment pursuant with ASC 360 –Property, Plant and Equipment. This includes determining if certain triggering events have occurred that could affect the value of an asset. The Companydidnot record any losses related to property and equipment during the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively.

Investments—The Company's equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured at cost with adjustments for observable changes in price or impairments in accordance with the measurement alternative. The Company performs a qualitative assessment on a periodic basis and recognizes an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in 'Other non-operating income, net' within the audited Consolidated Statements of Operations.

Intangible Assets—The Company’s intangible assets consist of contractual rights to provide its services within the theaters under the ESAs and the network affiliate agreements, customer relationships developed and maintained by the Company’s sales force, trademarks held and used by the Company and datasets obtained. The intangible assets are stated at their estimated fair values upon the reconsolidation of NCM LLC on August 7, 2023 as further described within Note 5—Business Combinations, net of accumulated amortization. Subsequently acquired intangible assets are recorded at cost or their estimated fair values. The Company records amortization using the straight-line method over the estimated useful life of the intangibles, corresponding to the expected term of the ESAs, the average renewable term of the contracts with the network affiliates and affiliates within the Spotlight Cinema Network, industry standard lives for customer relationships and trademarks, contractual life for noncompete assets and for the datasets, to the shorter of the use rights outlined in the contract under which they were acquired and the estimated rate of obsolescence of the datasets' usefulness. Intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. In its impairment testing, the Company estimates the fair value of the intangible asset by determining the estimated future cash flows associated with the ESAs, network affiliate agreements, trademarks and noncompete agreements or the estimated replacement cost of the customer relationships and datasets. If after determining that gross cash flows are insufficient to recover the asset, the estimated fair value is less than the carrying value, the Company determines the fair value of the intangible asset and an impairment is recorded to write down the asset to its estimated fair value. Significant judgment is involved in estimating long-term cash flow forecasts and replacement costs.

The Company has elected to capitalize extension costs on its intangible assets and thus capitalized the legal and professional costs incurred in conjunction with the 2025 AMC Agreement.

Amounts Due to/from ESA Parties—Amounts due to/from ESA Parties include amounts due for the theater access fees and revenue share, offset by a receivable for advertising time purchased by the ESA Parties on behalf of their beverage concessionaire, plus any amounts outstanding under other contractually obligated payments. Payments to or received from the ESA Parties against outstanding balances are made monthly. Available cash distributions are made quarterly contingent upon the Cinemark's ownership of NCM LLC membership units, the Company's compliance with the covenants outlined within the Revolving Credit Facility 2025 and in accordance with the NCM LLC Operating Agreement.

Income Taxes—Income taxes are accounted for under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which differences are expected to be recovered or settled pursuant to the provisions of ASC 740 – Income Taxes. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records a valuation allowance if it is deemed more likely than not that all or a portion of its deferred income tax assets will not be realized, which will be assessed on an on-going basis. Only the portion of deferred income tax assets deemed more likely than not to be realized and three years of financial projections are considered within the calculation of the payable to the ESA Parties under the TRA which is equal to 90% of the Company’s actual tax benefit realized from the tax amortization of the basis difference for qualifying deferred income tax assets. The Company determined that a three year forecast period is appropriate as it represents the period for which the Company can reasonably estimate future taxable income. The estimated payable is sensitive to both changes in the period that can be reasonably forecasted as well as estimates of future taxable income. The payable may fluctuate within one year of the financial statement date to revisions in these assumptions. Refer to Note 7—Income Taxes to the audited Consolidated Financial Statements for discussion of changes within the Company's valuation allowance on its deferred tax assets and the payable to the ESA Parties under the TRA during the years ended January 1, 2026 and December 26, 2024.

In addition, income tax rules and regulations are subject to interpretation and the application of those rules and regulations require judgment by the Company and may be challenged by the taxation authorities. The Company follows ASC 740-10-25, which requires the use of a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions. Only tax positions that meet the more likely than not recognition threshold are recognized.

The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the Consolidated Financial Statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

Debt Issuance Costs—In relation to the issuance of outstanding debt discussed in Note 10—Borrowings, there is a balance of $0.7 million and $1.6 million in deferred financing costs as of January 1, 2026 and December 26, 2024, respectively. The debt issuance costs are being amortized on a straight-line basis over the terms of the underlying obligations and are included in interest on borrowings, which approximates the effective interest method. Debt issuance costs are written-off in the event that the underlying debt is extinguished through partial or full repayment of the obligation.

The changes in debt issuance costs are as follows (in millions):

Share-Based Compensation—During 2025, the Company issued stock options and restricted stock units to certain employees and its independent directors. These restricted stock unit grants for Company management vest upon the achievement of Company three-year cumulative performance measures and/or service conditions, while non-management grants vest only upon the achievement of service conditions. During 2024, the Company issued restricted stock units to certain employees and its independent directors. These restricted stock unit grants for Company management vest upon the achievement of Company performance measures, market conditions and/or service conditions, while non-management grants vest only upon the achievement of service conditions. During 2023, the Company issued stock options and restricted stock units which vest upon the achievement of Company three-year cumulative performance measures and service conditions or only service conditions. The Company recognizes share-based compensation net of an estimated forfeiture rate. Compensation expense of restricted stock units that vest upon the achievement of Company performance measures is based on management’s financial projections and the probability of achieving the projections, which requires considerable judgment. A cumulative adjustment is recorded to share-based compensation expense in periods that management changes its estimate of the number of shares expected to vest. Ultimately, the Company adjusts the expense recognized to reflect the actual vested shares following the resolution of the performance conditions. Compensation expense of restricted stock units that vest upon achievement of certain market conditions is based on an estimate of the fair value of the granted restricted stock units on the grant date utilizing the Monte Carlo model, which requires considerable judgment. The fair value of the granted restricted stock units is expensed over an estimated derived service period, which also requires considerable judgment. In accordance with ASC 718—Stock Compensation, the Company does not adjust the expense recognized to reflect the actual vested shares following the resolution of the market condition. Dividends are accrued when declared on unvested restricted stock units that are expected to vest and are only paid with respect to shares that actually vest.

Compensation cost of stock options is based on the estimated grant date fair value using the Black-Scholes option pricing model, which requires that the Company make estimates of various factors. Under the fair value recognition provisions of ASC 718, Compensation—Stock Compensation, the Company recognizes share-based compensation net of an estimated forfeiture rate, and therefore only recognizes compensation cost for those shares expected to vest over the requisite service period of the award. Refer to Note 11—Share-Based Compensation for more information.

Share Repurchase Program—On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period ofthree years. Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. During the year ended January 1, 2026 and December 26, 2024,4.1 million and 2.5 million shares were repurchased on the open market, respectively. In accordance with ASC 505 —Equity, the Company elected to retire the shares. Upon the retirement of these shares, the excess over par value paid, inclusive of direct costs, of $22.3 million and $13.4 million was recorded as a reduction to retained earnings for the year ended January 1, 2026 and December 26, 2024, respectively.

Fair Value Measurements—Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1– Quoted prices in active markets for identical assets or liabilities.

Level 2– Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3– Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Segment Reporting—Advertising is the principal business activity of the Company and is the Company’s only operating and reportable segment under the requirements of ASC 280—Segment Reporting. The Company’s chief executive officer is the chief operating decision maker who reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. The accounting policies of the one operating and reportable segment are the same as those described in the summary of significant accounting policies. All segment revenues relate to services performed within the United States. The Company’s segment assets are generated and domiciled within the United States.

The chief operating decision maker assesses performance for theone operating and reportable segment and decides how to allocate resources using consolidated net (loss) income, as presented on the Consolidated Statement of Operations as ‘Consolidated net (loss) income’, among other measures. Consolidated net (loss) income is presented herein as the primary measure as it most closely aligns with US GAAP. The chief operating decision maker uses consolidated net (loss) income to decide whether to utilize profits to invest in the Company or to recommend actions to the Board of Directors such as stock repurchases or future dividends. Consolidated net (loss) income is also utilized to monitor actual results as compared to budgeted expectations to assess the performance of the one operating and reportable segment and in establishing management’s compensation. The Company’s significant segment expenses are consistent with the operating expense financial statement line items as presented within the Consolidated Statement of Operations. The Company’s other segment items are consistent with the non-operating income and expense financial statement line items as presented within the Consolidated Statement of Operations.

The measure of segment assets used to allocate resources is total assets as reported on the Consolidated Balance Sheets, inclusive of cash and cash equivalents as well as accounts receivable as reported on the Consolidated Balance Sheets as ‘Cash and cash equivalents’ and ‘Receivables, net of allowance’, respectively.

Capital Expenditures—Capital expenditures include digital applications being developed primarily by the Company’s programmers and outside consultants, capitalized software development or upgrades for the Company’s Digital Content Software, audience targeting and data management systems, cinema advertising management system, equipment required for the Company’s Customer Experience Center and content production and post-production facilities, office leasehold improvements, desktop equipment for use by employees, and in certain cases, the costs necessary to install equipment at or digitize all or a portion of a network affiliate’s theaters when they are added to the Company’s network. Capital expenditures for the years ended January 1, 2026, December 26, 2024 and December 28, 2023 were $5.6 million, $5.8 million and $3.3 million, respectively.

Consolidation—NCM, Inc. consolidates the accounts of NCM LLC under the provisions of ASC 810—Consolidation (“ASC 810”). Under Accounting Standards Update 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-2”), a limited partnership is a variable interest entity unless a simple majority or lower threshold of all limited partners unrelated to the general partner have kick-out or participating rights. The non-managing members of NCM LLC do not have dissolution rights or removal rights. NCM, Inc. has evaluated the provisions of the NCM LLC membership agreement and has concluded that the various rights of the non-managing members are not substantive participating rights under ASC 810, as they do not limit NCM, Inc.’s ability to make decisions in the ordinary course of business. The Company concluded that NCM LLC is a variable interest entity and determined that NCM, Inc. should consolidate the accounts of NCM LLC pursuant to ASU 2015-2 because 1) it has the power to direct the activities of NCM LLC in its role as managing member and 2) NCM, Inc. has the obligation to absorb losses of, or the right to receive benefits from NCM LLC, that could potentially be significant provided its 100.0% ownership in NCM LLC. Upon NCM LLC’s emergence from bankruptcy, it was determined that NCM, Inc. continues to hold the current rights that give it power to direct activities of NCM LLC that most significantly impact NCM LLC’s economic performance and that NCM, Inc. continues to have the rights to receive the significant benefits or the obligations to absorb potentially significant losses, resulting in NCM, Inc. having a controlling financial interest in NCM LLC. As a result, NCM, Inc. was deemed to be the primary beneficiary of NCM LLC and the Company has consolidated NCM LLC under the variable interest entity provisions of ASC 810—Consolidation.

