RDI 10-K & 10-Q changes, risk factors and insider trading

We are dependent upon third parties to supply the entertainment product we need for our cinemas and live theatres to attract customers. We do not produce the films we show at our cinemas and, generally speaking, we do not produce the plays that are performed at our live theatres. Film distributors have no obligation to supply us with film and producers have no obligation to make use of our live theatres. Any disruption in the production of these films (including by reason of a strike) could hurt our business and results of operations. The Hollywood strikes in 2023 halted production of films for several months,months didand, delaydelayed or otherwise affectaffected the supply of certain films. The disruption in film production may also cause delays for currently scheduled film release dates. It is difficult to anticipate the scope and timing of such delays.delays It is difficult to predictor the full extent of the adverse impact of the strikes, and potential future strikes on our business and results of operations in future reporting periods.

We operate in a highly competitive environment with many competitors who are significantly larger and may have significantly better access to films and to funds than we do. We are a comparatively small cinema operator and face competition from much larger exhibitors who are able to offer distributors more screens in more markets – including markets where they may be the exclusive exhibitor – than can we. This may adversely impact our access to films,content, which may adversely affect our revenue and profitability. These larger competitors may also enjoy (i) greater cash flow, which can be used to develop additional cinemas, including cinemas that may be competitive with our existing cinemas, (ii) better access to equity capital and debt, (iii) better visibility to landlords and real estate developers, (iv) for the sake of building volume, to operate cinemas with margins below our threshold for cinema acquisitions and/or development, and (v) better economies of scale. Access to reasonably priced funding is increasingly important as cinema operators need to upgrade their presentation and food and beverage in order to compete with in-home entertainment options.

We face competition from competitors offering food and beverage and luxury seating as an integral part of their cinema offerings. The number of our competitors offering expanded food and beverage menus (including the sale of alcoholic beverages) and luxury seating, has continued to grow in recent periods. In addition, more competitors such as AMC are converting existing cinemas to provide such expanded menu offerings and in-theater dining options. The existence of such cinemas may alter traditional cinema selection practices of moviegoers, as they seek out cinemas with such expanded offerings as a preferred alternative to traditional cinemas. In order to compete with these new cinemas, the Company has been required to materially increase its capital expenditures to add such features to many of our cinemas and to take on additional and more highly trained (and, consequently, compensated) staff. Also, the conversion to luxury seating typically requires a material reduction in the number of seats that an auditorium can accommodate which may translate into fewer movie tickets being sold and the shutdown (or limitation of activities) during the time required to complete such modifications.

We are subject to a variety of litigation risks. The legal landscape in which we do business is subject to rapid change due to legislative enactments at the federal, state and local levels. Often these requirements are not stated in a uniform manner, and may vary, in intent or as the result of judicial determination, from jurisdiction to jurisdiction. Many have material periodic penalties for non-compliance and allow (or have been interpreted to allow) private litigants to challenge whether such laws have been violated. As a consequence, we find that our vulnerability to forced settlements, litigation exposure and cost of liability insurance generally are substantially higher in the United States (and in particular in states such as California) than in Australia and New Zealand. The defense of such suits, even if successful, can be very costly due ,to, among other things, to the cost of electronic discovery.

Our real estate business suffered effects from the coronavirus outbreak from which it has not fully recovered. The COVID-19 pandemic resulted in the closure or reduced capacity of certain of our retail tenants. All of our ETCs are anchored by our cinemas, which suffered temporary closures and/or reductions in seating capacities during the COVID-19 Pandemic, thereby reducing foot traffic to our ETCs. InDuring somethe cases,COVID-19 pandemic period, we have beenwere compelled to provide ourcertain tenants with rent abatements or deferrals and some tenants continue to be impacted.deferrals.

Competition from the Digital Economy may adversely impact our ability to lease and obtain reasonable rents for our properties. An increasing amount of shopping is being done online, a trend that haswas been given momentumsupported by the stay-at-home admonitions and restrictions associated with our previous battle against the COVID virus. This has adversely impacted retail tenants (particularly those dealing in consumer goods), which may impact our ability to attract such retailers and to obtain rents at historic levels. This is a particular risk to us, given our high percentage of retail tenants. Also, initially motivated by the need to work from home during the COVID-19 pandemic, employers are rethinking the scope and extent of the need for their office space. Some markets may have become overbuilt, which may complicate our ability to lease our properties, to obtain reasonable rents, and to finance future development.

