Financial Performance - IMAX China recorded revenue of $124.3 million in 2019, representing a year-over-year growth of 5.8%[4] - Adjusted EBITDA for IMAX China was $68.8 million, with adjusted net income of $44.6 million[4] - IMAX China achieved a total box office revenue of $365.8 million in 2019, representing an 8.7% year-over-year growth, significantly outpacing the industry growth of 5%[8] - Total revenue for 2019 was $124.294 million, representing a 5.8% increase from $117.520 million in 2018[40] - Adjusted profit for 2019 was $44.570 million, a 0.6% increase from $44.283 million in 2018[40] - The company recorded a total sales cost of $47.647 million in 2019, which is 38.3% of total revenue, up from 36.0% in 2018[73] - Gross profit for the fiscal year 2019 was $76.647 million, with a gross margin of 61.7%, down from $75.251 million and 64.0% in 2018[74] - The total comprehensive income attributable to the company was $36.6 million in FY 2019, compared to $32.5 million in FY 2018, an increase of 12.9%[80] Box Office Performance - The box office for IMAX China reached $365.8 million, an increase of 8.7% compared to 2018, significantly outperforming the industry growth of 5%[4] - The film "Avengers: Endgame" set a record for IMAX China with a box office of $83.5 million, accounting for 13% of the film's total box office[4] - "The Wandering Earth" achieved a box office of $47.9 million, becoming the highest-grossing local language film for IMAX China[4] - The local language films accounted for 31% of IMAX China's total box office, with a year-over-year growth of 15%[4] - The Lunar New Year period in 2019 saw a 40% increase in box office revenue, largely due to the success of the film "The Wandering Earth," which grossed $47.9 million[8] - The average box office per screen in China was RMB 3,798, a slight decrease of 2.1% from RMB 3,881 in 2018[40] - In the fiscal year 2019, the average box office per screen for IMAX theaters in Greater China was $0.57 million, significantly higher than the average of $0.14 million for all screens in China[57] Theater Expansion and Technology - The number of theaters in operation increased to 717 by the end of 2019, with a same-store sales growth of 12%[4] - IMAX China signed contracts with 64 new theaters during the year, including a major expansion agreement for 40 theaters with a partner[3] - As of the end of 2019, 40 IMAX laser systems utilizing new technology had been adopted[3] - The company installed 95 new systems in 2019, including 56 revenue-sharing theaters and 12 IMAX laser upgrade systems, expanding its network to 717 theaters across 191 cities[9] - The number of IMAX theaters under revenue-sharing agreements increased from 410 as of December 31, 2018, to 463 as of December 31, 2019, indicating a growth in the network[57] - IMAX's cinema network in Greater China increased from 639 theaters on December 31, 2018, to 717 theaters on December 31, 2019[54] Revenue Segments - Network business revenue grew by 11.0% to $52.9 million, driven by the 8.7% increase in box office and a 30 basis point improvement in net sharing[12] - Cinema business revenue increased by 2.1% year-on-year to $71.0 million, driven by network expansion and two new hybrid installations[16] - The network business segment contributed $52.919 million (42.5% of total revenue) in 2019, up from $47.678 million (40.6%) in 2018[71] - The cinema business segment generated $71.033 million (57.2% of total revenue) in 2019, compared to $69.599 million (59.2%) in 2018, indicating a slight decline in percentage contribution[71] Market Share and Future Growth - The market share of IMAX China increased from 3.7% to 4.0%, with local language films contributing 31.4% to the total box office[8] - The company has a backlog of 253 theater contracts, including 58 full revenue-sharing theaters, indicating potential future growth[9] - IMAX China plans to continue expanding its market share in Hollywood films as its geographic coverage increases[8] - The company aims to enhance the number of Chinese films screened and increase annual revenue from these films[51] - IMAX has identified approximately 1,400 potential IMAX regions in Greater China for future expansion[55] Management and Governance - The company’s management team includes experienced professionals with extensive backgrounds in the entertainment and cinema industry[156] - The group focuses on expanding its market presence and enhancing its operational strategies through experienced board members[148][149][150][151][152][153] - The