IMAX CORP

(Tabular amounts in thousands of U.S. Dollars, unless otherwise stated)

1. Basis of Presentation

Accounting Principles

IMAX Corporation (together with its subsidiaries, unless the context requires otherwise, the “Company” or “IMAX”), prepares financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures have been condensed or omitted as permitted by such rules and regulations. In the opinion of the Company’s management, the unaudited Condensed Consolidated Financial Statements reflect all necessary adjustments for a fair statement of interim results. The Condensed Consolidated Balance Sheet at December 31, 2025 was derived from the Company’s audited annual Consolidated Financial Statements in the Company’s 2025 Annual Report on Form 10-K (the “2025 Form 10-K”). The interim results presented in the Company’s Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows are not necessarily indicative of results for a full year. Certain prior period comparatives have been revised to conform with the current period presentation.

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements in the 2025 Form 10-K, which includes significant accounting policies adopted by the Company.

Principles of Consolidation

These unaudited Condensed Consolidated Financial Statements include the accounts of IMAX together with its consolidated subsidiaries, except for subsidiaries which have been identified as variable interest entities (“VIEs”) where the Company is not the primary beneficiary. All intercompany accounts and transactions have been eliminated. The Company has evaluated its various variable interests to determine whether they are VIEs as required by U.S. GAAP.

The Company has interests inten film production companies, which have been identified as VIEs. The Company is the primary beneficiary of and consolidates five of these entities as it has the power to direct the activities that most significantly impact the economic performance of the VIE, and it has the obligation to absorb losses or the right to receive benefits from the respective VIE that could potentially be significant. The majority of the assets relating to these production companies are held by the IMAX Original Film Fund (the “Original Film Fund”). The Company does not consolidate the other five film production companies because it does not have the power to direct their activities and it does not have the obligation to absorb the majority of the expected losses or the right to receive expected residual returns. The Company uses the equity method of accounting for these entities, which continues to not be material to the Company’s Condensed Consolidated Financial Statements. A change in the value of an equity method investment that is other than temporary is recognized in the Condensed Consolidated Statements of Operations.

As of March 31, 2026 and December 31, 2025, total assets and liabilities of the Company’s consolidated VIEs were as follows:

Estimates and Assumptions

In preparing the Company’s Condensed Consolidated Financial Statements, management makes judgments in applying various accounting policies. The areas of policy judgment are consistent with those reported in Note 2 of the Company’s audited Consolidated Financial Statements included in its 2025 Form 10-K. The significant estimates made by management include, but are not limited to: (i) the allocation of the transaction price in an IMAX System arrangement to distinct performance obligations; (ii) the amount of variable consideration to be earned on sales of IMAX Systems based on projections of future box office performance and inflation; (iii) expected credit losses on accounts receivable, financing receivables, and variable consideration receivables; (iv) provisions for the write-down of excess and obsolete inventories; (v) the fair values of the reporting units used in assessing the recoverability of goodwill; (vi) the cash flow projections used in testing the recoverability of long-lived assets such as the system equipment supporting joint revenue sharing arrangements (“JRSAs”); (vii) the economic lives of the system equipment supporting joint revenue sharing arrangements; (viii) the useful lives of tangible and intangible assets; (ix) the ultimate revenue forecasts used to test the recoverability of film assets; (x) the discount rates used to determine the present value of financing receivables, variable consideration and lease liabilities, as well as to determine the fair values of the Company’s reporting units for the purpose of assessing the recoverability of goodwill; (xi) pension plan assumptions; (xii) estimates related to the fair value and projected vesting of share-based payment awards; (xiii) the valuation allowance of deferred income tax assets; and (xiv) reserves related to uncertain tax positions.

2. New Accounting Standards and Accounting Changes

Adoption of New Accounting Pronouncements

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in ASU 2025-05 provide a practical expedient that allows entities to assume current economic conditions as of the balance sheet date will remain unchanged throughout the reasonable and supportable forecast period when estimating expected credit losses for eligible financial assets, including trade receivables and contract assets. The Company adopted ASU 2025-05 for the three months ended March 31, 2026. The adoption did not have a material impact on its Condensed Consolidated Financial Statements.

Recently Issued FASB Accounting Standards Codification Updates Not Yet Adopted

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” (“ASU 2024-03”). The amendments in ASU 2024-03 expand disclosures about specific expense categories presented on the face of the income statement and addresses requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) in commonly presented expense captions (such as cost of sales, selling, general and administrative expenses). ASU 2024-03 is effective for interim periods within annual reporting periods beginning after December 15, 2027 with early adoption permitted. The Company is in the process of evaluating the impact of ASU 2024-03 on its Consolidated Financial Statements.

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments in ASU 2025-06 clarify and refine the criteria for capitalizing costs related to internal-use software. Under the new guidance, capitalization is permitted when both of the following conditions are met: (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for fiscal periods beginning after December 15, 2027, and interim periods thereafter. The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

Hedge Accounting Improvements

In November 2025, the FASB issued ASU No. 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements” (“ASU 2025-09”). The amendments in ASU 2025-09 more closely align hedge accounting with the economics of an entity’s risk management activities for (i) similar risk assessment for cash flow hedges, (ii) hedging forecasted interest payment on choose-your-rate debt instruments, (iii) cash flow hedges of nonfinancial forecasted transactions, (iv) net written options as hedging instruments, and (v) foreign-currency-denominated debt instrument as hedging instrument and hedged item. ASU 2025-09 is effective for fiscal periods beginning after December 15, 2026, and interim periods thereafter. The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

Accounting for Government Grants Received by Business Entities

In December 2025, the FASB issued ASU No. 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities” (“ASU 2025-10”). The amendments in ASU 2025-10 establishes accounting and guidance for a government grant received by an entity. Under the new guidance, a government grant is not recognized until it is probable that an entity will comply with the conditions attached to the grant and the grant will be received, and recognition guidance is met. A grant related to an asset is recognized on the balance sheet as an entity incurs the related costs for which the grant is intended to compensate. ASU 2025-10 is effective for fiscal periods beginning after December 15, 2028, and interim periods thereafter. The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements.