Many of our Properties are located in areas prone to natural disasters. Many of our properties are located in areas subject to a risk of fires such as California and Australia; of hurricanes, tropical storms and/or flooding, such as Australia, California, Hawaii and New York, New Jersey; or earthquakes in New Zealand, Hawaii and California. The availability of insurance for natural disasters (particularly in the event of an earthquake) may be limited.

Risk of Reliance on Appraisals. In our business planning and forecastsforecasts, we rely on independent third-party appraisals as to the value of our real estate holdings. Such appraisals are inherently subjective, and a reasonable appraiser can reach significantly different views as to fair market value of a given parcel of real property. Valuations of historic railroad properties can be impacted by uncertainties as to title and property line boundaries. Accordingly, no assurances can be given that the fair market value assigned to a parcel of real property can be achieved in the open market. Further, USPAP methodology is inherently backwards looking and, as a result, can overstate value in times of declining real estate values and understate value in raising markets.

The construction of the project on time and on budget. Construction risks include the availability and cost of financing; the availability and costs of material and labor; the costs of dealing with unknown site conditions (including addressing pollution or environmental wastes deposited upon the property by prior owners); inclement weather conditions; and the ever-present potential for labor-related disruptions.disruptions or disputes.

The ownership of properties involves risk. The ownership of properties involves risks, such as: (i) ongoing leasing and re-leasing risks, (ii) ongoing financing and re-financing risks, (iii) market risks as to the multiples offered by buyers of investment properties, (iv) risks related to the ongoing compliance with changing governmental regulation (including, without limitation, laws and regulations related to access, energy conservation and environmental matters), (v) relative illiquidity compared to some other types of assets, and (vi) susceptibility of assets to uninsurable risks, such as biological, chemical or nuclear terrorism, or risks that are subject to caps tied to the concentration of such assets in certain geographic areas, such as earthquakes. Furthermore, as our properties are typically developed around an entertainment use, the attractiveness of these properties to tenants, sources of finance and real estate investors will be influenced by market perceptions of the benefits and detriments of such entertainment-type properties.

Changes in interest rates may increase our interest expense. Because most of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense. Approximately $174.8$114.1 million of our current debt will mature over the next twenty-four months and will require refinancing. Based on our debt outstanding as of December 31, 2024,2025, if interest rates were to increase by 1%, the corresponding increase in interest expense on our variable rate debt would decrease future earnings and cash flows by approximately $2.0$1.6 million per year. Potential future increases in interest rates may therefore negatively affect our financial condition and results of operations and reduce our access to the debt or equity capital markets.

In recent periods, our debt levels in Australia are higher than they would have been if funds had not been repatriated. On a company wide basis, this means that a reduction in the relative strength of the U.S. dollar versus the Australian Dollar and/or the New Zealand dollar would effectively raise the overall cost of our borrowing and capital and make it more expensive to return funds from the United States to Australia and New Zealand. As the impacts of COVID on our business operations in Australia and New Zealand have been less severe than on our operations in the U.S., plus the impact of Hollywood strikes on US operations, we have been looking to our operations in Australia and New Zealand to fund our overall corporate general and administrative expense (most of which is resident in the U.S.). TheWhile currentthe Australian and New Zealand Dollars have strengthened against the U.S. dollar in recent months, the strength of the U.S. Dollardollar over the past three years has diminished the value to our Company of our Australia and New Zealand cash flow.

In 2024,2025, global growth weakened, trade tensions heightened, and several emerging markets experienced significant downturns as macroeconomic and geopolitical developments weighed on market sentiments. Governmental policies of developed economies, such as the U.S., have a substantial effect on emerging markets, and the consequences of a trade war between two developed countries, like that of the U.S. and China, could further contribute to the adverse economic and political conditions of emerging and other developed economies. Additionally, North Korea’s nuclear weapons capabilities, Chinese activities relative to the South China Sea, Taiwan, and Hong Kong, and the Russian invasion of Ukraine continue to be an ongoing security concernconcern. and worseningWorsening relations between the U.S. and North Korea, Russia and ChinaChina, as well as the recent conflicts in the Middle East continue to create a global security issue that may adversely affect international business and economic conditions. While it is difficult for us to predict the effect of such trade wars and heightened geopolitical and economic instability on our business, they could lead to currency devaluation, economic and political turmoil, market volatility, and a loss of consumer confidence in the broader U.S. economy.