management team is committed to enhancing shareholder value through effective governance and strategic initiatives[148][149][150][151][152][153] Risks and Challenges - The company anticipates that the impact of the COVID-19 pandemic will significantly affect the first quarter of 2020, with uncertainty regarding the duration of theater closures[4] - The company faces risks from the Chinese real estate market, which may impact the demand for new IMAX theaters if growth slows[63] - The Chinese market is subject to various risks, including regulatory changes and economic downturns, which could significantly affect revenue and cash flow[65] Cash Flow and Capital Management - The net cash generated from operating activities for the fiscal year 2019 was approximately $39.3 million, a decrease of 30.2% from $56.4 million in 2018[119][120] - The company experienced a cash decrease of $30.9 million during the fiscal year 2019, contrasting with an increase of $3.5 million in 2018[119] - The company’s capital expenditures for fiscal year 2019 were $34.4 million, compared to $25.1 million in 2018, reflecting an increase in investment activities[128] Dividend and Shareholder Returns - The company proposed a final dividend of $0.02 per share, maintaining a payout ratio of 33%[14] - The company declared a final dividend of USD 0.02 per share, equivalent to approximately HKD 0.156 per share, for the fiscal year 2019[163] Strategic Agreements - IMAX Corporation agreed to a personnel secondment agreement with IMAX Shanghai Multimedia for a term of 25 years, ending on October 28, 2036[174] - The trademark licensing agreement grants IMAX Shanghai Multimedia exclusive rights to use the "IMAX" brand in China for a term of 25 years, which can be renewed[179] - The technology licensing agreement has a 25-year term, renewable based on fair market value licensing fees not exceeding 9% of total revenue[188]

[Financial and Operational Summary](index=5&type=section&id=Financial%20and%20Operational%20Summary) [Financial Summary](index=5&type=section&id=Financial%20Summary) H1 2019 revenue grew **15.1%** to **USD 59.3M**, profit rose **17.1%** to **USD 24M**, driven by strong box office Key Financial and Operational Indicators for H1 2019 | Indicator | H1 2019 (Unaudited) | H1 2018 (Unaudited) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | **Financial Data (USD Thousands)** | | | | | Total Revenue | 59,256 | 51,487 | +15.1% | | Gross Profit | 41,047 | 37,006 | +10.9% | | Profit for the Period | 23,965 | 20,465 | +17.1% | | Adjusted Profit | 24,894 | 21,251 | +17.1% | | Earnings Per Share (USD) | 0.07 | 0.06 | +16.7% | | **Operational Data** | | | | | Total Box Office Revenue (USD Thousands) | 235,959 | 189,579 | +24.5% | | Box Office Per Screen (USD Thousands) | 379 | 361 | +5.0% | | Total Cinema System Installations | 30 | 25 | +20.0% | | Total Network (Cinemas) | 662 | 569 | +16.3% | [2019 Outlook](index=5&type=section&id=2019%20Outlook) Expected **90-95 new cinema installations** in 2019; SG&A (ex-share compensation) projected flat - Expected new cinema installations for the full year 2019 are **90 to 95**[7](index=7&type=chunk) - Sales, general, and administrative expenses, excluding share-based compensation, are projected to remain largely consistent with 2018 levels[7](index=7&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) [Overview and Business Model](index=6&type=section&id=Overview%20and%20Business%20Model) Revenue from network (**56.9%**), cinema (**42.8%**), and new businesses in H1 2019 - Company revenue sources are categorized into network business (box office-related), cinema business (fixed income), and new business and others[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) H1 2019 Revenue Composition | Business Segment | H1 2019 Revenue (USD Thousands) | Percentage of Total Revenue | | :--- | :--- | :--- | | **Network Business** | **33,745** | **56.9%** | | - Film | 17,921 | 30.2% | | - Revenue Sharing Arrangement - Contingent Rent | 15,824 | 26.7% | | **Cinema Business** | **25,366** | **42.8%** | | - Sales and Sales-Type Leases | 10,364 | 17.5% | | - Revenue Sharing Arrangement - Upfront Fees | 3,537 | 6.0% | | - Cinema System Maintenance | 10,859 | 18.3% | | - Other Cinema | 606 | 1.0% | | **New Business and Others** | **145** | **0.2%** | | **Total** | **59,256** | **100.0%** | [Year-over-Year Comparison of Operating Results](index=11&type=section&id=Year-over-Year%20Comparison%20of%20Operating%20Results) H1 2019 revenue increased **15.1%** to **USD 59.3M**, gross profit