IMAX CORPIMAX
IMAX CORP Debt Disclosure
13. Borrowings
Revolving Credit Facility Borrowings, Net
As of December 31, 2025 and 2024, Revolving Credit Facility Borrowings, Net included the following:
| December 31, | December 31, | ||||||||||
(In thousands of U.S. Dollars) | 2025 | 2024 | |||||||||
Wells Fargo Credit Facility borrowings | $ | 37,000 | $ | 37,000 | |||||||
Unamortized debt issuance costs | (2,423) | (644) | |||||||||
Revolving Credit Facility Borrowings, net | $ | 34,577 | $ | 36,356 | |||||||
Wells Fargo Credit Agreement
The Company was a party to a Sixth Amended and Restated Credit Agreement, dated March 25, 2022 (the “Credit Agreement”), that provided for a credit facility (the “Credit Facility”). On July 14, 2025, the Company entered into a Seventh Amended and Restated Credit Agreement (the “New Credit Agreement”) with Wells Fargo Bank, National Association, as agent, and a syndicate of lenders party thereto. The facility under the New Credit Agreement (the “New Credit Facility”) matures on July 14, 2030. The Company’s obligations under the New Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the “Guarantors”), and are secured by first-priority security interests in substantially all of the assets of the Company and the Guarantors.
The New Credit Agreement provides for a revolving borrowing capacity of $375.0 million, and contains an uncommitted accordion feature that allows the Company to further increase its borrowing capacity by the greater of $140.0 million, or by the Company’s EBITDA (as defined in the Credit Agreement) (“Adjusted EBITDA per Credit Facility”) for the sum of the four most recently ended fiscal quarters, subject to certain conditions, depending on the mix of revolving loans and/or term loans under the incremental facility and subject to conditions set forth in the Credit Agreement.
The New Credit Agreement requires that the Company does not exceed a maximum Senior Secured Net Leverage Ratio (as defined therein) of 3.25:1.00 which may be increased under certain circumstances and is tested on the last day of each fiscal quarter. The Company was in compliance with this requirement as of December 31, 2025 as the Senior Secured Net Leverage Ratio was 0.00:1.00.
Loans under the New Credit Facility bear interest, at the Company’s option, at (i) Term Secure Overnight Financing Rate (“Term SOFR”), Eurocurrency Rate, or Canadian Dollar Offered Rate (“CDOR”) plus a margin ranging from 1.00% to 1.75% per annum; or (ii) the U.S. 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 CDOR be less than 0.00% per annum.
As of December 31, 2025, borrowings under the Credit Facility were $37.0 million (December 31, 2024 — $37.0 million) and bore interest at Term SOFR, plus a margin up to 1.50% per annum (December 31, 2024 — 1.75%) based on the Company’s total leverage ratio. The effective interest rate for the year ended December 31, 2025 was 6.07% (2024 — 6.96%).
The New Credit Agreement contains customary affirmative and negative covenants for a transaction of this type, including covenants that limit indebtedness, liens, asset sales, investments, and restricted payments, in each case, subject to negotiated exceptions and baskets. The New Credit Agreement also contains customary representations, warranties, and event of default provisions for a transaction of this type.
The Company incurred fees of approximately $2.2 million in connection with the New Credit Agreement, which are being amortized on a straight-line basis over the term of the New Credit Agreement.
As of December 31, 2025 and 2024, the Company had no letters of credit or advance payment guarantees outstanding under the New Credit Facility.
As of December 31, 2025, the amount available for future borrowings under the New Credit Facility was $338.0 million (2024 — $263.0 million under the previous Credit Facility).
Foreign Exchange Facility
Within the New Credit Facility, the Company is able to purchase foreign currency forward contracts and/or other swap arrangements. As of December 31, 2025, the net unrealized gain on the Company’s outstanding foreign currency forward contracts was $1.0 million, representing the amount by which the fair value of these forward contracts exceeded their nominal value (2024 — net unrealized loss of $2.0 million; 2023 — net unrealized gain of $0.8 million). As of December 31, 2025, the notional value of the Company’s outstanding foreign currency forward contracts was $48.4 million (December 31, 2024 — $48.4 million).
