IMAX plans consent solicitation for senior notes

By Jennifer Chiou

New York, March 29 - IMAX Corp. announced that it intends to seek consents from holders of its senior notes to provide it with additional time to file its 10-K annual report for 2006.

The Toronto-based motion picture technology company and theater operator said that it will have further delays with the annual report as well as the corresponding filings under Canadian provincial securities laws, pushing them beyond the March 31 deadline.

IMAX said it has already obtained a waiver under its bank credit agreement of the covenant to deliver its audited financial statements until June 30.

As previously announced, management and the audit committee of the board of directors are evaluating certain accounting errors over a six-year period.

As a result, IMAX said it expects to file restated financial statements for certain periods during those years.

After receiving comments from the Securities and Exchange Commission and the Ontario Securities Commission, the company said it will broaden its review, primarily in connection with its revenue recognition for certain theater system installations in previous periods, including the fourth quarter of 2005.

IMAX said that it and its auditors, Pricewaterhouse Coopers LLP, may determine that it is necessary to restate additional items beyond the previously identified errors.

The company added that it does not believe that a potential restatement resulting from changes to its revenue recognition accounting would have any impact on its previously reported or existing cash accounts.

IMAX noted that it cannot predict when it will complete this review and file its 10-K, adding that it does not believe its operations will be impacted by any delays in filing.

In addition, the company expects to receive a notice of delisting from Nasdaq as a result of the delayed filing.

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