Typically, we have negative working capital. As we invest our cash in new acquisitions and the development of our existing properties, we have negative working capital. This negative working capital is typical in the cinema exhibition industry because our short-term liabilities are in part financing our long-term assets instead of long-term liabilities financing short-term assets, as is the case in other industries such as manufacturing and distribution. Our short-term liabilities also include significant obligations related to our cinema leases. See Part II, Item 8 – Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements-- Note 3 - Summary of Significant Accounting Policies – Operating Leases.

We have substantial lease liabilities. Most of our cinemas operate in leased facilities. These leases typically have “cost of living” or other rent adjustment features and require that we operate the properties as cinemas. The COVID-19 pandemic, increased competition from the internet, streaming and cable-based entertainment, and changes in film distribution have adversely affectaffected the ability of our cinema operating subsidiaries to meet these rental obligations. Even if our cinema exhibition business returns to pre-Pandemic levels and thereafter remains relatively constant, cinema level cash flow will likely be adversely affected unless we can increase our revenue sufficiently to offset increases in our rental liabilities.

If our company suffers cybersecurity attacks, data security challenges or privacy incidents that result in security breaches, we could suffer a loss of sales, additional liability, reputational harm or other adverse consequences. The effective operation of our international businesses depends on our network infrastructure, computer systems, physical, virtual and/or cloud based, and software. Our information technology systems collect and process information provided by customers, employees and vendors. In addition, third-party vendors’ systems process ticketing for our theaters. These various information technology systems and the data stored within them are subject to penetration by cyber attackers. We utilize industry accepted security protocols to securely maintain and protect proprietary and confidential information. However, despite our best efforts, our information systems may fail to operate for a variety of technological or human reasons. An interruption or failure of our information technology systems and of those maintained by our third-party providers could adversely affect our business, liquidity or results of operations and result in increases in reputational risk, litigation or penalties. Furthermore, any such occurrence, if significant could require us to expend resources to remediate and upgrade information technology systems. Since 2015, we have annually procured cybersecurity insurance to protect against cybersecurity risks; however, we cannot provide any assurance regarding the adequacy of such insurance coverage.coverage or the ability to obtain such coverage in the future.

Our stock is thinly traded. Our stock is thinly traded, with an average daily volume in 20242025 of only approximately 30,231 shares of Class A Stock. Our Class B Stock is very thinly traded with even less volume. This can result in significant volatility, as demand byof buyers and sellers can easily get out of balance.

For as long as Margaret Cotter continues to have voting power over more than 2/3rds of the Class B Stock, Margaret will have the power to sell the control of our Company to a purchaser or purchasers of her choosing without any approval of our Company’s Board or any other stockholder. To the extent that the Margaret Cotter controls more than two-thirds of our outstanding Class B Stock, she will have the power under Nevada law at any time, with or without cause, to remove any one or more Directors (up to and including the entire Board of Directors) by written consent taken without a meeting of the stockholders.

WhileUnder legislation signed into law in 2025, controlling stockholders mayof Nevada corporations owe certainonly a limited duty to refrain from using undue influence to induce a director breach of fiduciary duties tofor ourpersonal Company and/or minority stockholders, these duties are limited.gain. No assurances can be given that Margaret Cotter, alone or in conjunction with Ellen Cotter, will not take action that, while beneficial to her and members of her family (including Ellen Cotter) and legally enforceable, would not necessarily be in the best interests of our Company and/or our stockholders generally. Margaret Cotter holds her beneficial ownership of 409,552 shares of our Class B Stock ultimately as the trustee of the DMC Trust, under which she owes fiduciary duties to her children which may conflict with her obligations as a controlling stockholder of our Company.

Reference is made to the Cotter Schedule 13D for more detaildetailed information of the scope and extent of the holdings of Margaret Cotter and Ellen Cotter. Our Class A Stock is non-voting and accordingly our Class B Stock represents all of the voting power of our Company.

We have discussed in some detail under the heading “Business Description” in Part I of this Report our views as to the historic impact of the COVID-19 pandemic, the 2023 Hollywood strikes, spiking and then sustained increases in interest rates and certain labor laws on our business and, while not repeating that disclosure here, we incorporate that more detailed discussion by reference to provide context and background. Our discussion below is intended to be more summary in nature.