Bank of China Facility
In June 2022, IMAX (Shanghai) Multimedia Technology Co., Ltd. (“IMAX Shanghai”), one of the Company’s majority-owned subsidiaries in China, renewed its unsecured revolving facility with Bank of China for up to 200.0 million Chinese Renminbi (“RMB”) ($28.5 million), including RMB 10.0 million ($1.4 million) for letters of guarantee, to fund ongoing working capital requirements (the “Bank of China Facility”). The Bank of China Facility has been renewed to March 20, 2026.
As of December 31, 2025, no borrowings were outstanding under the Bank of China Facility and outstanding letters of guarantee were RMB 1.0 million ($0.1 million).
As of December 31, 2025, the amount available for future borrowings under the Bank of China Facility was RMB 190.0 million ($27.1 million) and the amount available for letters of guarantee was RMB 9.0 million ($1.3 million). 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 year ended December 31, 2025 was 0% (2024 — 0%). There were no amounts drawn under the Bank of China Facility during the year ended December 31, 2025.
HSBC China Facility
In June 2022, IMAX Shanghai entered into an unsecured revolving facility for up to RMB 200.0 million ($28.5 million) with HSBC Bank (China) Company Limited, Shanghai Branch to fund ongoing working capital requirements (the “HSBC China Facility”). As of December 31, 2025 and 2024, no borrowings were outstanding under the HSBC China facility. As of December 31, 2025, the amount available for future borrowings under the HSBC China Facility was RMB 200.0 million ($28.5 million). The effective interest rate for the year ended December 31, 2025 was 0% (2024 — 0%). There were no amounts drawn under the HSBC China Facility during the year ended December 31, 2025.
NBC Facility
In October 2019, the Company entered into a $5.0 million facility with National Bank of Canada (the “NBC Facility”) fully insured by Export Development Canada for use solely in conjunction with the issuance of performance guarantees and letters of credit. In October 2025, the NBC Facility was renewed to October 8, 2026. The NBC Facility is renewable on the same terms and conditions on an annual basis. The Company did not have any letters of credit or advance payment guarantees outstanding as of December 31, 2025 and 2024 under this facility.
Convertible Notes and Other Borrowings, Net
As of December 31, 2025 and December 31, 2024, Convertible Notes and Other Borrowings, Net included the following:
| December 31, | December 31, | ||||||||||
(In thousands of U.S. Dollars) | 2025 | 2024 | |||||||||
Convertible Notes | $ | 250,743 | $ | 230,000 | |||||||
Unamortized discounts and debt issuance costs | (7,636) | (1,864) | |||||||||
Convertible Notes, net | 243,107 | 228,136 | |||||||||
Federal Economic Development Loan | 1,027 | 2,056 | |||||||||
Unaccreted interest benefit | (100) | (291) | |||||||||
Federal Economic Development Loan, net | 927 | 1,765 | |||||||||
Convertible Notes and Other Borrowings, net | $ | 244,034 | $ | 229,901 | |||||||
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 a private placement conducted pursuant to Rule 144A under the Securities Act of 1933, as amended.
The 2026 Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.500% per annum on the principal of $230.0 million, payable semi-annually in arrears on April 1 and October 1 of each year. The 2026 Convertible Notes will mature on April 1, 2026, unless redeemed or repurchased by the Company or converted on an earlier date.