The Company considers the applicability and impact of all recently issued FASB accounting standard codification updates. ASUs that are not noted above were assessed and determined to be not applicable or not significant to the Company’s Condensed Consolidated Financial Statements for the period ended March 31, 2026.

3. Receivables

The ability of the Company to collect its receivables is principally dependent on the viability and solvency of individual theater operators which is significantly influenced by consumer behavior and general economic conditions. Theater operators, or other customers, may experience financial difficulties that could result in them being unable to fulfill their payment obligations to the Company.

In order to mitigate the credit risk associated with the Company’s receivables, management performs an initial credit evaluation prior to entering into an arrangement with a customer and then regularly monitors the credit quality of each customer through an analysis of collections history and aging. This monitoring process includes meetings on at least a monthly basis to identify credit concerns and potential changes in credit quality classification. A customer may improve their credit quality classification once a substantial payment is made on an overdue balance or when the customer has agreed to a payment plan and payments have commenced in accordance with that plan. Changes in credit quality classification are dependent upon management approval. The Company’s internal credit quality classifications are reported in Note 4 of the Company’s audited Consolidated Financial Statements included in its 2025 Form 10-K.

During the period when the accretion of Finance Income is suspended for Financing Receivables, any payments received from a customer are applied against the outstanding balance owed. If payments are sufficient to cover any unreserved receivables, a reversal of the provision is recorded to the extent of the residual cash received. Once the collectability issues are resolved and the customer has returned to being in good standing, the Company will resume recognition of Finance Income.

When a customer’s aging exceeds 90 days, the Company’s policy is to perform an enhanced review to assess collectability of the theater’s past due accounts. The over 90 days past due category may be an indicator of potential impairment as up to 90 days outstanding is considered to be a reasonable time to resolve any issues.

The Company develops an estimate of expected credit losses by class of receivable and customer type through a calculation that utilizes historical loss rates, which are then adjusted for specific receivables that are judged to have a higher-than-normal risk profile after considering management’s internal credit quality classifications. Additional credit loss provisions are also recorded taking into account macro-economic and industry risk factors. The write-off of any billed receivable balance requires the approval of management.

Management’s judgments regarding expected credit losses are based on the facts available to management and involve estimates about the future. As a result, the Company’s judgments and associated estimates of credit losses may ultimately prove, with the benefit of hindsight, to be incorrect. The impacts of inflation, and rising interest rates may impact future credit losses. The Company will continue to monitor economic trends and conditions and portfolio performance and adjust its allowance for credit loss accordingly.

Accounts Receivable

Accounts receivable principally includes amounts currently due to the Company under IMAX System sale and sales-type lease arrangements, contingent fees owed by theater operators as a result of box office performance, and fees for maintenance services. Accounts receivable also includes amounts due to the Company from movie studios and other content creators principally for digitally remastering films into IMAX formats, as well as for film distribution and post-production services.

The following tables summarize the activity in the allowance for credit losses related to Accounts Receivable for the three months ended March 31, 2026 and 2025:

For the three months ended March 31, 2026, the Company’s allowance for current expected credit losses related to Accounts Receivable increased by less than $0.1 million. The Company recorded $0.2 million in write-offs in the allowance for credit losses for the three months ended March 31, 2026.

For the three months ended March 31, 2025, the Company’s allowance for current expected credit losses related to Accounts Receivable decreased by$0.1 million.

Financing Receivables

Financing receivables are due from theater operators and consist of the Company’s net investment in sales-type leases and receivables associated with financed sales of IMAX Systems. As of March 31, 2026 and December 31, 2025, financing receivables consisted of the following:

As of March 31, 2026 and December 31, 2025, the weighted-average remaining lease term and weighted-average interest rate associated with the Company’s sales-type lease arrangements and financed sales receivables, as applicable, were as follows:

The tables below provide information on the Company’s net investment in leases by credit quality indicator as of March 31, 2026 and December 31, 2025. The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis as per the origination year of the relationship, and include both billed and unbilled amounts.

The tables below provide information on the Company’s financed sales receivables by credit quality indicator as of March 31, 2026 and December 31, 2025. The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis as per the origination year of the relationship, and include both billed and unbilled amounts.

The following tables provide an aging analysis for the Company’s net investment in leases and financed sales receivables as of March 31, 2026 and December 31, 2025:

The following tables provide information about the Company’s net investment in leases and financed sales receivables with billed amounts past due for which it continues to accrue finance income as of March 31, 2026 and December 31, 2025. The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis and include both billed and unbilled amounts.

The following table provides information about the Company’s net investment in leases and financed sale receivables that were on nonaccrual status as of March 31, 2026 and December 31, 2025:

For the three months ended March 31, 2026 and 2025, the Company didnot recognize Finance Income related to the net investment in leases on nonaccrual status. For the three months ended March 31, 2026, the Company recognized less than $0.1 million (2025 — less than $0.1 million) in Finance Income related to the financed sales receivables in nonaccrual status.