The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions):

Recently Adopted Accounting Pronouncements

In January 2024, the FASB issued Accounting Standards Update No. 2023-09, Income Tax Disclosures (“ASU 2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. This guidance is effective for issuances on annual periods beginning on and after December 15, 2024. The Company adopted this standard prospectively effective December 26, 2024 and included incremental disclosures within Note 7— Income Taxes. These addi tional disclosures didnot have a material impact on the Company’s Consolidated Financial Statements.

The Company did not adopt any other accounting pronouncements during the years ended January 1, 2026 and December 26, 2024.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2024-03, Expense Disaggregation Disclosures (“ASU 2024-03”), which expands the disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions. Under the new guidance, entities must disclose additional information about certain costs and expenses on an annual and interim basis to enable investors to develop more decision-useful financial analyses. This guidance is effective for issuances on and after December 15, 2026. The Company is still evaluating the expected impact this will have on the Company’s Consolidated Financial Statements.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internally developed software costs. Under the new guidance, the accounting will better align with how software is developed and eliminates the stage-based rules by establishing a principles-based framework consistent with modern software development practices. This guidance is effective for issuances on and after December 15, 2027. The Company is still evaluating the expected impact this will have on the Company’s Consolidated Financial Statements.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its Consolidated Financial Statements or notes thereto.

REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

The Company derives revenue principally from the sale of advertising to national, regional and local businesses in Noovie®, our cinema advertising and entertainment show seen on movie screens across the U.S., as well as on our LEN, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising, promotions and experiences in theater lobbies. In addition, the Company sells data and digital advertising, including through NCMBoost SM, Boomerang SM, Bullseye SM and Blueprint SM. Further the Company sells advertising in a variety of complementary out of home venues. The Company also has a long-term agreement to exhibit the advertising of the ESA Parties’ beverage suppliers.

National and regional advertising, including advertising under the beverage concessionaire and courtesy PSA agreements, are sold on a CPM basis. The Company predominantly recognizes national and regional advertising over time as impressions (or theater attendees) are delivered. National advertising is also sold to content partners. The content partners provide the Company with original entertainment content segments, typically 90 seconds in length, that are entertaining, informative or educational in nature in The Noovie®Show and they make commitments to buy a portion of the Company’s advertising inventory at a specified CPM. The Company recognizes revenue for the content segments over time as the content segments air. Local advertising and advertising on the Spotlight Cinema Network is sold on a per-screen, per-week basis and to a lesser extent on a CPM basis. The Company recognizes local on-screen advertising revenue over the period in which the advertising airs as dictated by the underlying sales contracts. When sold separately, LEN advertising and lobby promotions are sold based on length and breadth of the promotion. The Company recognizes revenue derived from the lobby network and promotions over time when the advertising is displayed in theater lobbies. The Company sells data and digital advertising on a CPM basis as well. The Company recognizes revenue from branded entertainment websites and mobile applications over time as the data or digital impressions are served. This revenue for these products is presented within National and Local and regional advertising below.

Customer contracts may also include multiple advertising services to reach the moviegoer at multiple points during a theater experience. The Company considers each of these advertising services to represent distinct performance obligations of the contract and allocates a portion of the transaction price to each service based upon the standalone selling price of the service. When standalone selling prices are not readily observable, the Company allocates the transaction price based upon all information that is reasonably available and maximizes the use of observable inputs. Methods utilized include the adjusted market and expected cost-plus margin approaches.

The Company enters into barter transactions that exchange advertising program time for products and services used principally for selling and marketing activities, as well as for equity interests. The Company records barter transactions at the estimated fair value of the products, services and equity interests received if that can be reasonably estimated. If the fair value of the products and services received cannot be reasonably estimated, the Company utilizes the stand-alone selling price of the advertising services in the underlying contract. Revenue for advertising barter transactions is recognized when advertising is provided, and products and services received are charged to expense when used or recognized as investments as received, as applicable. Revenue from barter transactions for the years ended January 1, 2026, December 26, 2024 and December 28, 2023 was $3.4 million, $0.5 million and $0.1 million, respectively. Expense recorded from barter transactions for the years ended January 1, 2026, December 26, 2024 and December 28, 2023 was $0.5 million, $0.3 million and $0.1 million, respectively. This expense is included within “Selling and marketing costs” on the audited Consolidated Statements of Operations.

The Company recognizes revenue as the performance obligation for the advertising services is satisfied. Invoices are generated following the processing of each revenue contract and payment is due from the customer within 30 daysof the invoice date. Customers select to pay the invoice in full at the start of a contract or through mutually agreed upon installments overthe course of the contract. The Company records deferred revenue when cash payments are received, or invoices are issued, in advance of revenue being earned. Deferred revenue is classified as a current liability as it is expected to be earned within the next twelve months.

Disaggregation of Revenue

The Company disaggregates revenue into the categories of national; local and regional; beverage concessionaire and management fee reimbursement based upon a combination of multiple factors including the type of customer, the products included within a contract and the geographic scope and management fee reimbursement revenue related to NCM LLC. This method of disaggregation is in alignment with how revenue is reviewed by management and discussed with and historically disclosed to investors.

The following table summarizes revenue from contracts with customers for the years ended January 1, 2026, December 26, 2024 and December 28, 2023 (in millions):

Deferred Revenue and Unbilled Accounts Receivable

The Deferred Revenue balance increases upon issuance of invoices to customers and decreases upon delivery of services and the resulting recognition of revenue. Revenue recognized in the year ended January 1, 2026 that was included within the Deferred Revenue balance as of December 26, 2024 was $22.7 million. Revenue recognized in the year ended December 26, 2024 that was included within the Deferred Revenue balance as of December 28, 2023 was $9.8 million. Revenue recognized in the year ended December 28, 2023 that was included within the Deferred Revenue balance as of December 29, 2022 was $8.6 million. Unbilled accounts receivable is classified as a current asset as it is expected to be billed within the next twelve months. As of January 1, 2026 and December 26, 2024, the Company had $4.2 million and $2.5 million, respectively, in unbilled accounts receivable, included within the accounts receivable balance.

Practical Expedients and Exemptions

The Company hastwo significant customer contracts with a term in excess of one year that are noncancellable as of January 1, 2026. The remaining performance obligation under these contracts is $3.9 million as of January 1, 2026 and represents commitments for future advertising services for which work has not been performed and revenues are to be recorded in future periods. The Company expects to recognize all of its remaining performance obligation under this contract within the nexttwo years. Agree ments with a duration less than one year are not disclosed as the Company elected to use the practical expedient in ASC 606-10-50-14 for those contracts. In addition, the Company’s contracts longer than one year that are cancellable are not included within this disclosure.

The Company expenses sales commissions when incurred as the amortization period would have been one year or less. These costs are recorded within “Selling and marketing costs” in the audited Consolidated Statements of Operations. In addition, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company also does not adjust the transaction price for the effects of a significant financing component, as the Company expects, at contract inception, that the period between when the Company performs services and when the customer pays for the Company's service will be one year or less.

Allowance for Credit Losses

The allowance for credit losses balance is determined separately for each pool of the Company's receivables with similar risk characteristics. The Company has determined that two pools, national customers and local/regional customers, is appropriate. The changes within the allowance for credit losses balances for the years ended January 1, 2026 and December 26, 2024 were as follows (in millions):

(LOSS) INCOME PER SHARE

Basic (loss) income per share is computed on the basis of the weighted average number of common shares outstanding. Diluted (loss) income per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of potentially dilutive common stock options, restricted stock and exchangeable NCM LLC common units using the treasury stock method. The components of basic and diluted (loss) income per NCM, Inc. share are as follows:

The effect of the 853 and 5,715 weighted average exchangeable NCM LLC common membership units held by the ESA Parties for the years ended January 1, 2026 and December 26, 2024, respectively, were excluded from the calculation of diluted weighted average shares and earnings per NCM, Inc. share as they were antidilutive. The weighted average exchangeable NCM LLC common membership units held by the ESA Parties for the year ended December 28, 2023 was 685,404 and are included in diluted weighted average shares. In addition, there were 5,440,529,5,671,341 and 979,176, stock options and non-vested (restricted) shares for the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively, excluded from the calculation as they were antidilutive. The Company’s non-vested (restricted) shares do not meet the definition of a participating security as the dividends will not be paid if the shares do not vest.

On August 3, 2023, the Company effected a one-for-ten (1:10) reverse stock split of its common stock, par value $0.01 per share. The reverse stock split, which was authorized by its Board of Directors, was approved by the Company’s stockholders on August 2, 2023. The reverse stock split reduced the number of outstanding shares of the Company’s common stock from 174,112,385 shares as of August 3, 2023, to 17,411,323 shares outstanding post-split.

PROPERTY AND EQUIPMENT

The following is a summary of property and equipment, at cost less accumulated depreciation (in millions):

BUSINESS COMBINATIONS

Acquisition of Spotlight Cinema Networks

On November 14, 2025, NCM LLC entered into the Membership Interest Purchase Agreement (“MIPA”) with Spotlight Cinema Networks (“Spotlight”), a niche cinema advertising company, whereby the Company acquired 100.0% of Spotlight in exchange for cash consideration as outlined below. The acquisition of Spotlight adds high-scale luxury screens and exhibitors that offer unique and engaging customer experiences to the Company’s platform, unlocking new advertising and preshow entertainment inventory.

The following table summarizes the consideration transferred to acquire Spotlight(in millions):

The contingent consideration was placed within an escrow account as of the acquisition date and will be released over the next three years as the required contract renewals are obtained for the specified exhibitor agreements with upcoming expiration dates or as the exhibitors remain on the Spotlight Cinema Network for specified time periods. The fair value of the consideration and contingently returnable consideration are calculated utilizing the present value of payments by exhibitor probability weighted based on the respective estimated likelihood of renewal. The undiscounted maximum amount of contingent consideration is $1.6 million. Each period, the Company will revalue the contingently returnable consideration to its fair value and record the related changes in the Consolidated Statement of Income. Changes in the contingently returnable consideration result from changes in assumptions regarding probabilities of successful achievement of exhibitor renewals, the estimated timing in which renewals are achieved and the discount rate usedto estimate the fair value of the asset.