Between March 2022 and July 2023, the Federal Reserve raised the Federal Funds interest rates from 0.25% to 5.5%, the fastest hike in U.S. modern history. This significantly increased our interest expenses, further straining our liquidity. Although subsequent rate cuts infrom late 2024 through end of 2025 provided some relief, the higher interest rates continue to impact our business. Our average cost of borrowing has increased from 4.0% in 2019 to 7.8% in 2025.

Additionally,Legislative post-pandemicchanges legislationfollowing hasthe increasedpandemic ourhave contributed to higher labor related costs, affectingincluding wages, leave policies,requirements, and compliance expenses.obligations, Risingwhile costsincreases forin the cost of goods, utilities, and insurance have causedadded compoundingfurther financialexpense pressures.pressure. ToIn offset these challenges,response, we have continuedcontinue to lookemphasize foroperating waysefficiency and make measured adjustments to operate at our most efficient levels while also strategically raising ticket and Foodfood and Beveragebeverage (F&B)pricing pricesintended soto thatmanage wecosts dowithout notmaterially createaffecting barrierscustomer thatdemand. wouldIn alienateaddition, oran deterincreasingly our customers. The hyperactive litigation environment in the U.S.United States, including class action claims related to internet privacy and business practice regulations, has alsocreated putadditional pressure on our earnings and cash flow, aswith plaintiff’scertain classclaims actionasserting firms seek to enforce various internet privacy laws and laws pertaining to the structuring and regulationinterpretations of socialthese and business relationships in wayslaws that we believe areextend beyond thetheir scopeoriginal oflegislative what was intended by the legislatures adopting these laws.intent.

1.Asset Monetization: Between 2021 and 2024,2025, we sold sevennine real estate assets, generating $156.1$197.5 million in net proceeds. These proceeds helped pay down $82.2$99.9 million in debt, and fund $35.0$32.4 million capital improvements, while also helping us to sustain our operations. In addition, on January 31, 2025, we monetized our real estate holdings in Wellington, New Zealand, for NZ$38.0 million, part of which has been used to pay off New Zealand debt and repatriate to US.

2.Cinema Closures and Lease Adjustments: We have closed underperforming cinemas, where possible, including one in the U.S. in 2022, four in 2023 (three in the U.S. and one in New Zealand), and one in the U.S. in 2024.2024 and two in 2025 (one in the U.S. and one in New Zealand). Additionally, we have renegotiated leases to reduce occupancy costs, receivereceived deferrals or abatements, or shift to percentage-based rent agreements.

3.Administrative Cost-Saving Measures: We streamlined operations by selling our administrative office in Culver City, California, freeing up $1.3 million in cash and saving an estimated $2 million in operating costs for year 2025. We anticipatehave returningreduced our non-segment administrative expense from $15.5 million in 2024 to an$14.4 office environmentmillion in California later this year.2025.

4.Food & Beverage Innovations: In 2024, our global cinema divisions achieved record-high F&B sales per capita. BeerIn 2025, beer and wine are available in all U.S. locations, with liquor licenses secured at most locations in Australia and New Zealand. The introduction of mobile ticketing and F&B apps has assisted in generating additional revenue while reducing staffing needs.

5.Deferrals of Capital Improvements: We have generally constrained capital investment in the refurbishment of our cinemas,cinemas and have only built out 5 cinemas over the past 5 years. This has, however, likely adversely impacted revenues at some of our cinemas to the extent that they are in competition with more recently updated or renovated offerings.

6.Ongoing Liquidity Management: We continue to evaluate our assets to evaluatefor any future monetization that may be needed, focusing on non-core real estate assets that dowould notnot, without material capital commitments, in our view offer long-term growth opportunities for our stockholders, and we will continue to close underperforming cinemas at the end of their lease terms.terms or by negotiation. While the exact proceeds from future asset dispositions and the extent that they will ultimately be needed are uncertain, we remain confident in our ability to meet liquidity needs for 20252026 and 2026.2027.

One of our strategic priorities has been to continue upgrading the food and beverage menu at several of our global cinemas. As of December 31, 2024,2025, we have a total of 3837 theater locations with an upgraded food and beverage menus (i.e. menus that are beyond traditional popcorn, soda, and candy).