rose **10.9%** to **USD 41M**, with gross margin at **69.3%** H1 2019 vs H1 2018 Performance Comparison | Indicator (USD Thousands) | H1 2019 | H1 2018 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 59,256 | 51,487 | +15.1% | | Gross Profit | 41,047 | 37,006 | +10.9% | | Operating Profit | 29,805 | 26,007 | +14.6% | | Profit for the Period Attributable to Owners of the Company | 23,965 | 20,465 | +17.1% | | Adjusted Profit | 24,880 | 21,251 | +17.1% | - Gross margin decreased from **71.9%** to **69.3%** year-over-year, primarily due to increased system cost mix from IMAX laser system installations[43](index=43&type=chunk) [Revenue Analysis](index=12&type=section&id=Revenue%20Analysis) Total revenue grew **15.1%**, primarily from **24.2%** network business revenue increase to **USD 33.7M** - Network business revenue increased by **24.2%** year-over-year, primarily due to a **24.5%** rise in box office revenue to **USD 236 million**[24](index=24&type=chunk)[25](index=25&type=chunk) - Cinema business revenue grew **4.7%** year-over-year, with upfront fees from hybrid revenue sharing arrangements significantly increasing by **246.1%** due to higher installations[28](index=28&type=chunk)[32](index=32&type=chunk) - Revenue from sales and sales-type lease arrangements decreased by **21.6%** year-over-year, attributed to a reduction of two system installations in the first half[31](index=31&type=chunk) [Cost of Sales and Gross Profit Analysis](index=15&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit%20Analysis) Cost of sales rose **25.7%** to **USD 18.2M**; network gross margin improved to **75.1%**, cinema declined to **61.5%** - Total cost of sales increased by **25.7%** year-over-year, mainly driven by a **USD 3.1 million** increase in cinema business costs[35](index=35&type=chunk) - Network business gross margin improved from **71.5%** to **75.1%**, primarily due to increased box office revenue and reduced one-time upfront costs[44](index=44&type=chunk) - Cinema business gross margin decreased from **72.5%** to **61.5%**, mainly due to higher maintenance and system sales costs from IMAX laser upgrades[47](index=47&type=chunk) [Operating Expenses and Profit Analysis](index=17&type=section&id=Operating%20Expenses%20and%20Profit%20Analysis) Profit for the period grew **17.1%** to **USD 24M**, as SG&A decreased **3.4%** to **USD 7.8M** and other operating expenses rose **17.9%** to **USD 3.4M** - Sales, general, and administrative expenses decreased by **3.4%** year-over-year, mainly due to lower legal and litigation fees and foreign exchange expenses[51](index=51&type=chunk) - Other operating expenses increased by **17.9%** year-over-year, primarily due to higher annual license fees payable to IMAX Corporation[52](index=52&type=chunk) - Total comprehensive income for the period was **USD 19 million**, a **5.6%** year-over-year increase, with a **USD 3.5 million** profit growth partially offset by a **USD 4.4 million** loss from fair value changes in financial assets[54](index=54&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) Net current assets decreased to **USD 110M** (from **USD 127M** end-2018), cash at **USD 97M**, funded by operating cash and **RMB 200M** credit facility Liquidity Position | Item (USD Thousands) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 96,980 | 120,224 | | Total Current Assets | 176,115 | 179,185 | | Total Current Liabilities | 66,091 | 52,020 | | **Net Current Assets** | **110,024** | **127,165** | - The company has an unsecured revolving credit facility of up to **RMB 200 million** to meet ongoing working capital requirements[70](index=70&type=chunk)[71](index=71&type=chunk) - Capital expenditures for fiscal year 2019 are estimated at approximately **USD 26.6 million**, primarily for expanding the IMAX cinema network under full revenue sharing arrangements[66](index=66&type=chunk) [Cash Flow Analysis](index=20&type=section&id=Cash%20Flow%20Analysis) H1 2019 net operating cash was **USD 17.1M**, investing used **USD 20.8M** (equity investment), financing used **USD 19.2M** (repurchases/dividends) Cash Flow Summary (USD Thousands) | Activity | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 17,125 | 17,801 | | Net Cash Used in Investing Activities | (20,803) | (4,295) | | Net Cash Used in Financing Activities | (19,247) | (13,860) | | **Decrease in Cash and Cash Equivalents for the Period** | **(23,244)** | **(76)** | - Cash outflow from investing activities significantly increased, primarily due to a **USD 15.2 million** equity