The following tables summarize the activity in the allowance for credit losses related to the Company’s net investment in leases and financed sale receivables for the three months ended March 31, 2026 and 2025:

For the three months ended March 31, 2026, the Company’s allowance for current expected credit losses related to its net investment in leases decreased by $0.4 million (2025 — increased by less than $0.1 million), and financed sale receivables decreased by less than $0.1 million (2025 — decreased by $0.2 million).

Variable Consideration Receivables

In sale arrangements, variable consideration may become due to the Company from theater operators if certain annual minimum box office receipt thresholds are exceeded. Such variable consideration is recorded as revenue in the period when the sale is recognized and adjusted in future periods based on actual results and changes in estimates. Variable consideration is only recognized to the extent the Company believes there is not a risk of significant revenue reversal.

The following table summarizes the activity in the Allowance for Credit Losses related to Variable Consideration Receivables for the three months ended March 31, 2026 and 2025:

For the three months ended March 31, 2026, the Company’s allowance for current expected credit losses related to Variable Consideration Receivables decreased by less than $0.1 million (2025 — decreased by less than $0.1 million).

4. Lease Arrangements

IMAX Corporation as a Lessor

The Company provides IMAX Systems to customers through long-term lease arrangements that for accounting purposes are classified as sales-type leases. Under these arrangements, in exchange for providing the IMAX System, the Company earns fixed upfront and ongoing consideration. Certain arrangements that are legal sales are also classified as sales-type leases as certain clauses within the arrangements limit transfer of title or provide the Company with conditional rights to the system. The customer’s rights under the Company’s sales-type lease arrangements are described in Note 2 of the Company’s audited Consolidated Financial Statements included in its 2025 Form 10-K. Under the Company’s sales-type lease arrangements, the customer has the ability and the right to operate the hardware components or direct others to operate them in a manner determined by the customer. The Company’s lease portfolio terms are typically non-cancellable for 10 to 20 years with renewal provisions from inception. The Company’s sales-type lease arrangements do not contain a guarantee of residual value at the end of the lease term. The customer is required to pay for executory costs such as insurance and taxes and is required to pay the Company for maintenance and an extended warranty generally after the first year of the lease until the end of the lease term. The customer is responsible for obtaining insurance coverage for the IMAX System commencing on the date specified in the arrangement’s shipping terms and ending on the date the IMAX System is returned to the Company.

The Company also provides IMAX Systems to customers through JRSAs. Under the traditional form of these arrangements, in exchange for providing the IMAX System under a long-term lease, the Company earns rent based on a percentage of contingent box office receipts and, in some cases, concession revenues, rather than a fixed upfront fee or annual minimum payments.

Under certain other JRSAs, known as hybrid arrangements, the customer is responsible for making fixed upfront payments prior to the delivery and installation of the IMAX System.

Under JRSAs, the customer has the ability and the right to operate the hardware components or direct others to operate them in a manner determined by the customer. The Company’s JRSAs are typically non-cancellable forten years or longer with renewal provisions. Title to the IMAX System under a JRSA generally does not transfer to the customer. The Company’s JRSAs do not contain a guarantee of residual value at the end of the lease term. The customer is required to pay for executory costs such as insurance and taxes and is required to pay the Company for maintenance and an extended warranty throughout the term. The customer is responsible for obtaining insurance coverage for the IMAX System commencing on the date specified in the arrangement’s shipping terms and ending on the date the IMAX System is returned to the Company.

The following lease payments are expected to be received by the Company for its sales-type leases and JRSAs in each of the remainder of 2026, next four years and thereafter following the March 31, 2026 balance sheet date:

5. Inventories

As of March 31, 2026 and December 31, 2025, Inventories consisted of the following:

As of March 31, 2026, Inventories included balances of $1.6 million (December 31, 2025 — $1.0 million) for which title had passed to the customers, but the criteria for revenue recognition were not met as of the balance sheet date.

During the three months ended March 31, 2026, and 2025, the Company recorded write-downs of less than $0.1 million and $0.1 million, respectively, in Costs and Expenses Applicable to Revenues ― Technology Sales.

6. Borrowings

Revolving Credit Facility Borrowings, Net

As of March 31, 2026 and December 31, 2025, Revolving Credit Facility Borrowings, Net included the following:

Wells Fargo Credit Agreement

The Company is a party to a Seventh Amended and Restated Credit Agreement, dated as of July 14, 2025 (the “Credit Agreement”), that provides for a credit facility (the “Credit Facility”). The Company’s obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the “Guarantors”), and are secured by first-priority security interests in substantially all of the assets of the Company and the Guarantors.

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

The Credit Agreement requires that the Company does not exceed a maximum Senior Secured Net Leverage Ratio (as defined therein) of 3.25:1.00, which may be increased under certain circumstances and is tested on the last day of each fiscal quarter. The Company was in compliance with this requirement as of March 31, 2026 as the Senior Secured Net Leverage Ratio was 0.02:1.00.

Loans under the Credit Facility will bear interest, at the Company’s option, at (i) Term SOFR, Eurocurrency Rate or Term CORRA plus a margin ranging from 1.00% to 1.75% per annum or (ii) the U.S. base rate or the Canadian prime rate plus a margin ranging from 0.25% to 1.00% per annum, in each case depending on the Company’s total leverage ratio. In no event will Term SOFR, Eurocurrency Rate or Term CORRA be less than 0.00% per annum.

As of March 31, 2026, borrowings under the Credit Facility were $49.0 million (December 31, 2025 — $37.0 million) and bore interest at Term SOFR (as defined in the Credit Agreement), plus a margin of 1.50% per annum (December 31, 2025 —1.50%) based on the Company’s total leverage ratio. The effective interest rate for the three months ended March 31, 2026 was 5.19% (2025 —6.18%).