The additions to our cinema portfolio during the 2021-20242023-2025 were as follows:

(5)Liquor Licenses: Licenses are applicable at each cinema location, rather than each cinema auditorium. As of December 31, 2024,2025, we had (i) three licenses pending related to the sale of spirits and liquor in the U.S. (i.e. supplementing existing beer and wine licenses) and (ii) one license pending in Australia, which has subsequently been approved in January 2025. As of the date of this filing, 75%76% of our AU/NZ cinemas are licensed to sell alcoholalcohol, no liquor licenses pending in Australia and alltwo liquor licenses pending in New Zealand. All U.S. Cinemas are licensed to sell beer and wine and all, but three, can sell spirits/liquor.

44 Union Square Redevelopment (New York, N.Y.) – We have made significant progress in the development of our 44 Union Square property in Manhattan. On January 27, 2022, we entered a long-term lease with Petco for the lowercellar, level, ground floor,ground, and second floorfloors of the building, who is on a full rent cash paying basis. We continue our efforts to find a tenant for the remaining four floors of the building.

Minetta Lane Theatre (New York, N.Y.) – Audible hasholds its license agreement with us through March 15, 2026,2027 withhaving anexercised optionits toa extendone-year itrenewal foroption. anUnder additionalthe year.agreement, Audible presents plays featuring a limited cast of one or two characters and special live performance engagements on the Audible streaming service. During 2024,2025, we saw a great deal of shows such asincluding “LauraThe Benati:Energy NobodyCurfew CaresMusic Hour with Chris Thile & Punch Brother”, “DeadSexual Out-lawMisconduct of the Middle Classes”, “Creditors”, “Pansy Craze”, “Patton Oswalt: Black Coffee and Ice Water”, “Devon Franklin: Be True”, and “StrategicMexodus”. LoveThe Play”,wide alongrange withof manyproductions others.exemplify the diversity of programming and ongoing demand for live, high quality theatrical content.

Orpheum Theatre (New York, N.Y.) – STOMP closed (after 30 years at our theatre) on January 8, 2023. Under our termination agreement with the producers of STOMP, we have certain rights to provide the New York City venue for any future production of that show. Following STOMP’s historic run at the Orpheum, 2025 saw plays such as “The Jonathan Larson Project” and “Ginger Twinsies”.

Cinemas 1,2,3 Redevelopment (New York, N.Y.) – Currently operated as the Cinemas 123, we have historically treated this property as an asset held for long term development. However, in light of a variety of factors, such as market conditions in Manhattan for real estate assets, cost of capital and demands on our liquidity, subsequent to balance sheet date, we have begunretained Newmark & Company Real Estate, Inc. to exploresell alternativesthat forproperty. We now own 100% of this property.asset, as we acquired in the fourth quarter of 2025, as a part of the SHA Windup Transaction, the 25% interest that we did not own.

Newmarket Village ETC, (Brisbane, Australia) – We continue to improve our Newmarket Village ETC by adding new tenancies and focused marketing effortsTheefforts. The site includes a 23,218 square foot parcel adjacent to the center, improved with an office building. Over the next few years, we will be evaluating development options for this space. The combined center and office building is currently 96%98% leased.

Cinema exhibition segment operating income decreasedimproved by $2.9$6.4 million,million to a loss of $2.8$3.6 million for the year ended December 31, 2024,2025, compared to the same period in December 31, 2023,2024, primarily driven by aan decreaseimprovement in cinema performance due to alower weakeroperating movieexpense slateglobally, resultinglower depreciation, amortization, general and administrative expense in the U.S. and Australia, offset by lower box office revenue in all three countries,countries due to an overall weaker movie slate in 2025, lower concession revenues in the U.S.Australia and New Zealand, and lower advertising revenues in the U.S. It was partially offset by (i) a decrease in depreciation, amortization, general and administrative expense in all three countries, and (ii) lower operating expense in the U.S. and New Zealand.countries.

Cinema exhibition segment operating income for the fourth quarter of 20242025 was $3.8$0.9 million, ana increasedecrease of $7.9$2.9 million from an operating lossincome of $4.1$3.8 million in the same time period of 20232024 primarily attributable to a stronger holidayweaker movie releases.releases in all three countries.

Cinema revenue decreased by $12.5$6.5 million, to $195.1$188.6 million for the year ended December 31, 2024,2025, compared to 20232024 primarily due to a weaker movie slate asand acinema resultclosures ofin theUS lingeringand impactsNew of the 2023 Hollywood strikes.Zealand.

In Australia, cinema revenues increaseddecreased by $2.0$4.3 million, to $82.0$77.7 million for the year ended December 31, 2024,2025, compared to 2023.2024.

