IMAX provides status report in connection with delayed filing

IMAX provides status report in connection with delayed filing

TORONTO, July 5 /PRNewswire-FirstCall/ -- IMAX Corporation (NASDAQ:IMAX; TSX:IMX) today provided a status update pursuant to the alternative information guidelines of the Ontario Securities Commission ("OSC"). These guidelines contemplate that the Company will normally provide bi-weekly updates on its affairs until such time as the Company is current with its filing obligations under applicable Canadian provincial securities laws.

The Company reported that, with regard to its accounting review in connection with revenue recognition for the years 2002 through 2006, it has submitted a response to comments received from the staff of the U.S. Securities and Exchange Commission ("SEC"), and believes that it has substantially addressed these comments by revising its accounting policy with regard to revenue recognition for theatre systems and by committing to incorporate certain other changes in its financial statements and other disclosures in the 2006 Annual Report on Form 10-K ("10-K"). Accordingly, the Company plans to file both its 10-K and Report on Form 10-Q for the fiscal quarter ended March 31, 2007 ("10-Q") shortly.

The principal changes to the Company's revenue recognition policy with regard to theatre systems are to reflect: a) the treatment of the theatre system equipment (including the projector, sound system, screen and, if applicable, 3D glasses cleaning machine) and certain services associated with the theatre system equipment as a single deliverable and a single unit of accounting, and b) the requirement to have a signed customer acceptance prior to revenue recognition. These revisions will be treated as a correction of an error. The policy and the revisions will be discussed in greater detail in the Company's 10-K.

As previously reported, because the Company did not file its 10-K and 10-Q by June 30, 2007, it is in default of the reporting covenant under the indenture governing its 9 5/8% senior notes dues 2010 (the "Indenture"). The Company received notice of default on July 2, 2007. However, the Company expects to make such filings prior to August 1, 2007, the expiration of the thirty (30) day period (after notice of default) which allows for the cure of such default under the Indenture before holders can seek to accelerate the indebtedness.

On July 2, 2007, the Company announced that the Nasdaq Listing Qualifications Panel has granted the Company's request for continued listing of its shares on The Nasdaq Stock Market, subject to the condition that the Company file its 10-K, 10-Q and all required restatements on or before October 1, 2007.

Except as to the above, and those matters described in the Company's press releases of April 3, 2007, April 5, 2007, April 9, 2007, April 12, 2007, April 13, 2007, April 16, 2007, April 26, 2007, May 10, 2007, May 18, 2007, May 24, 2007, June 7, 2007, June 21, 2007, June 29, 2007 and July 2, 2007, there have been no material developments in the matters reported in the Company's press release "IMAX to Delay Filing of 2006 10-K" dated March 29, 2007. Management continues to be subject to a cease trade order imposed by Canadian provincial securities regulators.

The Company previously announced that it would delay the filing of its 10-K and 10-Q due to the discovery of certain accounting errors and has since broadened its accounting review to include certain other accounting matters based on comments received by the Company from the SEC and OSC.

The statements set forth in this press release are preliminary, reflect information currently known to the Company and are subject to change as a result of the accounting review and restatement process, subsequent events and the completion of the financial statements by management and the audit of the financial statements by the Company's independent auditors, PricewaterhouseCoopers, LLP.

The Company's next bi-weekly status update is expected to be released during the week of July 16, 2007.

About IMAX Corporation

IMAX Corporation is one of the world's leading entertainment technology companies, specializing in digital and film-based motion picture technologies. The worldwide IMAX(R) network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX theatres delivering the world's best cinematic presentations using proprietary IMAX, IMAX(R) 3D, and IMAX DMR(R) technology. IMAX DMR is the Company's groundbreaking digital remastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience(R). IMAX's renowned projectors display crystal-clear images on the world's biggest screens, and the IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of September 30, 2006, there were 280 IMAX theatres operating in 40 countries.

IMAX(R), IMAX(R) 3D, IMAX DMR(R), IMAX MPX(R) and The IMAX Experience(R)
are trademarks of IMAX Corporation. More information on the Company can
be found at www.imax.com.

This press release contains forward looking statements that are based on management assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include the outcome of the accounting review, discussions with the SEC and OSC, and related matters discussed in this press release, the timing of theatre system deliveries, the mix of theatre systems shipped, the timing of the recognition of revenues and expenses on film production and distribution agreements, the performance of films, the viability of new businesses and products, risks arising from potential material weaknesses in internal control over financial reporting, the extent and impact of the restatement of our financial statements and fluctuations in foreign currency and in the large format and general commercial exhibition market. These factors and other risks and uncertainties are discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2005.

Source: IMAX Corporation

CONTACT: Media: IMAX Corporation, New York, Sarah Gormley, (212)
821-0155, sgormley@imax.com; Business Media: Sloane & Company, New York, Whit
Clay, (212) 446-1864, wclay@sloanepr.com; Investors: Integrated Corporate
Relations, Amanda Mullin, (203) 682-8243, Amanda.Mullin@icrinc.com

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