As of March 31, 2026 and December 31, 2025, the Company hadno letters of credit or advance payment guarantees outstanding under the Credit Facility. As of March 31, 2026, the amount available for future borrowings under the Credit Facility was $326.0 million (December 31, 2025 — $338.0 million).

Foreign Exchange Facility

Within the Credit Facility, the Company is able to purchase foreign currency forward contracts and/or other swap arrangements. As of March 31, 2026, the net unrealized gain on the Company’s outstanding foreign currency forward contracts was less than $0.1 million, representing the amount by which the fair value of these forward contracts exceeded their nominal value (December 31, 2025 — net unrealized gain of $1.0 million). As of March 31, 2026, the notional value of the Company’s outstanding foreign currency forward contracts was $38.5 million (December 31, 2025 — $48.4 million).

Bank of China Facility

As of March 31, 2026, and December 31, 2025, there wereno borrowings outstanding under the Bank of China Facility (as defined and described in Note 13 to the Company’s audited Consolidated Financial Statements in its 2025 Form 10-K) and outstanding letters of guarantee were RMB 0.8 million ($0.1 million).

As of March 31, 2026, the amount available for future borrowings under the Bank of China Facility was RMB 190.0 million ($27.5 million) and the amount available for letters of guarantee was RMB 9.2 million ($1.3 million). The amount available for future borrowings under the Bank of China Facility is not subject to a standby fee. The effective interest rate for the three months ended March 31, 2026 was 0% (2025 —0%). There wereno amounts drawn under the Bank of China Facility during the three months ended March 31, 2026. The Bank of China Facility has been renewed to April 15, 2027.

HSBC China Facility

As of March 31, 2026, and December 31, 2025, no borrowings were outstanding under the HSBC China Facility (as defined and described in Note 13 to the Company’s audited Consolidated Financial Statements in its 2025 Form 10-K). As of March 31, 2026, and December 31, 2025 the amount available for future borrowings under the HSBC China Facility was RMB 200.0 million ($28.9 million). The effective interest rate for the three months ended March 31, 2026 was 0% (December 2025 —0%).

NBC Facility

The NBC Facility (as defined and described in Note 13 to the Company’s audited Consolidated Financial Statements in its 2025 Form 10-K) has been renewed to October 8, 2026. The Company didnot have any letters of credit or advance payment guarantees outstanding as of March 31, 2026 and December 31, 2025 under the NBC Facility.

Convertible Notes and Other Borrowings, Net

As of March 31, 2026 and December 31, 2025, Convertible Notes and Other Borrowings, Net included the following:

2026 Convertible Notes

On March 19, 2021, the Company issued $230.0 million of 0.500% Convertible Senior Notes due 2026 (the “2026 Convertible Notes”). In connection with the pricing of the 2026 Convertible Notes, the Company entered into privately negotiated capped call transactions (the “2026 Capped Call Transactions”) with certain financial institutions to reduce potential dilution in connection with the redemption of the 2026 Convertible Notes.

On November 6, 2025, the Company completed the repurchase of $229.3 million (or 99.7%) of the outstanding principal amount of the 2026 Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of holders. During the three months ended March 31, 2026, certain holders of the remaining outstanding 2026 Convertible Notes elected to convert 217 notes ($0.2 million) of the outstanding principal. As a result of this election, the Company recorded a loss on debt extinguishment of $0.1 million in Interest Expense in the Condensed Consolidated Statement of Operations. As of March 31, 2026, the Company recorded a $0.3 million liability in Accrued and other liabilities in the Condensed Consolidated Balance Sheet. The liability for the converted bonds was settled on April 1, 2026, along with the remaining unconverted and outstanding 2026 Convertible Notes. Concurrently with this April 1, 2026 transaction, the Company terminated the remaining portion of the associated 2026 capped call transactions.

2030 Convertible Notes

On November 6, 2025, the Company issued $250.0 million of 0.750% Convertible Senior Notes due 2030 (the “2030 Convertible Notes”) in a private placement conducted pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the issuance of the 2030 Convertible Notes were $243.1 million, after deducting the initial purchasers’ discounts and commissions, and were used to repurchase $229.3 million of the outstanding principal amount of the 2026 Convertible Notes.

The 2030 Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.750% per annum on the principal of $250.0 million, payable semi-annually in arrears on May 15 and November 15 of each year. The 2030 Convertible Notes will mature on November 15, 2030, unless they are redeemed or repurchased by the Company or converted on an earlier date.

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

Federal Economic Development Loan

As of March 31, 2026, the Federal Economic Development Loan (as defined and described in Note 13 to the Company’s audited Consolidated Financial Statements in its 2025 Form 10-K) had a carrying value of $0.8 million, net of unaccreted interest benefit and is recorded within Convertible Notes and Other Borrowings, Net on the Company’s Condensed Consolidated Balance Sheets.

7. Commitments, Contingencies and Guarantees

Commitments

In the ordinary course of its business, the Company enters into contractual agreements with third parties that include non-cancelable payment obligations, for which it is liable in future periods. These arrangements can include terms binding the Company to minimum payments and/or penalties if it terminates the agreement for any reason other than an event of default as described by the agreement.