In connection with the acquisition of Spotlight Cinema Networks, the Company entered into transition agreements with various employees, transitional independent contractor agreements, and a transition services agreement with one of the sellers. The expense related to these agreements is recognized as the underlying services are performed. For the year ended January 1, 2026, $0.2 million was included within ‘Network operating costs’ and $0.1 million was included within ‘Selling and marketing costs’ as presented on the audited Consolidated Statement of Operations based upon the nature of the work being performed.

The following table summarizes the fair value of Spotlight and provisional fair values of the assets acquired and liabilities assumed as of the acquisi tion date (in millions). The provisional allocation of the purchase price was based upon a preliminary valuation, and the Company's estimates and assumptions are subject to change as valuations are finalized within the measurement period, which cannot extend beyond one year from the acquisition date.

(1)

(2) The Goodwill balance recognized of $0.5 million is primarily related to the value of the assembled workforce which does not qualify for separate recognition as an intangible asset.

The acquired business contributed revenues of $2.2 million and earnings of $0.5 million to the Company for the period subject to consolidation (November 15, 2025 to January 1, 2026).

Pro Forma Financial Information (Unaudited) - Spotlight Cinema Network

The following represents the pro forma Consolidated Statement of Operations as if the Spotlight acquisition had been included in the consolidated results of the Company for the entire period for the years ended January 1, 2026, December 26, 2024 and December 28, 2023.

Reconsolidation of NCM LLC

Upon filing the Chapter 11 Case and in accordance with applicable GAAP, the Company concluded that NCM, Inc. no longer controlled NCM LLC for accounting purposes as of April 11, 2023 (the “Petition Date”), the date on which NCM LLC filed its Chapter 11 petition, as NCM LLC was under the control of the Bankruptcy Court, and therefore, NCM LLC was deconsolidated from the Company’s consolidated financial statements prospectively, resulting in a $557.7 million gain recorded in “Gain on deconsolidation of affiliate” in the Consolidated Statement of Operations. The recorded gain was measured as the excess of the estimated fair value of the investment in NCM LLC retained over the Net Liabilities of NCM LLC as of April 11, 2023. The investment of NCM LLC was measured at cost minus any impairment in accordance with the measurement alternative outlined in ASC 321—Investments—Equity Securities. While NCM LLC remained in bankruptcy, NCM, Inc. accounted for the retained equity interest in NCM LLC at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly market transactions. Upon the deconsolidation of NCM LLC, the original cost of the investment was valued based upon NCM, Inc.'s ownership of the secured debt of NCM LLC and an estimation of the enterprise value of NCM LLC developed utilizing discounted cash flows and comparable company analysis as of the Petition Date. Significant assumptions utilized within these analyses included the weighted average cost of capital and NCM LLC’s forecasted cash flows.

On August 7, 2023, NCM LLC emerged from bankruptcy and NCM, Inc. contributed $15.0 million in cash to NCM LLC in exchange for 2.8% of additional ownership of NCM LLC in accordance with the NCMI Capital Contribution and $0.5 million to assist with payments to unsecured creditors in accordance with the settlement with the unsecured creditors. NCM, Inc. also issued 83,421,135 shares to the secured creditors in accordance with the NCMI 9019 Settlement and terms of the Plan with a fair value of $245.3 million based on the closing stock price of $2.94. Upon NCM LLC’s emergence from bankruptcy, NCM, Inc. retained 100.0% of NCM LLC, regained control of and reconsolidated NCM LLC.

The Company accounted for the NCM LLC reconsolidation as a business combination under ASC 805—Business Combinations and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of reconsolidation, the Effective Date. The determination of fair values required management to make significant estimates and assumptions.

The following table summarizes the fair value of NCM LLC and fair values of the assets acquired and liabilities assumed as of the reconsolidation date (in millions):

(1)

Includes a valuation adjustment recorded during the three months ended December 28, 2023 that decreased accounts receivable, net by $0.2 million. There have been no adjustments to the purchase price and fair value estimates presented in the years ended January 1, 2026 and December 26, 2024, and these amounts are final.

The identifiable intangible assets of $415.0 million are subject to amortization. The following table summarizes the major classes of intangible assets acquired and their respective weighted-average estimated useful lives (in millions).

The estimated fair values of the ESAs, network affiliate agreements and trademarks were estimated using the income approach. The multi-period excess earnings method starts with a forecast of all of the expected future net cash flows associated with the asset. The forecasts are then adjusted to present value by applying an appropriate discount rate that reflects the risks associated with the company specific cash flow streams. Significant assumptions utilized within the income approach include the weighted average cost of capital and forecasted cash flows. The estimated fair values of the customer relationships were estimated using the cost approach. The cost approach included estimating the investment required to replace the contracts with customers, with significant assumptions including the replacement cost. The Company elected the practical expedients allowed in ASC 805-20-30-29a in estimating the fair value of the contract liabilities assumed.

Upon NCM LLC’s emergence from the Chapter 11 Case, NCM, Inc. remeasured the value of the investment in NCM LLC to the estimated fair value calculated as NCM, Inc.’s percentage ownership of NCM LLC, due to NCM, Inc.’s ownership of the secured debt of NCM LLC and the NCMI Capital Contribution, multiplied by the fair value of NCM LLC as of the Effective Date of $483.4 million. The value of the cost investment of NCM LLC immediately prior to the Effective Date was $11.9 million based upon NCM, Inc.’s ownership of the secured debt of NCM LLC and an estimation of the enterprise value of NCM LLC developed utilizing discounted cash flows and comparable company analysis as of the Petition Date. The increase in the fair value resulted in a gain on remeasurement of the investment in NCM LLC of $35.5 million during the year ended December 28, 2023.

Upon reconsolidation, NCM, Inc. recorded the fair values of the assets acquired and liabilities assumed as of the reconsolidation date and the investment in NCM LLC was further adjusted to the full purchase price value of $483.4 million. The difference between the purchase price of NCM LLC and the fair value of NCM, Inc.’s investment in NCM LLC as calculated above, the $15.5 million of cash contributed by NCM, Inc. (consisting of $0.5 million related to the General Unsecured Claim Pool and $15.0 million under the NCMI Capital Contribution) and the shares issued to NCM LLC’s secured lenders of $245.3 million resulted in a gain of $167.8 million upon the reconsolidation of NCM LLC during the year ended December 28, 2023. The Company recognized a gain due to the variance between the fair value of NCM LLC’s assets andliabilities and NCM, Inc.’s depressed stock price on the Effective Date and the NCM, Inc. shares retained by the existing shareholders as part of the NCMI 9019 Settlement. Prior to the Effective Date, NCM, Inc.’s stock price was negatively impacted beginning with the COVID-19 pandemic followed by Cineworld’s bankruptcy proceeding and NCM LLC’s Chapter 11 Case, as well as by other socioeconomic factors.

The Company’s Consolidated Statements of Operations include total net revenues and net loss attributable to NCM LLC of $155.1 million and $42.0 million, respectively, for the total of the consolidated periods of December 30, 2022 through April 11, 2023 and August 7, 2023 through December 28, 2023.

Pro Forma Financial Information (Unaudited) - NCM LLC Reconsolidation

The following table presents unaudited pro forma financial information as if the NCM LLC reconsolidation had occurred on December 31, 2021. The unaudited pro forma results reflect adjustments for depreciation of acquired property and equipment, amortization of acquired intangible assets and amortization of acquired debt issuance costs. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of future operations or results had the NCM LLC reconsolidation been completed as of December 31, 2021 (in millions).

INTANGIBLE ASSETS

The Company’s intangible assets consist of contractual rights to provide its services within the theaters under the ESAs and network affiliates agreements, customer relationships developed and maintained by the Company’s sales force, trademarks held and used by the Company, noncompete agreements acquired and datasets acquired and used by the Company. The intangible assets are stated at their estimated fair values upon the reconsolidation of NCM LLC on August 7, 2023 as further described within Note 5—Business Combinations, net of accumulated amortization. Subsequently acquired intangible assets are recorded at cost, or in the cash of acquisitions, their estimated fair value. The Company records amortization using the straight-line method over the contractual life of the intangibles, corresponding to the term of the ESAs, the average renewable term of the contract with the network affiliates, industry standard lives for customer relationships and trademarks, the contract length for noncompete agreements and for the datasets, to the shorter of the use rights outlined in the contract under which they were acquired and the estimated rate of obsolescence of the datasets' usefulness. In accordance with ASC 360—Property, Plant and Equipment, the Company continuously monitors the performance of the underlying assets for potential triggering events suggesting an impairment review should be performed.

Upon entering into the 2025 AMC Agreement, the Company determined that there was a triggering event for the Company’s intangible asset group, including the amount related to AMC, under ASC 360—Impairment and Disposal of Long-Lived Assets during the quarter ended June 26, 2025. Management estimated future undiscounted cash flows, including the impacts of the new fee structure under the 2025 AMC Agreement, which has been adjusted to be based on the attendance, the operating screens and the revenue generated by the Company through the advertising displayed in AMC's theaters beginning on July 1, 2025, and the increase in the useful life due to the five year extension. The estimated future cash flows calculated within the analysis were well in excess of the net book value of the Company’s intangible assets and no impairment was recorded in the quarter ended June 26, 2025. Such analysis required management to make estimates and assumptions based on historical data and consideration of future market conditions. Actual results may differ from the estimates and assumptions used, or conditions may change, which could result in impairment charges in the future.

Common Unit Adjustments—In accordance with NCM LLC’s Common Unit Adjustment Agreement, on an annual basis NCM LLC determines the amount of common membership units to be issued to or returned by AMC (through April 17, 2025) and Cinemark based on theater additions, new builds or dispositions during the previous year. In addition, NCM LLC’s Common Unit Adjustment Agreement required that a Common Unit Adjustment occur for either AMC or Cinemark if its acquisition or disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date. In the event that the adjustment was negative and either AMC or Cinemark did not have sufficient common membership units to return, the adjustment was satisfied in cash in an amount calculated pursuant to NCM LLC’s Common Unit Adjustment Agreement. Upon the issuance of common membership units, the Company recorded an addition to the intangible asset related to AMC and Cinemark’s respective ESAs equal to the fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued. NCM LLC common membership units are fully convertible into NCM, Inc.’s common stock. Subsequent to April 17, 2025 and in accordance with the AMC Termination Agreement, AMC is no longer a party to the Common Unit Adjustment Agreement and will no longer receive NCM LLC Common Units.