securities investment in Maoyan Entertainment[62](index=62&type=chunk)[79](index=79&type=chunk) - Cash outflow from financing activities primarily included **USD 16.8 million** for share repurchases and **USD 2.3 million** for dividend payments[64](index=64&type=chunk) [Key Financial Ratios and Dividend Policy](index=24&type=section&id=Key%20Financial%20Ratios%20and%20Dividend%20Policy) Debt-to-capital ratio rose to **36.6%** (from **29.9%** end-2018), adjusted profit margin increased to **42.0%**, **USD 0.02/share** interim dividend recommended Key Financial Ratios | Ratio | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Debt-to-Capital Ratio | 36.6% | 29.9% | | **Ratio** | **H1 2019** | **H1 2018** | | Adjusted Profit Margin | 42.0% | 41.3% | - The Board recommended an interim dividend of **USD 0.02 per share** for the first half of the 2019 fiscal year[76](index=76&type=chunk)[78](index=78&type=chunk) [Significant Investments](index=25&type=section&id=Significant%20Investments) In Feb 2019, company invested **USD 15.2M** for **0.706%** stake in Maoyan Entertainment, and holds preferred shares in IMAX Hong Kong Holding for profit sharing - In February 2019, the company invested **USD 15.2 million** in Maoyan Entertainment, subscribing for **7,949,000 shares** (approximately **0.706%** equity interest)[79](index=79&type=chunk) [Corporate Governance Summary and Other Information](index=26&type=section&id=Corporate%20Governance%20Summary%20and%20Other%20Information) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) H1 2019, company repurchased **7,025,700** listed shares for **HKD 132M**, plus **122,901** shares for share option scheme H1 2019 Share Repurchase Details | Month | Number of Shares Repurchased | Highest Price Per Share (HKD) | Lowest Price Per Share (HKD) | Total Consideration Paid (HKD) | | :--- | :--- | :--- | :--- | :--- | | March 2019 | 709,800 | 19.84 | 19.04 | 13,863,730.52 | | May 2019 | 4,377,100 | 20.70 | 16.96 | 80,898,142.44 | | June 2019 | 1,938,800 | 19.56 | 18.30 | 36,870,693.79 | | **Total** | **7,025,700** | | | **131,632,566.75** | [Connected Transactions](index=29&type=section&id=Connected%20Transactions) Ongoing connected transactions with IMAX Corporation include equipment supply, technology/trademark licensing, DMR services, and personnel secondment - The company has multiple ongoing connected transactions with its controlling shareholder, IMAX Corporation, including personnel secondment, trademark licensing, technology licensing, DMR services, equipment supply, and master distribution agreements[91](index=91&type=chunk) H1 2019 Key Connected Transaction Amounts (USD Thousands) | Transaction Agreement | Counterparty | Transaction Amount | | :--- | :--- | :--- | | Equipment Supply Agreement | IMAX Corporation | 14,828 | | Master Distribution Agreement (DMR Fees Payable) | IMAX Corporation | 3,541 | | Master Distribution Agreement (Revenue Receivable) | IMAX Corporation | 16,291 | | Technology License Agreement | IMAX Corporation | 2,017 | | Trademark License Agreement | IMAX Corporation | 1,345 | | Personnel Secondment Agreement | IMAX Corporation | 596 | [Long-Term Incentive Plans](index=54&type=section&id=Long-Term%20Incentive%20Plans) Company operates share option and RSU schemes; as of June 30, 2019, **5.16M** pre-IPO options, **1.36M** post-IPO options, and **1.17M** RSUs unexercised/unvested - As of June 30, 2019, **5,163,800** share options under the pre-IPO plan remained unexercised[155](index=155&type=chunk)[156](index=156&type=chunk) - As of June 30, 2019, **1,359,544** share options under the post-IPO plan remained unexercised, with **417,764** new options granted during the period[162](index=162&type=chunk)[163](index=163&type=chunk) - As of June 30, 2019, **1,174,615** RSUs under the restricted share unit plan remained unvested, with **503,680** new RSUs granted during the period[168](index=168&type=chunk)[169](index=169&type=chunk) [Interim Financial Information](index=62&type=section&id=Interim%20Financial%20Information) [Condensed Consolidated Interim Statement of Comprehensive Income](index=63&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) H1 2019 total revenue was **USD 59.26M** (up **15.1%**), gross profit **USD 41.05M**, operating profit **USD 29.81M** (up **14.6%**), profit attributable to owners **USD 23.97M** (up **17.1%**) H1 2019 Statement of Comprehensive Income Summary (USD Thousands) | Item | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Revenue | 59,256 | 51,487 | | Gross Profit | 41,047 | 37,006 | | Operating Profit | 29,805 | 26,007 | | Profit Before Income Tax | 30,745 | 26,418 | | Profit for the Period Attributable to Owners of the Company | 23,965 | 20,465 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 18,979 | 18,037 | [Condensed Consolidated Interim Statement of Financial Position](index=64&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2019, total assets were **USD 342M**, total liabilities **USD 91.6M**, total equity **USD 250M**, with non-current assets including PPE (**USD 105M**) and finance receivables (**USD 40.14M**) Statement of Financial Position Summary (USD Thousands) | Item | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Non-Current Assets | 165,721 | 150,158 | | Current Assets | 176,115 | 179,185 | | **Total Assets** | **341,836** | **329,343** | | **Liabilities and Equity** | | | | Total Liabilities | 91,600 | 75,666 | | Total Equity | 250,236 | 253,677 | | **Total Equity and Liabilities** | **341,836** | **329,343** | [Condensed Consolidated Interim Statement of Cash Flows](index=66&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) H1 2019 net operating cash was **USD 17.13M**, investing used **USD 20.80M**, financing used **USD 19.25M**, resulting in a **USD 23.24M** net cash decrease Cash Flow Statement Summary (USD Thousands) | Item | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 17,125 | 17,801 | | Net Cash Used in Investing Activities | (20,803) | (4,295) | | Net Cash Used in Financing Activities | (19,247) | (13,860) | | Decrease in Cash and Cash Equivalents for the Period | (23,244) | (76) | | Cash and Cash Equivalents at End of Period | 96,980 | 116,602 |

Box Office Performance - Total box office revenue for IMAX China increased by 16% to $336.6 million in 2018, setting a new record[7]. - The company screened 45 films in mainland China, including 19 Chinese films, with Chinese films accounting for 30% of total box office revenue, up from 24% in 2017[4]. - IMAX China achieved a 40% increase in box office during the 2019 Chinese New Year compared to the same period in 2018, while the industry remained flat[3]. - The film "The Wandering Earth" generated $45 million in IMAX box office, becoming the highest-grossing IMAX film in China[3]. - IMAX's box office share during the Chinese New Year for "The Wandering Earth" was 11% on the first day, and 8% of the total box office for the film as of February 26, 2019[3]. - Total box office revenue reached $336.63 million, up from $290.82 million in 2017, with box office per screen at $616[38]. - In fiscal year 2018, IMAX format Chinese films accounted for 30.0% of the company's box office in China, up from 24.1% in fiscal year 2017[56]. - The share of Chinese films in China's total box office was 62.0% in fiscal year 2018, compared to 54.0% in fiscal year 2017[56]. - The average box office per screen for IMAX theaters in Greater China was $0.62 million, significantly higher than the average of $0.15 million for all screens in China[55]. Revenue and Financial Performance - Total revenue for 2018 was $117.52 million, down from $126.47 million in 2017, with a gross profit of $75.25 million and a gross margin of 64%[38]. - Adjusted profit for 2018 was $44.28 million, with an adjusted profit margin of 37.7%, reflecting a 140 basis point increase[38]. - Network business revenue increased to $47.7 million, benefiting from a 16% growth in box office revenue, with a gross margin improvement of 920 basis points[12]. - The average revenue per cinema system rose to $1.4 million, although overall cinema business revenue decreased due to 14 new installations in 2017[15]. - The company returned $27 million to shareholders through dividends and share buybacks in 2018[5]. - The company reported a pre-tax profit of $54.0 million for the fiscal year 2018, compared to $55.8 million in 2017[121]. - Total comprehensive income attributable to the company’s owners decreased from $52.0 million in FY2017 to $32.5 million in FY2018[77]. - Adjusted profit decreased from $45.9 million in FY2017 to $44.3 million in FY2018, a reduction of 3.6%[116]. - The company’s cash and cash equivalents balance as of December 31, 2018, was $120.2 million, compared to $116.7 million at the end of 2017, reflecting an increase of $3.5 million[120]. Expansion and Network Development - IMAX installed 101 systems in 2018, including 70 revenue-sharing theaters and 11 IMAX laser systems, expanding its network to 639 theaters across 185 cities[11]. - The company plans to install approximately 90 to 95 new cinemas in 