Contingencies and guarantees

The Company is involved in lawsuits, claims, and proceedings, including those identified below, which arise in the ordinary course of business. Management is required to assess the likelihood of any adverse judgments or outcomes related to these legal contingencies, as well as potential ranges of probable or reasonably possible losses. The Company records a provision for a liability when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The determination of the amount of any liability recorded or disclosed is reviewed at least quarterly based on a careful analysis of each individual exposure with, in some cases, the assistance of outside legal counsel, taking into account the impact of negotiations, settlements, rulings, and other pertinent information related to the case. The amount of liabilities recorded or disclosed for these contingencies may change in the future due to changes in management’s judgments resulting from new developments or changes in settlement strategy. Any resulting adjustment to the liabilities recorded by the Company could have a material adverse effect on its results of operations, cash flows, and financial position in the period or periods in which such changes in judgment occur. The Company believes it has adequate provisions for any such matters. The Company expenses legal costs relating to its lawsuits, claims, and proceedings as incurred.

In January 2004, the Company and IMAX Theatre Services Ltd., a subsidiary of the Company, commenced an arbitration seeking damages before the International Court of Arbitration of the International Chamber of Commerce (the “ICC”) with respect to the breach by Electronic Media Limited (“EML”) of its December 2000 agreement with the Company. In June 2004, the Company commenced a related arbitration before the ICC against EML’s affiliate, E-City Entertainment (I) PVT Limited (“E-City”). On March 27, 2008, the arbitration panel issued a final award in favor of the Company in the amount of $11.3 million, as well as an additional $2,512 each day in interest from October 1, 2007 until the date the award is paid. In July 2008, E-City commenced a proceeding in Mumbai, India seeking to prevent recognition of the ICC award in India. On March 10, 2017, the Supreme Court of India dismissed E-City’s petition. On March 29, 2017, the Company filed an Execution Application in the Bombay High Court seeking to enforce the ICC award against E-City and several related parties. On December 30, 2025, the Commercial Appellate Division of the Bombay High Court rejected E-City’s objections to enforcement of the arbitration award and recognized the award as a decree of the Court. The E-City parties appealed this decision to the Supreme Court of India. The Company fully intends to continue pursuing its rights and seeking to enforce the arbitration award. No amounts have been recognized in connection with this matter.

Financial Guarantees

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

Director and Officer Indemnifications

The Company’s by-laws contain an indemnification of its directors/officers, former directors/officers, and persons who have acted at its request to be a director/officer of an entity in which the Company is a shareholder or creditor, to indemnify them, to the extent permitted by the Canada Business Corporations Act, against expenses (including legal fees), judgments, fines and any amounts actually and reasonably incurred by them in connection with any action, suit or proceeding in which the directors and/or officers are sued as a result of their service, if they acted honestly and in good faith with a view to the best interests of the Company. In addition, the Company has entered into indemnification agreements with each of its directors in order to effectuate the foregoing. The nature of the indemnification prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counterparties. The Company has purchased directors’ and officers’ liability insurance. No amount has been accrued on the Company’s Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, with respect to this indemnity.

Other Indemnification Agreements

In the normal course of its operations, the Company provides indemnifications to counterparties in transactions such as: IMAX System lease and sale agreements and the supervision of installation or servicing of IMAX Systems; film production, exhibition and distribution agreements; real property lease agreements; and employment agreements. These indemnification agreements require the Company to compensate the counterparties for costs incurred as a result of litigation claims that may be suffered by the counterparty as a consequence of the transaction or the Company’s breach or non-performance under these agreements. While the terms of these indemnification agreements vary based upon the contract, they normally extend for the life of the agreements. A small number of agreements do not provide for any limit on the maximum potential amount of indemnification; however, virtually all of the IMAX System lease and sale agreements limit such maximum potential liability to the purchase price of the system. The fact that the maximum potential amount of indemnification required by the Company is not specified in some cases prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counterparties. Historically, the Company hasnot made any significant payments under such indemnifications and no amounts have been accrued in the Condensed Consolidated Financial Statements with respect to the contingent aspect of these indemnities.

8. Condensed Consolidated Statements of Operations – Supplemental Information

Selling Expenses

The following table summarizes the Company’s selling expenses, including sales commissions and marketing and other, which are recognized within Costs and Expenses Applicable to Revenues in the Condensed Consolidated Statements of Operations, for the three months ended March 31, 2026 and 2025:

Included in Selling, General and Administrative Expenses for the three months ended March 31, 2026 is a foreign currency net loss of $0.6 million (2025 — net loss of $0.4 million), resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities. (Refer to “Financial Instruments —Foreign Exchange Risk Management” in Note 15 for additional information.)

Collaborative Arrangements

Joint Revenue Sharing Arrangements

The accounting policy for the Company’s JRSAs is disclosed in Note 2 of the Company’s audited Consolidated Financial Statements in its 2025 Form 10-K.

Revenue attributable to transactions arising between the Company and its customers under JRSAs is recorded within Revenues — Technology Sales (for hybrid JRSAs) and Revenues — Technology Rentals (for traditional JRSAs). For the three months ended March 31, 2026, such revenues totaled $16.4 million (2025 — $19.2 million).

IMAX Film Remastering and Distribution

The Company earns revenue through the digital remastering of films and other content into IMAX formats for distribution to the IMAX network (“IMAX Film Remastering”). The accounting policy for IMAX Film Remastering and distribution arrangements is disclosed in Note 2 of the Company’s audited Consolidated Financial Statements in its 2025 Form 10-K.

Revenue attributable to transactions arising between the Company and its customers under IMAX Film Remastering and distribution arrangements is included in Revenues – Image Enhancement and Maintenance Services. For the three months ended March 31, 2026, such revenues totaled $29.2 million (2025 — $31.8 million). (Refer to “Revenue from Contracts with Customers —Disaggregated Information About Revenue” in Note 12 for a disaggregated presentation of the Company’s revenues.)

Co-Produced Film Arrangements

The accounting policies relating to co-produced film arrangements are disclosed in Notes 2 and 3 of the Company’s audited Consolidated Financial Statements in its 2025 Form 10-K.