During the first quarter of 2025, in accordance with the Common Unit Adjustment Agreement, NCM LLC calculated a reduction of common membership units for AMC and Cinemark to be settled on April 2, 2025. Cinemark, who heldno membership units, remitted cash to settle the negative common membership unit adjustment. In connection with the Common Unit Adjustment Agreement and the AMC Termination Agreement, AMC returned all of its units and was forgiven any remaining negative common unit adjustment. These transactions resulted in a reduction of the intangible asset of $0.1 million during the year ended January 1, 2026. As of January 1, 2026, AMC and Cinemark held no ownership interest in NCM LLC.

During the second quarter of 2024, in accordance with the Common Unit Adjustment Agreement, NCM LLC issued 135,473 common membership units to AMC and Cinemark, with a net impact of $0.7 million to the intangible asset. On April 16, 2024, the Company elected to satisfy a redemption request from Cinemark for all of their outstanding common membership units through a cash settlement as provided in NCM LLC’s Operating Agreement. This redemption reduced Cinemark’s ownership interest in NCM LLC to 0.0% as of April 16, 2024 while AMC’s ownership interest was de minimis.

Pursuant to and in connection with the Chapter 11 Case during the year ended December 28, 2023, NCM LLC did not issue common membership units to Cinemark for the rights to exclusive access to the theater screens and attendees added, net of dispositions, to NCM LLC’s network for the 2022 fiscal year and the 16,581,829 units issued to AMC were issued and cancelled on the Effective Date.

Integration Payments and Other Encumbered Theater Payments—If an existing on-screen advertising agreement with an alternative provider is in place with respect to any Encumbered Theaters, the applicable ESA party, AMC (through April 17, 2025) or Cinemark, may elect to receive common membership units related to those Encumbered Theaters in connection with the Common Unit Adjustment. If the ESA party makes this election, then they are required to make payments on a quarterly basis in arrears in accordance with certain run-out provisions pursuant to the ESAs (“integration payments”). Integration payments were calculated based upon the advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with pre-existing advertising agreements. The ESAs with AMC and Cinemark additionally entitle NCM LLC to payments related to their on-screen advertising commitments under their beverage concessionaire agreements for Encumbered Theaters. The encumbered beverage payments are also accounted for as a reduction to the intangible asset related to the ESAs. Given that the Carmike Cinemas, Inc. (“Carmike”) theaters acquired by AMC are subject to an existing on-screen advertising agreement with an alternative provider, AMC made integration payments and encumbered beverage payments to NCM LLC prior to the 2025 AMC Agreement. Upon the effectiveness of the 2025 AMC Agreement, and assuming the opt out provision is not exercised, AMC is no longer required to make integration payments. In addition, the $10.6 million in accrued integration payments owed by AMC was forgiven in conjunction with the negotiations. The Company recorded the forgiveness of the receivable as an increase to the ESA Party intangible asset, during the quarter ended June 26, 2025, in accordance with the lease modification guidance outlined in ASC 842—Leases.

The following is a summary of the Company’s intangible asset’s activity (in millions) during January 1, 2026 and December 26, 2024:

(1)

The additions to the Company's intangible assets during 2025 are due to (1) $5.4 million in intangible assets recognized in conjunction with the purchase of Spotlight in the fourth quarter of 2025 as discussed further within Note 5—Business Combinations, (2) $0.4 million related to the acquisition of datasets and (3) $0.4 million related to costs incurred to extend the useful life of the Company's intangible asset related to the ESA Parties by 5 years through the 2025 AMC Agreement.

(2)

During the first quarter of 2025, in accordance with the Common Unit Adjustment Agreement, NCM LLC calculated a reduction of common membership units for AMC and Cinemark to be settled on April 2, 2025. Cinemark, who held no membership units, remitted cash to settle the negative common membership unit adjustment. In connection with the Common Unit Adjustment Agreement and the AMC Termination Agreement, AMC returned all of its units and was forgiven any remaining negative common unit adjustment. These transactions resulted in a reduction of the intangible asset of $0.1 million during the year ended January 1, 2026. As of January 1, 2026, AMC and Cinemark heldno ownership interest in NCM LLC.

(3)

During the second quarter of 2025, the Company and AMC entered into the 2025 AMC Agreement and the AMC Termination Agreement. As a result of the agreements, NCM LLC released $24.8 million of the 'Payable under the TRA' and reversed the receivables from AMC totaling $10.6 million within 'Amounts due from ESA Parties' on the Company's audited Consolidated Balance Sheet. The net impact of these reversals was recorded as a $14.2 million reduction to the 'Intangible Assets, net of accumulated amortization' as AMC's forfeiture of this net payable was considered akin to a lease incentive. Refer to Note 9—Related Party Transactions for additional detail surrounding the agreements.

(4)

Carmike had pre-existing advertising agreements for some of the theaters it owned prior to their acquisitions by AMC. As a result, AMC made integration and other encumbered theater payments over the remaining term of those agreements until the AMC Termination Agreement became effective on July 1, 2025. For the year ended January 1, 2026 and December 26, 2024, NCM LLC recorded a reduction to net intangible assets of $0.6 million and $6.4 million, respectively, related to integration and other encumbered theater payments due from AMC. During the year ended January 1, 2026 and December 26, 2024, AMC and Cinemark paid a total of $0.8 million and $1.2 million, respectively, related to integration and other encumbered theater payments.

(5)

During the quarter ended June 27, 2024, in accordance with the Common Unit Adjustment Agreement, NCM LLC issued 135,473 common membership units to AMC and Cinemark, with a net impact of $0.7 million to the intangible asset.

As of January 1, 2026 and December 26, 2024, the Company’s intangible assets related to the ESA Parties, net of accumulated amortization, was$186.8 million and $212.3 million, respectively, with weighted average remaining lives of 15.1 years and 11.6 years, respectively.

As of January 1, 2026 and December 26, 2024, the Company’s intangible assets related to the network affiliates, net of accumulated amortization, was $63.8 million and $68.5 million, respectively, with weighted average remaining lives of 13.6 years and 14.6 years, respectively.

As of January 1, 2026 and December 26, 2024, the Company’s intangible assets related to the customer relationships, net of accumulated amortization, was $45.1 million and $57.6 million, respectively, with weighted average remaining lives of 3.6 years and 4.6 years, respectively.

As of January 1, 2026 and December 26, 2024, the Company’s intangible assets related to trademark, net of accumulated amortization, was $10.5 million and $12.4 million, respectively, with weighted average remaining lives of 5.6 years and 6.6 years, respectively.

As of January 1, 2026, the Company’s intangible assets related to the datasets, net of accumulated amortization, was $0.3 million, respectively, with weighted average remaining lives of 1.8 years. This asset was obtained during the quarter ended June 26, 2025.

As of January 1, 2026, the Company’s intangible assets related to the Spotlight exhibitors, net of accumulated amortization, was $4.7 million, respectively, with weighted average remaining lives of 11.9 years. This asset was obtained during the quarter ended January 1, 2026.

As of January 1, 2026, the Company’s intangible assets related to noncompetition agreements, net of accumulated amortization, was $0.4 million, respectively, with weighted average remaining lives of 4.9 years. This asset was obtained during the quarter ended January 1, 2026.

As of January 1, 2026, the Company’s intangible assets related to the trade name - Spotlight, net of accumulated amortization, was $0.3 million, respectively, with weighted average remaining lives of 7.9 years. This asset was obtained during the quarter ended January 1, 2026.

The estimated aggregate amortization expense for each of the five succeeding years is as follows (in millions):

INCOME TAXES

The Company is subject to taxation in the U.S. and various states. The Company’s tax returns for the calendar years 2022 through 2024 remain open to examination by the IRS in their entirety. With respect to state taxing jurisdictions, the Company’s tax returns for calendar years ended 2021 through 2024, in general are eligible for examination by various state revenue services.

Recently enacted tax legislation—On July 4, 2025, the U.S. enacted H.R. 1 "A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14", commonly referred to as the One Big Beautiful Bill Act (OBBBA). The Company continues to maintain a full valuation allowance on its net deferred tax assets and this new legislation did not have a material impact on the Company.

Tax Receivable Agreement—On the IPO date, NCM, Inc. and the ESA Parties entered into a TRA. Under the terms of this agreement, NCM, Inc. will make cash payments to the ESA Parties in amounts equal to 90% of NCM, Inc.’s actual tax benefit realized from the tax amortization of the intangible assets described below. For purposes of the TRA, cash savings in income and franchise tax will be computed by comparing NCM, Inc.’s actual income and franchise tax liability to the amount of such taxes that NCM, Inc. would have been required to pay had there been no increase in NCM, Inc.’s proportionate share of tax basis in NCM LLC’s tangible and intangible assets and had the TRA not been entered into. The TRA applies to NCM, Inc.’s taxable years up to and including the 30th anniversary date of the offering. For the 2023 tax year, the Company paid the ESA Parties $0.0 million in the year ended December 26, 2024. For the 2024 tax year, the Company paid$1.3 million in 2025 andexpects to pay an additional $0.8 million in 2026 to Cinemark. For the 2025 tax year, the Company expects to pay $2.1 million in 2026 to Cinemark.