2019, maintaining a similar installation pace as the previous year[39]. - IMAX has 639 theaters in Greater China as of December 31, 2018, with 624 located in commercial areas and an additional 272 theaters under contract[43]. - The number of IMAX theaters increased from 544 in FY2017 to 639 in FY2018, representing a growth of 17.5%[83]. - The company aims to increase the number of Chinese films screened and the annual revenue generated from these films[49]. - IMAX plans to continue expanding its network in first, second, third, and fourth tier cities, with a focus on identifying new IMAX theater locations[54]. - The company has established approximately 1,260 identified IMAX regions in Greater China, allowing for potential new theater openings without negatively impacting existing theaters[53]. Strategic Partnerships and Investments - IMAX's marketing efforts included a $15 million investment in Maoyan, China's largest ticketing platform, which accounts for approximately 60% of all movie ticket sales in China[5]. - The company is investing in a film fund focused on Chinese-language blockbusters to strengthen ties with local filmmakers[45]. - IMAX has a long-term partnership with local production houses to enhance its film offerings and adapt to market changes[45]. - The company continues to leverage its unique relationships with Hollywood studios to secure a diverse range of film content[48]. - IMAX's revenue-sharing arrangements include comprehensive and hybrid models, allowing partners to expand their IMAX networks with reduced upfront costs[44]. Cost Management and Profitability - The company maintained a strong cost control strategy, as evidenced by a 280 basis point increase in gross profit margin[17]. - Selling, general, and administrative expenses totaled $16.11 million, representing 13.7% of total revenue, up from 11.5% in 2017[72]. - The company incurred restructuring expenses of $0.1 million in 2018, a decrease from $0.6 million in 2017, as part of its cost reduction plan[73]. - The cost of sales for the fiscal year 2018 was $42.27 million, which is 36.0% of total revenue, compared to $49.12 million or 38.8% in 2017[70]. - The company emphasizes the importance of a balanced mix of Hollywood and Chinese films to ensure box office success[55]. Management and Governance - The senior management team includes CEO Chen Jiande, CFO and COO Jim Athanasopoulos, and CMO Zhou Meihui, among others[153]. - Megan Colligan has been appointed as a non-executive director since February 2019, bringing extensive experience from Paramount Pictures and IMAX Corporation[148]. - The company is focused on providing strategic advice and guidance through its board members with diverse backgrounds in media and finance[153]. - The management team is committed to expanding the company's market presence and enhancing operational efficiency[153]. - The board includes members with significant experience in the entertainment and investment sectors, which supports the company's strategic initiatives[153]. Risks and Challenges - The company faces risks from fluctuations in the real estate market, which could negatively impact the demand for new IMAX theaters[61]. - The ability to maintain pricing and profit margins is crucial, as a significant portion of operating costs are fixed, particularly related to network business[62]. - The company does not currently hedge against currency fluctuations, which could adversely affect profitability if the USD/CNY exchange rate rises significantly[63]. - The company's operations are seasonal, with higher profitability typically seen in the second half of the year due to installations before the Chinese New Year[63]. Agreements and Licensing - IMAX Corporation agreed to a personnel secondment agreement with IMAX Shanghai Multimedia for a term of 25 years, effective from August 11, 2011, to October 28, 2036[173]. - The trademark licensing agreement grants IMAX Shanghai Multimedia exclusive rights to use the "IMAX" brand in China for a term of 25 years, effective from October 28, 2011, with an option to renew[178]. - The technical licensing agreement requires IMAX Shanghai Multimedia and IMAX Hong Kong to pay a quarterly fee of 3% of total revenue from cinema and film operations during the initial 25-year term[190]. - The DMR service agreement has a term of 25 years, effective from October 28, 2011, with an option for renewal for an additional 25 years[196]. - The agreements are critical to the business, and shorter terms are deemed not in the shareholders' best interests[183].