As of March 31, 2026, the Company is party toone co-produced film arrangement, which represented the VIE total assets balanceof $1.8 million and liabilities balance of $0.4 million, andfour other co-produced film arrangements, the terms of which are similar.

For the three months ended March 31, 2026, an expense of $0.1 million (2025 — $0.1 million) attributable to transactions between the Company and other parties involved in the production of the films has been included in Costs and Expenses Applicable to Revenues ― Image Enhancement and Maintenance Services.

9. Condensed Consolidated Statements of Cash Flows – Supplemental Information

Changes in other operating assets and liabilities

Depreciation and amortization

Write-downs

Significant non-cash investing activities

10. Income Taxes

For the three months ended March 31, 2026, the Company recorded an income tax expense of $2.4 million (2025 — $7.3 million). The Company’s effective tax rate of 28.5% for the three months ended March 31, 2026 reflects the geographic allocation of income earned in taxing jurisdictions and reflects an increase in the valuation allowance and withholding taxes, offset by a tax benefit related to share-based compensation. The Company’s effective tax rate of 47.2% for the three months ended March 31, 2025 reflects the geographic allocation of income earned in taxing jurisdictions and also reflects an increase in the valuation allowance, withholding taxes and a tax benefit related to share-based compensation.

As of March 31, 2026, the Company’s Condensed Consolidated Balance Sheets included net deferred income tax assets of $12.7 million (December 31, 2025 — $12.6 million). Realization of net deferred tax assets is dependent upon generation of sufficient taxable income in future years to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

As of March 31, 2026, the Company’s Condensed Consolidated Balance Sheets also included deferred tax liabilities of $12.5 million (December 31, 2025 — $12.5 million) primarily related to foreign withholding taxes associated with the remaining balance of non-repatriated historical earnings that will not be indefinitely reinvested outside of Canada.

11. Capital Stock and Reserves

Share-Based Compensation

For the three months ended March 31, 2026, share-based compensation expense totaled $5.7 million (2025 — $5.2 million) and is reflected in the following accounts in the Condensed Consolidated Statements of Operations:

The following table summarizes the Company’s share-based compensation expense by each award type:

For the three months ended March 31, 2026, the Company’s share-based compensation expense included restricted share units to non-employees of $nil that were granted and have not yet vested (2025 — less than $0.1 million, which vested immediately upon granting).

Stock Option Summary

The following table summarizes the activity under the Company’s Stock Option Plan (“SOP”) for the three months ended March 31, 2026 and 2025:

Stock options are no longer granted under the SOP.

IMAX LTIP Restricted Share Units (“RSU”) Summary

The following table summarizes the activity in respect of RSUs issued under the IMAX Corporation Second Amended and Restated Long-Term Incentive Plan (as may be amended, “IMAX LTIP”) for the three months ended March 31, 2026 and 2025:

IMAX LTIP Performance Stock Units (“PSU”) Summary

The Company grantstwo types of PSU award, one which vests based on a combination of employee service and the achievement of certain Adjusted EBITDA targets and one which vests based on a combination of employee service and the achievement of total shareholder return (“TSR”) targets. The achievement of these targets is assessed over athree-year performance period, with vesting ranging from 0% to 200% of the initial Adjusted EBITDA PSU award or 200% of the initial TSR PSU award, depending upon actual performance.

For the 2026 grants, the grant date fair value for Adjusted EBITDA PSUs is determined using the volume-weighted average price of the Company’s common shares on the New York Stock Exchange for thesixty calendar days prior to the date of grant. The grant date fair value for TSR PSUs is determined using a Monte Carlo Model, influenced by share price and various assumptions, such as market conditions and expected share price volatility over the term of the awards.

The compensation expense attributable for each type of PSU is recognized on a straight-line basis over the requisite service period. If, as a result of management’s assessment, it is projected that a greater or lesser number of PSUs will vest than previously anticipated, a life-to-date adjustment to increase or decrease compensation expense is recorded in the period that such determination is made. The expense recognized in the three months ended March 31, 2026 and 2025 includes adjustments reflecting management’s estimate of the number of Adjusted EBITDA PSUs expected to vest.

The following table summarizes the activity in respect of PSUs issued under the IMAX LTIP for the three months ended March 31, 2026 and 2025:

As of March 31, 2026, the maximum number of common shares that may be issued with respect to PSUs outstanding was 1,797,285, assuming full achievement of the Adjusted EBITDA and TSR targets.

Issuer Purchases of Equity Securities

On June 12, 2017, the Company announced that its Board of Directors approved a $200.0 million share repurchase program for its common shares that would have expired on June 30, 2020, which was subsequently extended through June 30, 2026 and increased to a total share repurchase authority of $500.0 million under the current share repurchase program. As of March 31, 2026, the Company had $250.7 million available under the program. The repurchases may be made either in the open market or through private transactions, including repurchases made pursuant to a plan intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements, and other relevant factors. The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time.

During the three months ended March 31, 2026, and 2025, the Company didnot repurchase any common shares. During the three months ended March 31, 2026 and 2025, there wereno shares purchased in the administration of employee share based plans.

As of March 31, 2026 and December 31, 2025, the IMAX LTIP trustee did not hold any shares. Any shares held with the trustee are recorded at cost and are reported as a reduction against Capital Stock on the Company’s Condensed Consolidated Balance Sheets.