NCM, Inc. recorded a long-term payable to the ESA Parties related to the TRA. The Company recorded a decrease of $30.2 million and an increase of $4.2 million to the “Payable to ESA Parties under the tax receivable agreement” during the years ended January 1, 2026 and December 26, 2024, respectively. The decrease in the payable under the TRA during the year ended January 1, 2026 was driven primarily by: 1) a decrease of $3.7 million due to differences between the Company's actual and projected performance and future projected performance as recorded within '(Gain) loss on re-measurement of the payable under the tax receivable agreement' on the audited Consolidated Statement of Operations and 2) in accordance with the AMC Termination Agreement, AMC waived all rights and interests as to the TRA and the Company reduced the 'Payable under the TRA' on the audited Consolidated Balance Sheets for the amounts recorded associated with AMC of $24.8 million. The cancellation of this payable was considered akin to a lease incentive related to the modification of the short-term operating lease of AMC's screens under ASC 842—Leases and it was recorded against the intangible asset for the ESA Parties upon the effectiveness of the AMC Termination Agreement within the year ended January 1, 2026. The adjustment will reduce amortization expense of the intangible over the remainder of its useful life, which is considered akin to lease expense. The increase in the payable under the TRA during the year ended December 26, 2024 was driven primarily by a change in calculation methodology to also include forecasted book income for the next two years in addition to the current year, due to management’s ability to more accurately forecast following the conclusion of the COVID-19 pandemic. The increase in the year ended December 28, 2023 was primarily due to the increase in NCM, Inc.’s ownership percentage of NCM LLC. The ownership related changes to the “Payable to ESA Parties under the tax receivable agreement” were recorded within “Additional paid in capital” on the Consolidated Balance Sheet and the non-ownership related changes were recorded within “Non-operating income” within the Consolidated Statements of Operations. For the year ended December 28, 2023, following the Regal Termination Agreement whereby Regal waived all rights and interests as to the TRA, the Company reduced the “Payable under the TRA” on the Consolidated Balance Sheets for the amounts expected to be owed to Regal. This decrease was ultimately offset by the increase in the ‘Payable under the TRA’ on the Consolidated Balance Sheets due to the additional basis created upon the revaluation and reconsolidation of NCM LLC on the Effective Date.

Provision for Income Taxes—The Company's total income taxes are as follows (in millions).

(1)

The majority of the current income tax expense relates to taxes in Colorado, California and New Jersey for the year ended December 26, 2024.

A reconciliation of the provision for income taxes as reported and the amount computed by multiplying income before taxes, less noncontrolling interest, by the U.S. federal statutory rateof 21.0% as of January 1, 2026, December 26, 2024 and December 28, 2023 was (in millions):

(1)

This relates to the change in the provision for income taxes following the 2025 AMC Agreement, driven by the treatment of the write-off of AMC related tax assets as in substance cash payments.

(2)

Refer to the discussion of changes to the valuation allowance during the year ended January 1, 2026 within the Deferred Tax Assets table below.

(1)

Refer to the discussion of changes to the valuation allowance during the year ended December 26, 2024 within the Deferred Tax Assets table below.

(1)

Refer to the discussion of changes to the valuation allowance during the year ended December 28, 2023 within the Deferred Tax Assets table below.

Deferred Tax Assets—Significant components of the Company’s deferred tax assets consisted of the following (in millions):

(1)

The Company recognized a deferred tax asset in the amount of $51.4 million and $136.7 million as of January 1, 2026 and December 26, 2024, respectively, associated with the basis difference in our investment in NCM LLC. The difference is driven primarily by the large ordinary and capital loss resulting from write-off of certain of NCM LLC tax assets associated with the 2025 AMC Agreement. These losses resulted in the increases within the net-operating losses deferred tax asset and the capital loss carryover deferred tax asset as a result.

(2)

The Company evaluated its deferred tax assets as of January 1, 2026 and December 26, 2024 and considered both positive and negative evidence in determining whether it is more likely than not that all or some portion of its deferred tax assets will be realized. The Company generated a three-year cumulative pre-tax book loss during 2021 driven by the impact of the COVID-19 Pandemic on the Company’s operations in 2021 and 2020, the effect of which continued into 2022 and 2023. Given the associated weight assigned to this item as negative evidence within the Company’s analysis, the Company determined it is more-likely-than-not that the Company will not be able to realize certain of the Company’s deferred tax assets. Once the Company returns to a more normal operating level and emerges from a three-year cumulative pre-tax book loss position, part or all the valuation allowance is expected to reverse.

Income taxes paid—A reconciliation of the income taxes paid for the year ended January 1, 2026 and December 26, 2024 was (in dollars):

(1)

These payments relate to income taxes at NCM, LLC.

Carryforwards—As of January 1, 2026, the Company had gross federal net operating loss carryforwards of approximately $235.2 million of which $235.0 million will be carried forward indefinitely. As of January 1, 2026, the Company had gross state net operating loss carryforwards of approximately$216.2 million, of which $157.5 million will expire between 2025 and 2047 and$58.7 million will be carried forward indefinitely. As of January 1, 2026 and December 26, 2024, the Company had gross federal research and experimentation tax credit carryforwards of approximately $1.5 million, which expire at various dates between 2033 and 2039.

EQUITY

As of January 1, 2026, the Company has authorized capital stock of 260,000,000 shares of common stock, par value of $0.01 per share, and 10,000,000 shares of preferred stock, par value of $0.01 per share. There were 93,353,604 shares of common stock issued and outstanding and 50 shares of preferred stock issued and outstanding as of January 1, 2026.

The holders of NCM, Inc. common stock are entitled toone vote per share on all matters submitted for action by the NCM, Inc. stockholders. Holders of common stock are entitled to share equally, share for share, in declared dividends.

The authorized but unissued shares of common stock and preferred stock are available for future issuance without stockholder approval. These additional shares may be used for a variety of corporate purposes, including share-based compensation, future public offerings to raise additional capital, corporate acquisitions and exchange on a one-for-one basis under the ESA Parties’ right to convert their NCM LLC membership units into Company common stock.

Prior to the deconsolidation of NCM LLC on April 11, 2023, in conformity with accounting guidance of the SEC concerning monetary consideration paid to promoters, such as the ESA Parties, in exchange for property conveyed by the promoters, the excess over predecessor cost was treated as a special distribution. Because the ESA Parties had no cost basis in the ESAs, nearly all payments to the ESA Parties with the proceeds of the IPO and related debt, have been accounted for as distributions. The distributions by NCM LLC to the ESA Parties made at the date of the IPO resulted in a consolidated stockholders’ deficit. As a noncontrolling interest cannot be shown as an asset, the ESA Parties’ interest in NCM LLC’s members equity was included in distributions in excess of paid in capital in the Consolidated Balance Sheets.

On April 11, 2023, the historical Equity balances of NCM LLC were deconsolidated from the Consolidated Financial Statements. On August 7, 2023, the Company accounted for the NCM LLC reconsolidation as a business combination under ASC 805—Business Combinations and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of reconsolidation, the Effective Date, with no allocation to any equity balances. The reconsolidation reduced NCM LLC’s equity balances to $0 and removed the impact of the IPO discussed above. For further information regarding the deconsolidation and reconsolidation of NCM LLC, refer to Note 5 - Business Combinations.

RELATED PARTY TRANSACTIONS

ESA Party and Managing Member Transactions—In connection with NCM, Inc.’s IPO, the Company entered into several agreements to define and regulate the relationships among NCM LLC, NCM, Inc. and AMC, Cinemark and Regal which are outlined below.

AMC has owned less than 5% of NCM LLC, on an as converted basis, since July 2018 and is no longer a related party. On April 17, 2025, the Company and AMC, entered into the Second Amended and Restated Exhibitor Services Agreement (the “2025 AMC Agreement”) and a separate termination agreement (the “AMC Termination Agreement”) by and among NCM LLC, NCM, Inc. and AMC. The 2025 AMC Agreement extended the term of the ESA byfive years and more closely aligns the program distributed by NCM LLC in AMC theaters to the predominant pre-feature program show structure distributed in the rest of NCM LLC's advertising network and adjusted the consideration paid by NCM LLC. The AMC Termination Agreement waived AMC’s rights under certain agreements entered into at the time of the IPO. The agreements were accounted for in accordance with the lease modification guidance within ASC 842—Leases, as the amended ESA contains a short-term operating lease of AMC’s screens. The agreements were considered combined as they were entered into contemporaneously by the same parties. As a result of the agreements, in the year ended January 1, 2026, NCM LLC released $24.8 million of the 'Payable under the TRA' and reversed the receivable of $10.6 million from AMC, related to unpaid integration payments, and released the receivable under the Common Unit Adjustment Agreement within 'Amounts due from ESA Parties' on the Company's audited Consolidated Balance Sheet. NCM will no longer have an obligation to make TRA payments to AMC, provide common units as a part of the Common Unit Adjustment Agreement or distribute NCM LLC's available cash to AMC, and the Company received the benefits of the revised ESA, including enhancements related to the pre-feature show structure and NCM's exclusive right to advertise in AMC's theaters. The net impact of these reversals was recorded to the 'Intangible Assets, net of accumulated amortization' as AMC's forfeiture of this net payable was considered akin to a lease incentive. The reduction in the intangible asset for the ESAs will result in reduced amortization expense, as it is considered akin to lease expense, for the remainder of the contract term. Refer to Note 6—Intangible Assets, Note 7—Income Taxes, and Note 13—Commitments and Contingencies for additional detail surrounding these agreements. When AMC remained a party to the ESA, Common Unit Adjustment Agreement and certain other original agreements and was a member under the terms of the NCM LLC Operating Agreement, subject to fulfilling the requirements of Section 3.1 of the NCM LLC Operating Agreement. AMC participated in the annual Common Unit Adjustment and received available cash distributions or allocation of earnings and losses in NCM LLC (as long as its ownership in NCM LLC was greater than zero) and theater access fees. Further, AMC will continue to pay beverage revenue, among other things, to NCM LLC. During the first quarter of 2025, in accordance with the Common Unit Adjustment Agreement, NCM LLC calculated a reduction of common membership units for AMC to be settled on April 2, 2025. In connection with the Common Unit Adjustment Agreement and the AMC Termination Agreement, AMC returned all of its units and was forgiven any remaining negative common unit adjustment. As of January 1, 2026, AMC’s ownership was 0.0% of NCM LLC and 0.0% NCM, Inc.