On November 6, 2025, the Company completed the repurchase of $229.3 million (or 99.7%) of the outstanding principal amount of the 2026 Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of holders for an aggregate repurchase price of approximately $275.5 million, which included accrued and unpaid interest of $0.1 million. The repurchase was funded by the issuance of new notes, as described below under “2030 Convertible Notes” and borrowings under the Company’s New Credit Facility. The Company accounted for the notes repurchase as induced conversions and recognized a $31.5 million charge to Other Equity and $15.3 million of fair value, representing the consideration paid to holders of the 2026 Convertible Notes in excess of the value to which they were entitled to receive pursuant to the original conversion terms, was recorded within Induced conversion expense on settlement of convertible notes in the Company’s Consolidated Statements of Operations.
From and after January 1, 2026, holders of the remaining outstanding 2026 Convertible Notes may convert their 2026 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Effective January 1, 2026, the Company made an irrevocable election to settle the principal portion and any applicable conversion premiums of the 2026 Convertible Notes only in cash.
In connection with the pricing of the 2026 Convertible Notes, the Company entered into privately negotiated capped call transactions (the “2026 Capped Call Transactions”) with certain financial institutions to reduce potential dilution in connection with the redemption of the 2026 Convertible Notes. In connection with the repurchase of the 2026 Convertible Notes, the Company received $30.7 million in cash in connection with settling certain 2026 Capped Call Transactions. As the Capped Call Transactions were classified as equity, the proceeds from settlement of these Capped Calls were recorded to Other Equity within Shareholders’ Equity in the Company’s Consolidated Statements of Shareholders’ Equity and on the Consolidated Balance Sheets. The remaining outstanding 2026 Capped Call Transactions will expire on April 1, 2026 unless exercised earlier.
2030 Convertible Notes
On November 6, 2025, the Company issued $250.0 million of 0.750% Convertible Senior Notes due 2030 (the “2030 Convertible Notes”) in a private placement conducted pursuant to Rue 144A under the Securities Act of 1933, as amended. The net proceeds from the issuance of the 2030 Convertible Notes were $243.1 million, after deducting the initial purchasers’ discounts and commissions.
The 2030 Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.750% per annum on the principal of $250.0 million, payable semi-annually in arrears on May 15 and November 15 of each year. The 2030 Convertible Notes will mature on November 15, 2030, unless they are redeemed or repurchased by the Company or converted on an earlier date.
Holders may convert their notes at their option in the following circumstances:
•during any calendar quarter commencing after the calendar quarter ending on March 31, 2026 (and only during such calendar quarter), if the last reported sale price per common share of the Company, no par value (“common shares”), exceeds 130% of
the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
•during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per common share on such trading day and the conversion rate on such trading day;
•upon the occurrence of certain corporate events or distributions on the common shares, as provided in the Indenture;
•if the Company calls such notes for redemption; and
•at any time from, and including, August 15, 2030 until the close of business on the second scheduled trading day immediately before the maturity date.
Upon conversion, the Company will pay or deliver, as applicable, cash or a combination of cash and common shares, at its election, based on the applicable conversion rates. The initial conversion rate is 23.5743 common shares per $1,000 principal amount of 2030 Convertible Notes, which represents an initial conversion price of approximately $42.42 per common share, and is subject to adjustment upon the occurrence of certain events.
In addition, upon the occurrence of a “fundamental change” (as defined below), holders may require the Company to repurchase their 2030 Convertible Notes at a cash repurchase price equal to the principal amount of the 2030 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any. Subject to the terms and conditions of the indenture governing the 2030 Convertible Notes, a “fundamental change” means, among other things, an event resulting in (i) a change of control, (ii) a transfer of all or substantially all of the assets of the Company, (iii) a merger, (iv) liquidation or dissolution of the Company, or (v) delisting of the Company’s common shares from a national securities exchange.