In 2024, IMAX China’s shareholders granted its Board of Directors a general mandate authorizing IMAX China’s Board of Directors, subject to applicable laws, to repurchase shares of IMAX China not to exceed 10% of the total number of issued shares as of June 7, 2024 (34,000,845 shares). This program expired on the date of the 2025 Annual General Meeting of IMAX China on June 12, 2025. During IMAX China’s 2025 Annual General Meeting, shareholders granted its Board of Directors a general mandate, subject to applicable laws, to repurchase shares of IMAX China not to exceed 10% of the total number of issued shares as of June 12, 2025 (33,919,122 shares). This program will be valid until the 2026 Annual General Meeting of IMAX China. The repurchases may be made in the open market or through other means permitted by applicable laws. IMAX China has no obligation to repurchase its shares and the share repurchase program may be suspended or discontinued by IMAX China at any time.

During the three months ended March 31, 2026 and 2025, IMAX China didnot repurchase any of its common shares.

Basic and Diluted Weighted Average Shares Outstanding

The following table reconciles the denominator of the basic and diluted weighted average share computations:

For the three months ended March 31, 2026, the calculation of diluted weighted average shares outstanding excludes 72,493 shares (2025 —971,374 shares) that are issuable upon the vesting or exercise of share-based compensation including: (i)nil RSUs (2025 —nil RSUs), (ii)72,493 PSUs (2025 —128,333 PSUs) and (iii)nil stock options (2025 —843,041 stock options), as the effect would be anti-dilutive.

The calculation of diluted weighted average shares outstanding for the three months ended March 31, 2026 and 2025 also excludes any shares potentially issuable upon the conversion of the Convertible Notes as the average market price of the Company’s common shares during the period of time they were outstanding was less than the conversion price of the Convertible Notes.

Statutory Surplus Reserve

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

The statutory surplus reserve of RMB 37.7 million ($5.8 million) has reached 50% of the Company’s PRC subsidiaries’ registered capital, and as such, no further contributions to the reserve are required.

12. Revenue from Contracts with Customers

Disaggregated Information About Revenue

The following tables summarize the Company’s Revenues by reportable segment and revenue stream type for the three months ended March 31, 2026 and 2025:

For the three months ended March 31, 2026, revenues earned from Technology Sales included variable consideration of $4.3 million (2025 — $3.2 million).

Deferred Revenue

IMAX System sale and lease arrangements include a requirement for the Company to provide maintenance services over the life of the arrangement, some of which maintenance services are subject to a consumer price index adjustment each year. In circumstances where customers prepay the entire term’s maintenance fee based on the original arrangement, additional payments are due to the Company for the years after its extended warranty and maintenance obligations expire. Payments, upon renewal each year, are either prepaid or made in arrears and can vary in frequency from monthly to annually. As of March 31, 2026, $21.4 million of consideration has been deferred in relation to outstanding maintenance services to be provided on existing maintenance contracts (December 31, 2025 — $28.3 million).

During the three months ended March 31, 2026, $8.8 million of revenue was recognized from the $50.4 million balance of deferred revenue as of December 31, 2025. During the three months ended March 31, 2025, $9.0 million of revenue was recognized from the $52.7 million balance of deferred revenue as of December 31, 2024.

13. Segment Reporting

The Company’s Chief Executive Officer (“CEO”) is its Chief Operating Decision Maker (“CODM”), as such term is defined under U.S. GAAP. The CODM assesses segment performance based on segment revenues and segment gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense, and income tax (expense) benefit are not allocated to the Company’s segments.

The accounting policies of thereportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies of the 2025 Form 10-K. Intercompany profit or loss is not included in the evaluation of performance and allocation of resources.

The following table presents the Company’s revenue and gross margin by reportable segment for the three months ended March 31, 2026 and 2025:

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

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

Geographic Information

Revenue by geographic area is based on the location of the customer. Revenue related to IMAX Film Remastering process is presented based upon the geographic location of the IMAX System that exhibits the remastered films. IMAX Film Remastering and distribution revenue is generated through contractual relationships with studios and other third parties that may not be in the same geographical location as the IMAX Systems that exhibit the remastered films.

The following table summarizes the Company’s revenues by geographic area for the three months ended March 31, 2026 and 2025:

The United States, Greater China (which includes the mainland of the People’s Republic of China, Hong Kong, Macau, and Taiwan), Asia (excluding Greater China), and Western Europe each comprise greater than 10% of the Company’s total revenues for the three months ended March 31, 2026. The United States, Greater China, and Asia each comprise greater than 10% of the Company’s total revenues for the three months ended March 31, 2025.

14. Employee’s Pension and Postretirement Benefits

Defined Benefit Plan

The Company has an unfunded defined benefit pension plan, the Supplemental Executive Retirement Plan (the “SERP”), covering its CEO, Richard L. Gelfond. Under the terms of his employment agreement, as amended, the total benefit payable to Mr. Gelfond under the SERP is fixed at $20.3 million.

As of March 31, 2026, the Company’s projected benefit obligation under the SERP was $17.7 million (December 31, 2025 — $17.5 million). For the three months ended March 31, 2026, the Company recorded interest costs of $0.2 million (2025 — $0.2 million) related to the SERP. The Company expects to recognize additional interest costs of $0.5 million related to the SERP during the remainder of 2026. No contributions are expected to be made to the SERP in 2026.

Postretirement Benefits – Executives

The Company has an unfunded postretirement plan for Mr. Gelfond and Bradley J. Wechsler, former Chairman of the Company’s Board of Directors (the “Executive Postretirement Benefit Plan”).

As of March 31, 2026, the Company’s postretirement benefits obligation under this plan is $0.5 million (December 31, 2025 — $0.5 million). For the three months ended March 31, 2026, the Company has recorded an expense of less than $0.1 million (2025 — less than $0.1 million) related to this plan.