Cinemark has owned less than 5% of NCM LLC, on an as converted basis, since NCM LLC emerged from bankruptcy on August 7, 2023 and is no longer a related party. Cinemark remains a party to the ESA, Common Unit Adjustment Agreement and certain other original agreements and is a member under the terms of the NCM LLC Operating Agreement, subject to fulfilling the requirements of Section 3.1 of the NCM LLC Operating Agreement. Cinemark will continue to participate in the annual Common Unit Adjustment and receive available cash distributions or allocation of earnings and losses in NCM LLC (as long as its ownership in NCM LLC is greater than zero) and theater access fees. Further, Cinemark will continue to pay beverage revenue, among other things, to NCM LLC. Cinemark’s ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by Cinemark. On April 1, 2024, in accordance with the Common Unit Adjustment Agreement, NCM LLC issued 132,096 common membership units to Cinemark. On April 16, 2024, the Company elected to satisfy a redemption request from Cinemark for all of their outstanding common membership units through a cash settlement as provided in NCM LLC’s Operating Agreement. This redemption reduced Cinemark’s ownership interest in NCM LLC to 0.0% asof April 16, 2024. During the first quarter of 2025, in accordance with the Common Unit Adjustment Agreement, NCM LLC calculated a reduction of common membership units for Cinemark to be settled on April 2, 2025. Cinemark, who held no membership units, remitted cash to settle the negative common membership unit adjustment. As of January 1, 2026, Cinemark’s ownership was 4.7% of NCM, Inc. and 0.0% of NCM LLC.

On June 3, 2023, NCM LLC entered into the Regal Advertising Agreement and Regal Termination Agreement which became effective on July 14, 2023. Pursuant to the Regal Termination Agreement, Regal rejected and terminated its ESA with NCM LLC. Additionally Regal and Regal’s affiliates’ waived all rights and interests as to the TRA, the Common Unit Adjustment Agreement, the Software License Agreement, the Director Designation Agreement, the Registration Rights Agreement and all the other joint venture agreements described in the NCM LLC Operating Agreement and the Company and NCM LLC, and Regal and Regal’s affiliates waived and released claims against the other party. Regal also agreed to support NCM LLC’s Plan and surrendered all 4,068,381 shares in the Company, totaling $13.0 million, upon the effective date of the Plan. In connection with the Regal Advertising Agreement, NCM LLC and Regal also agreed to dismiss with prejudice the ongoing litigation between the parties related to NCM LLC’s request to enforce certain provisions of the ESA, including the exclusivity provision. Subsequent to July 14, 2023, Regal is no longer an ESA Party or related party to NCM, Inc. or NCM LLC.

The material agreements with the ESA Parties are as follows:

•

ESAs. Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the ESA Parties’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the benefit of the ESA Parties). The advertising services include the use of the DCN equipment required to deliver the on-screen advertising and other content included in The Noovie® Show, use of the LEN and rights to sell and display certain lobby promotions. Further,30 to 60 seconds of advertising included in The Noovie Show is sold to the ESA Parties to satisfy the ESA Parties’ on-screen advertising commitments under their beverage concessionaire agreements. In consideration for access to the ESA Parties’ theaters, theater patrons, the network equipment required to display on-screen and LEN video advertising and the use of theaters for lobby promotions, the ESA Parties receive a monthly theater access fee. In conjunction with the 2019 ESA Amendments, NCM LLC also pays Cinemark, and previously Regal, incremental monthly theater access fees and, subject to NCM LLC's use of specified inventory, a revenue share in consideration for NCM LLC's access to certain on-screen advertising inventory after the advertised showtime of a feature film beginning November 1, 2019 and the underlying term of the ESAs were extended until 2041. The ESAs and 2019 ESA Amendments are considered leases with related parties under ASC 842. As described above, the Regal ESA was rejected by Regal in connection with Regal’s Chapter 11 case and terminated by the Regal Termination Agreement.

•

Common Unit Adjustment Agreement. The Common Unit Adjustment Agreement provides a mechanism for increasing or decreasing the membership units held by Cinemark based on the acquisition or construction of new theaters or sale of theaters that are operated by Cinemark and included in NCM LLC’s network.

•

Common Unit Membership Redemption. The NCM LLC Operating Agreement provides a redemption right of the Cinemark to exchange common membership units of NCM LLC for shares of the Company’s common stock on aone-for-one basis, or at the Company’s option, a cash payment based on thethree-day variable weighted average closing price of NCM, Inc.’s common stock prior to the redemption date.

•

Tax Receivable Agreement. The TRA provides for the effective payment by NCM, Inc. to Cinemark of 90% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that is actually realized as a result of certain increases in NCM, Inc.’s proportionate share of tax basis in NCM LLC’s tangible and intangible assets resulting from the IPO and related transactions.

•

Software License Agreement. At the date of the Company’s IPO, NCM LLC was granted a perpetual, royalty-free license from Cinemark to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the DCN to screens in the U.S. NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were developed jointly by NCM LLC and the Cinemark, if any.

Following is a summary of the related party transactions between the Company and its related parties (in millions):

(1)

For the years ended January 1, 2026, December 26, 2024 and December 28, 2023, there was no related party activity subsequent to the deconsolidation of NCM LLC on April 11, 2023 for AMC, Cinemark and Regal.

(2)

For the year ended December 28, 2023, Regal and Cinemark each purchased 60 seconds of on-screen advertising time (all ESA Parties have a right to purchase up to 90 seconds) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 second equivalent CPM rate specified by the ESA.

(3)

Comprised of payments from NCM LLC to NCM, Inc. for managing NCM LLC during the period where NCM LLC was deconsolidated of April 11, 2023 through August 7, 2023.

(4)

As part of the acquisition of Spotlight, the Company acquired a 25.0% ownership of Looking Glass Media, a local sales organization specializing in cinema advertising. Looking Glass Media sells local advertising on Spotlight's behalf. This revenue represents the portion of the proceeds collected by Looking Glass Media remitted to Spotlight for delivering the respective ads on the Spotlight Cinema Network. As of January 1, 2026, NCM had an accounts receivable balance with Looking Glass Media of $0.3 million included within“Receivables, net of allowance” on the audited Consolidated Balance Sheets.

(5)

Comprised of payments per theater attendee, payments per digital screen with respect to the ESA Party theaters included in the Company’s network, payments for access to higher quality digital cinema equipment and payments to Cinemark and Regal for their portion of the Platinum Spot revenue for the utilization of the theaters post-showtime in accordance with the 2019 ESA Amendments.

Pursuant to the terms of the NCM LLC Operating Agreement in place since the completion of the IPO, NCM LLC is required to make mandatory distributions on a proportionate basis to its members of available cash, as defined in the NCM LLC Operating Agreement, on a quarterly basis in arrears, contingent upon the Company's compliance with the covenants outlined within the 2025 Revolving Credit Facility. The portion of positive available cash due to ESA Parties is accrued within the “Amounts due to ESA Parties, net” on the audited Consolidated Balance Sheets. The portion of positive available cash due to NCM, Inc. is eliminated upon consolidation. As AMC, Cinemark and Regal are no longer related parties, there are no related party balances to reflect as of January 1, 2026. The available cash owed from NCM LLC as of January 1, 2026 and December 26, 2024 were as follows (in millions):

The Company generated available cash by NCM LLC to NCM, Inc. for the quarter ended January 1, 2026 of $30.8 million ($30.8 million for NCM, Inc.). The Company generated negative available cash of $13.4 million and $3.7 million in the first and second quarter of 2025, respectively, and positive available cash of $7.1 million in the third quarter of 2025. The cumulative negative available cash balance as of January 1, 2026 is $238.6 million (including $182.3 million for NCM, Inc. and $56.3 million for Cinemark). In accordance with the terms of the NCM LLC Operating Agreement, these amounts can only be offset against positive available cash within the second quarter of future years. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion.

AC JV, LLC Transactions—The Company accounts for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor that it would have virtually no influence over partnership operating and financial policies. Although NCM LLC does not have a representative on AC JV, LLC’s Board of Directors or any voting, consent or blocking rights with respect to the governance or operations of AC JV, LLC, the Company concluded that its interest was more than minor under the accounting guidance. NCM LLC’s investment in AC JV,

LLC was $0.8 million and $0.8 million as of January 1, 2026 and December 26, 2024, respectively. NCM LLC received cash distributions from AC JV, LLC of $0.6 million, $1.2 million and $0.6 million, during the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively. NCM LLC recorded equity in earnings for AC JV, LLC of $0.6 million, $1.2 million and $0.6 million during the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively, which are included in “Other non-operating income, net” in the audited Consolidated Statements of Operations.

BORROWINGS

The following table summarizes NCM LLC’s total outstanding debt as of January 1, 2026 and December 26, 2024 and the significant terms of its borrowing arrangements:

(1)

The interest rates on the revolving credit facilities are described below.

Debt Agreement—On January 24, 2025, NCM LLC entered into a Loan and Security Agreement with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. During the year ended January 1, 2026 NCM LLC has drawn $22.0 million from the facility and repaid $10.0 million of the facility resulting in an outstanding balance under the 2025 Credit Facility of $12.0 million as of January 1, 2026. Upon execution of the 2025 Credit Facility, NCM LLC recorded $0.9 million of debt issuance costs. As of January 1, 2026, NCM LLC's maximum availability under the $45.0 million 2025 Credit Facility was $32.4 million, net of letters of credit of $0.6 million.

Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor ofzero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default. A commitment fee of 0.25% is payable quarterly in arrears based on the average daily amount of the undrawn portion of the commitments under the 2025 Credit Facility for the preceding quarter. The 2025 Credit Facility has a $5.0 million sublimit for the issuance of letters of credit. Fees are payable on outstanding letters of credit at a per annum rate equal to 2.00%, plus certain customary fees payable in connection with the issuance, amendment, renewal and extension of letters of credit and the processing of drawings thereunder.

Certain of NCM LLC’s future subsidiaries (collectively, the “Guarantors”) are required to guarantee the repayment of NCM LLC’s obligations under the 2025 Credit Facility. The obligations of NCM LLC and any such Guarantors with respect to the 2025 Credit Facility are and will be secured by a pledge of substantially all assets of NCM LLC and each of the Guarantors, including, without limitation, accounts receivables, deposit accounts, intellectual property, investment property, inventory, equipment and equity interests in their respective subsidiaries.