In connection with the pricing of the 2030 Convertible Notes, the Company entered into privately negotiated capped call transactions (the “2030 Capped Call Transactions”) with certain financial institutions. The 2030 Capped Call Transactions are expected to reduce potential dilution resulting from the common shares the Company is required to issue and/or to offset any potential cash payments the Company is required to make in excess of the principal amount of the 2030 Convertible Notes in the event that the market price per share of the Company’s common shares is greater than the strike price of the Capped Call Transactions with such reduction and/or offset subject to a cap. The 2030 Capped Call Transactions have an initial cap price of $57.1025 per share of the Company’s common shares, which represents a premium of 75% over the last reported sale price of the common shares when they were priced on November 3, 2025, and are subject to certain adjustments under the terms of the 2030 Capped Call Transactions. Collectively, the 2030 Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2030 Convertible Notes, the number of the Company’s common shares underlying the 2030 Convertible Notes. The cost of the 2030 Capped Call Transactions was approximately $21.9 million, recorded to Other Equity within Shareholders’ Equity in the Company’s Consolidated Statements of Shareholders’ Equity and on the Consolidated Balance Sheets.
The 2026 Convertible Notes and the 2030 Convertible Notes are together referred to as the “Convertible Notes”. The 2026 Capped Call Transactions and the 2030 Capped Call Transactions are together referred to as the “Capped Call Transactions”.
The Capped Call Transactions are separate transactions, are not part of the terms of the Convertible Notes and will not affect any holder’s rights under the Convertible Notes. Holders of the Convertible Notes will not have any rights with respect to the Capped Call Transactions.
The Capped Call Transactions meet all of the applicable criteria for equity classification in accordance with ASC 815-10-15-74(a), “Derivatives and Hedging — Embedded Derivatives — Certain Contracts Involving an Entity’s Own Equity,” and, as a result, the related cost was recorded as a reduction to Other Equity within Shareholders’ Equity in the Company’s Consolidated Statements of Shareholders’ Equity and on the Consolidated Balance Sheets.
The Company continues to record the Convertible Notes entirely as a liability on the Consolidated Balance Sheets, net of initial purchasers’ discounts and commissions and other debt issuance costs, with interest expense reflecting the cash coupon plus the amortization of the discounts and capitalized costs. Additionally, under the “if-converted” method, because the principal amount of the Convertible Notes is settled in cash and the conversion spread is settleable in the Company’s common shares, diluted earnings per share is calculated by including the net number of incremental shares that would be issued upon conversion of the Convertible Notes, using the average market price during the period. Accordingly, the application of the “if-converted” method may reduce the Company’s reported diluted earnings per share.
Federal Economic Development Loan
The Company’s wholly-owned subsidiary, SSIMWAVE Inc., entered into a contribution agreement with the Federal Economic Development Agency for Southern Ontario (the “Federal Economic Development Loan”) on May 29, 2019, under which SSIMWAVE Inc. received $4.2 million Canadian Dollars ($3.2 million) by way of repayable contributions toward certain eligible projects costs. The contributions under the agreement covered 35% of the eligible and supported costs of SSIMWAVE Inc. between January 10, 2019 and December 31, 2022. The contributions were repayable over 60 months, with repayments beginning in January 2024 and an annual interest rate of 0%.
On January 1, 2024, SSIMWAVE Inc. was amalgamated into the Company. On January 4, 2024, the Federal Economic Development Loan was assigned to the Company with an amendment to the repayment term. The contributions under the assigned agreement are repayable over 36 months beginning January 2024, with an annual interest rate of 0%.
The benefit of the interest-free loan has been determined by calculating the present value of the payments using a market-based interest rate and comparing this to the proceeds received. The benefit is recorded as the interest-free benefit of government funding within Interest Income in the Company’s Consolidated Statements of Operations. The obligation is being accreted to its maturity amount, resulting in an interest accretion expense of $0.2 million in 2025 (2024 — $0.3 million; 2023 — $0.5 million) which is being recorded within Interest Expense in the Company’s Consolidated Statements of Operations.
As of December 31, 2025, the Federal Economic Development Loan had a carrying value of $0.9 million, net of unaccreted interest benefit and was recorded within Convertible Notes and Other Borrowings, Net on the Company’s Consolidated Balance Sheets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.