Postretirement Benefits – Canadian Employees

The Company has an unfunded postretirement plan for its Canadian employees meeting specific eligibility requirements. The Company will provide eligible participants, upon retirement, with health and welfare benefits. As of March 31, 2026, the Company’s postretirement benefits obligation under this plan is $0.9 million (December 31, 2025 — $1.0 million). For the three months ended March 31, 2026, the Company has recorded expense of less than $0.1 million (2025 — less than $0.1 million) related to this plan.

Deferred Compensation Benefit Plan

The Company maintained a nonqualified deferred compensation benefit plan (the “Retirement Plan”) covering the former CEO of IMAX Entertainment and Senior Executive Vice President of the Company. Under the terms of the Retirement Plan, the benefits were due to vest in full if the executive incurred a separation from service from the Company (as defined therein).

As of March 31, 2026, the benefit obligation related to the Retirement Plan was $4.5 million (December 31, 2025 — $4.4 million) and is recorded on the Company’s Condensed Consolidated Balance Sheets within Accrued and Other Liabilities. As the Retirement Plan is fully vested, the benefit obligation is measured at the present value of the benefits expected to be paid in the future with the accretion of interest recognized in the Condensed Consolidated Statements of Operations within Retirement Benefits Non-Service Expense.

The Retirement Plan is funded by an investment in company-owned life insurance (“COLI”), which is recorded at its fair value on the Company’s Condensed Consolidated Balance Sheets within Prepaid Expenses. As of March 31, 2026, fair value of the COLI asset was $3.8 million (December 31, 2025 — $3.8 million). Gains and losses resulting from changes in the cash surrender value of the COLI asset are recognized in the Condensed Consolidated Statements of Operations within Realized and Unrealized Investment Gains.

15. Financial Instruments

Financial Instruments

The Company’s cash is invested with various major financial institutions. The Company’s $146.0 million balance of cash and cash equivalents as of March 31, 2026 (December 31, 2025 — $151.2 million) included $139.5 million in cash held outside of Canada (December 31, 2025 — $137.4 million), of which $101.0 million was held in the PRC (December 31, 2025 — $97.2 million).

Fair Value Measurements

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

Foreign Exchange Risk Management

The Company is exposed to market risk from changes in foreign currency rates.

A majority of the Company’s revenues are denominated in U.S. Dollars while a significant portion of its costs and expenses are denominated in Canadian Dollars. A portion of the Company’s net U.S. Dollar cash is converted to Canadian Dollars to fund Canadian Dollar expenses through the spot market. In China and Japan, the Company has ongoing operating expenses related to its operations in RMB, HKD and Japanese Yen, respectively. Net cash flows are converted to and from U.S. Dollars through the spot market. The Company also has cash receipts under leases denominated in RMB, Japanese Yen, Canadian Dollars and Euros which are converted to U.S. Dollars through the spot market. In addition, because IMAX films generate box office receipts in 91 different countries, unfavorable exchange rates between applicable local currencies and the U.S. Dollar could have an impact on box-office receipts and the Company’s revenues and results of operations. The Company’s policy is to not use any financial instruments for trading or other speculative purposes.

The Company has entered into a series of foreign currency forward contracts to manage the risks associated with the volatility of foreign currencies. Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continued to meet hedge effectiveness tests as of March 31, 2026 (the “Foreign Currency Hedges”), with settlement dates throughout 2026 and 2027. Foreign currency derivatives are recognized and measured on the Condensed Consolidated Balance Sheets at fair value. Changes in the fair value (i.e., gains or losses) are recognized in the Condensed Consolidated Statements of Operations except for derivatives designated and qualifying as foreign currency cash flow hedging instruments. The Company currently has cash flow hedging instruments associated with Selling, General and Administrative Expenses. For foreign currency cash flow hedging instruments related to Selling, General and Administrative Expenses, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in Accumulated Other Comprehensive Loss (“AOCI”) and reclassified to the Condensed Consolidated Statements of Operations when the forecasted transaction occurs. Any ineffective portion is recognized immediately in the Condensed Consolidated Statements of Operations.

The following tabular disclosures reflect the impact that derivative instruments and hedging activities have on the Company’s Condensed Consolidated Financial Statements:

Notional value of derivatives in foreign exchange contracts:

Fair value of derivatives in foreign exchange contracts:

Derivatives in foreign currency hedging relationships are as follows:

The Company’s estimated net amount of the existing gain as of March 31, 2026 is less than $0.1 million, which is expected to be reclassified to the Condensed Consolidated Statements of Operations within the next twelve months.

16. Non-Controlling Interests

IMAX China Non-Controlling Interest

As of March 31, 2026, the Company indirectly owned 71.57% of the outstanding equity interests in IMAX China, whose shares trade on the Hong Kong Stock Exchange (December 31, 2025 —71.57%). IMAX China remains a consolidated subsidiary of the Company. As of March 31, 2026, the balance of the Company’s non-controlling interest in IMAX China was $92.2 million (December 31, 2025 — $89.2 million). For the three months ended March 31, 2026, the net income attributable to the non-controlling interest in IMAX China was $1.8 million (2025 — $5.8 million).

17. Restructuring and Other Charges

In the three months ended March 31, 2026, the Company incurred $nil (2025 — $0.1 million) in Restructuring and other charges in the Condensed Consolidated Statements of Operations. In 2025, the charges were related to the assessment of the corporate structure and the resulting internal asset sale.

As of March 31, 2026, the Company’s liability was $0.6 million (December 31, 2025 — $1.4 million) on the Consolidated Balance Sheets within Accrued and other liabilities related to Restructuring and other charges.