The 2025 Credit Facility contains affirmative and negative covenants customary for financings of this type, with which NCM LLC was in compliance at January 1, 2026, including limitations on NCM LLC’s and its subsidiaries ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, make equity repurchases, pay subordinated indebtedness and enter into affiliate transactions. In addition, the 2025 Credit Facility contains financial covenants requiring NCM LLC to maintain a maximum leverage ratio of no greater than 2.25 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.50 to 1.00, each measured on a quarterly basis. The 2025 Credit Facility also includes events of default customary for facilities of this type and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the 2025 Credit Facility may be accelerated and/or the Company’s commitments terminated. The 2025 Credit Facility also contains representations, warranties, and events of defaults customary for this type of facility. As of January 1, 2026, NCM LLC’s fixed charge coverage ratio was 13.5 to 1.0 (versus the required minimum ratio of 1.50 to 1.00) and NCM LLC'smaximum leverage ratio was 0.4 to 1.0 (versus the required ratio of 2.25 to 1.0).

Loan, Security and Guarantee Agreement—On August 7, 2023, NCM LLC entered into a Loan, Security and Guarantee Agreement (the “Revolving Credit Facility 2023”) with CIT Northbridge Credit LLC as agent. The Revolving Credit Facility 2023 was an asset backed line facility where the capacity depends upon NCM LLC’s trade accounts receivable balance, as adjusted for aged balances and other considerations. The maximum availability NCM LLC had access to under the Revolving Credit Facility 2023 was $55,000,000. The proceeds of the Revolving Credit Facility 2023 could have been used for, inter alia, working capital and capital expenditures. The Revolving Credit Facility 2023 was to mature on August 7, 2026. The interest rate under the Revolving Credit Facility 2023 was a base rate of SOFR benchmark plus (i)3.75% ifless than 50% ofrevolving commitments are utilized or (ii)4.50% if 50% ormoreof revolving commitments are utilized (utilizing the average revolver usage for the prior calendar month as a benchmark for this determination). The Revolving Credit Facility 2023 also contained a financial maintenance covenant requiring that the fixed charge coverage ratio ending on the last day of each fiscal month is at least 1.1 to 1.0 during a “Trigger Period.” A Trigger Period began upon (i) an event of default or (ii) if availability was less than the greater of (a) $5,000,000 and (b)10% of aggregate revolving commitments. A Trigger Period ended only if (i) no event of default existed for the preceding thirty (30) consecutive days and (ii) availability was greater than both (a) $5,000,000 and (b)10% of aggregate revolving commitments. Upon the effectiveness of the Revolving Credit Facility 2023, NCM LLC immediately drew $10.0 million from the facility, which represented the only amount outstanding under the Revolving Credit Facility 2023 at any time. The Revolving Credit Facility 2023 also contained customary representations, warranties, covenants, events of default, terms and conditions, including limitations on liens, incurrence of debt, mergers and significant asset dispositions.

In connection with entering into the 2025 Credit Facility, NCM LLC repaid the $10.0 million balance outstanding in full and terminated all commitments under its Revolving Credit Facility 2023, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. This resulted in a loss on debt extinguishment of $1.8 million within the year ended January 1, 2026.

Pre-Chapter 11 Case Debt—The commencement of the Chapter 11 Case constituted an event of default and caused the automatic and immediate acceleration of all debt outstanding under or in respect of, NCM LLC’s Credit Agreements and senior notes. As of August 7, 2023, upon emergence from bankruptcy, all historical debt of NCM LLC was discharged and the historical credit agreements were terminated.

Future Maturities of Borrowings—The scheduled annual maturities on the 2025 Credit Facility as of January 1, 2026 are as follows (in millions):

SHARE-BASED COMPENSATION

The NCM, Inc. 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) was approved by NCM, Inc.'s stockholders on April 28, 2020 and approved 7,500,000 shares of common stock available for issuance or delivery under the 2020 Plan and an additional 7,500,000 shares of common stock available for issuance or delivery was approved on May 4, 2022. On August 3, 2023, the Company effected a one-for-ten (1:10) reverse stock split of its common stock, par value $0.01 per share. The reverse stock split, which was authorized by its Board of Directors, was approved by the Company’s stockholders on August 2, 2023. The reverse stock split reduced the number of outstanding shares of the Company’s 2020 Plan to 1,500,000. NCM, Inc.'s stockholders approved an additional 12,000,000 shares of common stock available for issuance or delivery under the 2020 Plan on November 2, 2023.

The Company began issuing shares under the 2020 Plan in the second quarter of 2020. The 2020 Plan replaced NCM, Inc.’s 2016 Equity Incentive Plan (the “2016 Plan”), which replaced the 2007 Equity Incentive Plan (the “2007 Plan”). The 2020 Plan also includes 2,388,302 shares related to the number of shares reserved for issuance under the 2016 Plan that remained available for grant as of the effective date of the 2020 Plan and the number of shares subject to awards granted under the 2007 Plan as of the effective date of the 2020 Plan, which can become available for grant again upon expiration, termination, cancellation or forfeiture of the original award. As of January 1, 2026,4,594,395 shares remain available for future grants (assuming 100% achievement of targets on performance-based restricted stock). The types of awards that may be granted under the 2020 Plan include stock options, stock appreciation rights, restricted stock, restricted stock units or other stock based awards. Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the 2016 Plan and 2020 Plan. Upon vesting of the restricted stock awards or exercise of options, NCM LLC will issue common membership units to the Company equal to the number of shares of the Company’s common stock represented by such awards.

Compensation Cost—The Company recogn ized$9.3 million, $12.2 million and $4.5 million for the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively, of share-based compensation expense within “Network operating costs”, “Selling and marketing costs” and “Administrative and other costs” in the Consolidated Statements of Operations as shown in the table below (in millions):

During the years ended January 1, 2026, December 26, 2024 and December 28, 2023, $0.0 million, $0.0 million and $0.1 million was capitalized, respectively, in a corresponding manner to the capitalization of employee’s salaries for capitalized labor. As of January 1, 2026, there was less than $1.0 million of unrecognized compensation cost related to unvested options, which will be recognized over a remaining period of 0.6 years. As of January 1, 2026, unrecognized compensation cost related to restricted stock units was approximately $7.8 million, which will be recognized over a weighted average remaining period of 1.5 years.

Stock Options—The Company granted stock options during 2025 and 2023 that remain unvested as of January 1, 2026. A portion of the stock options awarded were granted with an exercise price equal to the closing market price of NCM, Inc. common stock on the date the Company’s Board of Directors approved the grant. The remaining portion of stock options awarded were granted with an exercise price in excess of the closing market price of NCM, Inc. common stock on the date the Company’s Board of Directors approved the grant. All options have either 10-year or 15-year contractual terms. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing valuation model that uses the assumptions noted in the table below. Expected volatilities are based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted was developed based on historical and peer company data and represents the period of time that options granted are expected to be outstanding. The expected term of the options granted were adjusted to include the Company's cost of equity in order to incorporate the impact of the option's premium price and simulate a lattice model which resulted in an expected term in excess of the contractual term of 10 years. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. There wereno option awards granted for the year ended December 26, 2024. The following assumptions were used inthe valuation of the options for the year ended January 1, 2026 and December 28, 2023:

A summary of option award activity as of January 1, 2026, and changes during the year then ended are presented below:

Restricted Stock Units—Under the non-vested stock program, common stock of the Company may be granted at no cost to officers, independent directors and employees, subject to requisite service and/or financial performance targets. As such restrictions lapse, the award vests in that proportion. The participants are entitled to dividend equivalents, although the sale and transfer of such shares is prohibited and the shares are subject to forfeiture during the restricted period. Additionally, the accrued dividend equivalents are subject to forfeiture during the vesting period should the underlying units not vest. As of January 1, 2026, December 26, 2024 and December 28, 2023, accrued dividend equivalents totaled $0.2 million, $0.0 million and $0.3 million, respectively and during the years ended January 1, 2026, December 26, 2024 and December 28, 2023, the Company paid $0.1 million, $0.3 million and $0.5 million, respectively, for dividend equivalents upon vesting of the restricted stock units. During the year ended January 1, 2026, the Company issued time-based restricted stock units to its employees which vest over athree-year period withone-third vesting on each anniversary of the date of grant and performance-based restricted stock units which vest following a cumulative three-year measurement period to the extent that the Company achieves specified non-GAAP targets at the end of the measurement period. Certain other vesting periods have also been used. The Company also grants restricted stock units to its non-employee directors that vest after approximately one year. In the year ended December 26, 2024, the Company issued grants to certain employees under a management incentive plan related to the Company's emergence from the Chapter 11 Case. The structure and size of these grants differed from historical grants. The grants consisted of time-based restricted stock units which vest over athree-year period, with 30% vesting at the end of fiscal year 2024,7.5% vesting each quarter of 2025 and 10% vesting each quarter of 2026. The grants also included performance-based restricted stock units which vest inthree equal tranches, each with a one-year measurement period to the extent that the Company achieves specified non-GAAP targets at the end of each measurement period andmarket-based restricted stock units which vest at any point before the end of 2026 to the extent that the Company achieves specified shareholder value prior to the end of the measurement period.

All restricted stock units will be settled in shares of the Company’s common stock. The grant date fair value of the time-based and performance-based restricted stock units is based on the closing market price on NCM, Inc. common stock on the date of grant. An annual forfeiture rate of 2-6% was estimated to reflect the potential separation of employees. The grant date fair value of the market-based restricted stock units was calculated using a Monte Carlo simulation model. This model considers various subjective assumptions as inputs which involve inherent uncertainties and the application of our judgment as it relates to market volatilities, the historical volatility of our stock price, risk-free rates and expected life. The RSU awards include the right to receive dividend equivalents, subject to vesting. The weighted average grant date fair value of non-vested stock was $5.53, $3.51 and $3.42 for the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively. The total fair value of awards that vested during the years ended January 1, 2026, December 26, 2024 and December 28, 2023 was $5.7 million, $9.6 million and $7.1 million, respectively.

A summary of restricted stock unit activity as of January 1, 2026, and changes during the year then ended are presented below:

(1)

Includes unvested 3,053,509 shares of performance-based restricted stock units as of December 26, 2024,515,171 shares granted during the year and 121,288 shares forfeited during the year, resulting in 2,886,077 unvested shares of performance-based restricted stock units as of January 1, 2026.

(2)

Includes 88,637 vested shares that were withheld to cover tax obligations and were subsequently canceled.

The above table reflects performance-based restricted stock granted at 100% achievement of performance conditions and as such does not reflect the maximum or minimum number of shares of performance-based restricted stock contingently issuable. No shares of the performance-based restricted stock will be issued if the specified targets are not met. As of January 1, 2026, the total number of performance-based restricted stock units that are ultimately expected to vest, after consideration of expected forfeitures and current projec tions of estimated vesting of performance-based restricted stock units is 215,364 shares.

EMPLOYEE BENEFIT PLANS

The Company sponsors the NCM 401(k) Profit Sharing Plan (the “Plan”) under Section 401(k) of the Internal Revenue Code of 1986, as amended, for the benefit of substantially all full-time employees. The Plan provides that participants may contribute up to 20% of their compensation, subject to Internal Revenue Service limitations. Employee contributions are invested in various investment funds based upon election made by the employee. The Company made discretionary contributions of $0.4 million,$0.2 million and $0.0 million during the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively. In response to the COVID-19 Pandemic and Chapter 11 Case, the Company temporarily suspended its match of a portion of employees 401(k) contributions effective April 2020 through December 28, 2023, which was reinstated at the beginning of 2024.

COMMITMENTS AND CONTINGENCIES

Legal Actions—The Company is subject to claims and legal actions in the ordinary course of business. The Company believes such claims will not have a material effect, individually and in aggregate, on its financial position, results of operations or cash flows.

Operating Commitments-Facilities—The Company has entered into operating lease agreements for its corporate headquarters and other regional offices. The Company has right-of-use (“ROU”) assets of $8.8 million and short-term and long-term lease liabilities of $1.5 million and $9.3 million, respe ctively, on the balance sheet as of January 1, 2026 for all material leases with terms longer than twelve months. As of December 26, 2024 the Company had ROU assets of $12.2 million and short-term and long-term lease liabilities of $1.7 million and $12.5 million, respectively, for all material leases with terms longer than twelve months. These balances are included within “Other assets”, “Other current liabilities” and “Long-term lease liabilities”, respectively, on the audited Consolidated Balance Sheets. As of January 1, 2026, the Company had a weighted average remaining lease term of 7.5 years on these leases.

The Company has also entered into certain short-term leases with a term of less than one year. These leases are not included within the Company’s ROU assets or lease liabilities due to the Company’s election of the practical expedient in ASC 842-20-25-2 for short-term leases.

On December 8, 2025, the Company entered into a lease modification with the landlord for the Company's headquarter office space in Centennial, Colorado. The commencement of the new leased asset and the termination of the current leased asset are contingent upon landlord-controlled construction and the associated timing of completion is uncertain as of January 1, 2026. Once complete, the Company will lease the new premises for a term of 11 years and will vacate the current premises prior to the original end date of June 2028.

During the year ended January 1, 2026, December 26, 2024 and December 28, 2023, the Company recognized the following components of total lease cost (in millions). These costs are presented within “Selling and marketing costs” and “Administrative and other costs” within the audited Consolidated Statements of Operations depending upon the nature of the use of the facility.

The Company made lease payments for the year ended January 1, 2026, December 26, 2024 and December 28, 2023 of$2.4 million, $2.0 million and $3.6 million, respectively. These payments are included within cash flows from operating activities within the audited Consolidated Statement of Cash Flows. The minimum lease payments under noncancellable operating leases as of January 1, 2026 were as follows (in millions):

When measuring the ROU assets and lease liabilities recorded, the Company utilized its incremental borrowing rate in order to determine the present value of the lease payments as the leases do not provide an implicit rate. The Company used the rate of interest that it would have paid to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. As of January 1, 2026, the Company’s weighted average annual discount rate used to establish the ROU assets and lease liabilities was 3.7%.

Operating Commitments - ESAs and Affiliate Agreements—The Company has entered into long-term ESAs with the ESA Parties and multi-year agreements with certain network affiliates, or third-party theater circuits. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. The Company recognizes intangible assets upon issuance of membership units to the ESA Parties in accordance with NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to the affiliates for the contractual rights to provide the Company’s services within their theaters as further discussed within Note 6—Intangible Assets. These ESAs and network affiliate agreements are considered leases under ASC 842 once the asset is identified and the period of control is determined upon the scheduling of the showtimes by the exhibitors, typically one week prior to the showtime. As such, the leases are considered short-term in nature, specifically less than one month. Within ASC 842, leases with terms of less than one month are exempt from the majority of the accounting and disclosure requirements, including disclosure of short-term lease expense. No ROU assets or lease liabilities were recognized for these agreements and no change to the balance sheet presentation of the intangible assets was necessary. However, the amortization of these intangible assets is considered lease expense and is presented within ‘Amortization expense’ within the Consolidated Statement of Operations. The Company recorded $18.8 million, $23.4 million and $16.7 million in amortization of these intangible assets in the years ended January 1, 2026, December 26, 2024 and December 28, 2023, respectively.

In consideration for NCM LLC’s access to the ESA Parties’ and network affiliates' theater attendees for on-screen advertising and use of lobbies and other space within the exhibitors’ theaters for the LEN and lobby promotions, the ESA Parties and network affiliates receive payments based either upon number of attendees (pre or post-showtime), a revenue share, a fee per screen or digital screen or a combination, including a minimum revenue guarantee per attendee. Many of these agreements contain increases annually or every five years to the respective fee structures or guaranteed minimums, either per patron, per theater and/or per digital screen in a range from 2% to 8% depending upon the underlying agreement. The theater access fee paid in the aggregate to Cinemark cannot be less than 12% of NCM LLC’s aggregate advertising revenue (as defined in the ESA), or it will be adjusted upward to reach this minimum payment. As of January 1, 2026, December 26, 2024 and December 28, 2023, the Company hadno liabilities recorded for the minimum payment, as the theater access fee was in excess of the minimum. The Company does not owe any theater access fees or revenue share when the theaters are not displaying the Company's pre-show or when the Company does not have access to the theaters. The digital screen fee is calculated based upon average screens in use during each month. As part of the AMC 2025 Agreement, the Company will modernize certain lobbies within AMC's theaters, which will require the Company to expend refurbishment costs upon identification of a third-party vendor.

As part of the network affiliate agreements entered into in the ordinary course of business under which the Company sells advertising for display in various network affiliate theater chains, the Company has agreed to certain minimum revenue guarantees on a per attendee basis. If a network affiliate achieves the attendance set forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee if the amount paid under the revenue share arrangement is less than the guaranteed amount. As of January 1, 2026, the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $315.7 million over the remaining terms of the network affiliate agreements, contingent upon the achievement of network affiliate minimum attendance thresholds. These minimum guarantees relate to various affiliate agreements ranging in term fromone tonine years, prior to any renewal periods of which some are at the option of the Company. During the year ended January 1, 2026, December 26, 2024 and December 28, 2023, the Company paid $1.0 million,$0.1 million and $0.0 million, respectively, related to these minimum guarantees. As of January 1, 2026 and December 26, 2024, the Company had $1.1 million and $0.7 million, respectively, in liabilities recorded within “Accounts payable” in the Consolidated Balance Sheets for these obligations, as such guarantees are less than the expected share of revenue paid to the affiliate.

FAIR VALUE MEASUREMENTS

Non-Recurring Measurements—Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets include long-lived assets, intangible assets, cost and equity method investments and borrowings.

Long-Lived Assets, Intangible Assets and Other Investments—As described in Note 1—Basis of Presentation and Summary of Significant Accounting Policies, the Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets, investments accounted for under the cost or equity method and notes receivable for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable.

When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge is recorded to write the asset down to its estimated fair value.

Other investments consisted of the following (in millions):

The investment in AC JV was initially valued using comparative market multiples. The other investments were recorded based upon the fair value of the services provided in exchange for the investment. Refer to Note 1—Basis of Presentation and Summary of Significant Accounting Policies for more details. As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy. The increase in ‘Other investments’ from December 26, 2024 to January 1, 2026 is due to a $2.0 million cash investment in an entertainment company and advertising services performed in exchange for equity in various companies. During the years ended January 1, 2026 and December 26, 2024, no observable price changes or impairments have been recorded as a result of the Company’s qualitative assessment of identified events or changes in the circumstances of the remaining investments, which resulted in the investments totaling $8.1 million as of January 1, 2026.

Borrowings—The carrying amount of the 2025 Credit Facility is considered a reasonable estimate of fair value due to its floating-rate terms.

Recurring Measurements—All current assets and liabilities are estimated to approximate their fair value due to the short-term nature of these balances. There wereno Company assets and liabilities measured on a recurring basis as of January 1, 2026, including cash equivalents or marketable securities. The fair values of the Company’s assets and liabilities measured on a recurring basis as of December 26, 2024 pursuant to ASC 820-10 Fair Value Measurements and Disclosures are as follows (in millions):

(1)

Cash Equivalents—The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts.

(2)

Short-Term and Long-Term Marketable Securities—The carrying amount and fair value of the marketable securities are equivalent since the Company accounts for these instruments at fair value. The Company’s certificates of deposit are valued at cost plus interest. The inputs in the valuation are classified as Level 1 if there is an active market for these securities; however, if an active market does not exist, the inputs are recorded at a lower level in the fair value hierarchy. The value of the certificates of deposit is derived from contractual terms. The inputs to the valuation pricing models are observable, and as such are generally classified as Level 2 in the fair value hierarchy.

The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of December 26, 2024 are as follows:

(1)

Maturities— Securities available for sale include obligations with various contractual maturity dates some of which are greater than one year. The Company considers the securities to be liquid and convertible to cash within 30 days.

VALUATION ACCOUNT

The Company’s valuation allowance on deferred tax assets for the year ended January 1, 2026 and December 26, 2024 was as follows (in millions):

(1)

The changes within the valuation allowance during the year ended January 1, 2026 and December 26, 2024 and relate to its deferred tax assets which the Company determined it is more-likely-than-not it will not be able to realize before they expire.

16. SUBSEQUENT EVENTS

Dividend—On February 26, 2026, the Company declared a cash dividend of $0.03 per share (approximately $2.8 million in the aggregate) on each share of the Company’s common stock (not including outstanding restricted stock units which will accrue dividends until the shares vest) to stockholders of record on March 9, 2026 to be paid on March 23, 2026.

Share Repurchase Program—Subsequent to the year ended January 1, 2026, in accordance with the stock repurchase plan approved on March 18, 2024 by the Company’s Board of Directors,209,757 shares were repurchased on the open market for $0.8 million. In accordance with ASC 505—Equity, these shares were retired and any excess over par value paid was recorded as a reduction to retained earnings.