For the quarter ended December 31, 2024,2025, Cinema segment revenue increaseddecreased by $12.7$7.7 million against the fourth quarter of 2023,2024, to $54.6$46.9 million, which was primarily attributable to a strongerweaker fourth quarter holiday blockbuster film slate in 20242025 vs 20232024 with the releases of Wicked,Wicked: MoanaFor Good, Zootopia 2, GladiatorAvatar: II,Fire and SonicAsh, Theand Hedgehog 3Frankenstein compared to Q4 2023,2024 whichand wascinema heavilyclosures impactedin byUS theand 2023New strikes.Zealand.

Operating expense for the full year 20242025 decreased by $8.2$11.6 million, to $184.0$172.4 million when compared to 20232024 due to lower film rent in theall U.S.three and New Zealand associated with decreased ticket sales,countries, lower F&B costs in theAustralia U.S.,and New Zealand, along with decreased occupancy expenses in theUS U.S.and New Zealand.

For the quarter ended December 31, 2024,2025, operating expenses increaseddecreased by $5.3$4.5 million, to $47.6$43.1 million when compared to the fourth quarter of 20232024 dueprimarily todriven increasedby filmcinema rentclosures asin athe result of a strong film slateU.S. and increasedNew concession cost.Zealand.

Depreciation, amortization, general and administrative expense for the year-ended December 31, 20242025 decreased by $1.4$1.3 million, to $13.9$12.6 million compared to 20232024 primarily driven by cinema closures in the U.S.,U.S. saleand ofNew our Culver City office building,Zealand, and delay in CAPEX spending.

Real estate segment operating income was $5.9 million for the year ended December 31, 2025, which was an increase of $1.2 million from an operating income of $4.7 million for the year ended December 31, 2024, which was an increase of $0.9 million from an operating income of $3.8 million for the year ended December 31, 2023, primarily as a result of (i) increased revenue for the LiveUS Theatresproperties including live theatres, (ii) lower operating expense in Australia and AustralianNew PropertyZealand divisionsfrom sale of Courtenay Central and Cannon Park properties, and (iiiii) lower depreciation and amortization expense in all three countries. Partially offset by the decrease of revenue from Australia and New Zealand from sale of Courtenay Central and Cannon Park properties.

Income tax expense decreasedincreased by $0.1$0.4 million, to $0.5$0.9 million in 2024,2025, when compared to 2023,2024, primarily due to aan decreaseincrease in adjustmentsincome fortax valuationexpense allowancefrom Australia in 2024.2025.

In 2024,2025, due primarily to the negative operating conditions caused by the 2023 Hollywood strikes and increased interest rates, as well as the lingering impacts from the COVID-19 pandemic, we (i) conserved our cash and chose to defer non-essential capital expenditures (such as cinema upgrades and refurbishments), (ii) refinanced our existing debt to provide longer maturity dates and eased financial covenants and/or obtained waivers of financial ratio teststests, and (iii) monetized one non-cinematwo real estate assetassets and identified certain other assets as candidates for potential monetization to raise additional liquidity. In FebruaryJanuary 2024,2025, we sold anour underutilizedCourtenay administrativeCentral office buildingproperties in CulverNew City,Zealand California for $10 million and have, for the time being, implementedat a remotegross worksale structureprice forof our$21.5 California.million. ProceedsThe proceeds were used to pay off the Westpac mortgage ofon $8.4the million,property, with $1.3 million remaining for working capital purposes. It is estimated that movingand to areduce 100%our remoteBank workof modelAmerica resulteddebt. In May 2025, we sold our Cannon Park ETC in costAustralia savingsat witha respectgross sale price of $20.7 million. The proceeds were used principally to thepay yearoff our NAB bridging facility, and to reduce our Bank of approximatelyAmerica $2.0 million.debt.

We are encouraged by the improved performance of our cinema business in the firstsecond quarter of 2026, which reinforces our confidence in the continued recovery of our operations and the global cinema industry.2026 While macroeconomic challenges remain, our firstsecond quarter 2026 results reflect improving global cinema industry momentum and support our confidence in the continued growth of our cinema business. Q1Q2 2026 benefited from theatrical successes including The Super Mario Galaxy Movie, The Devil Wears Prada 2, Michael, Backrooms, Obsession, and Toy Story 5. These releases continued the momentum that was set in Q1 2026 by releases such as Project Hail Mary, Wuthering Heights, GOAT, and Hoppers. Additionally, this quarter also saw the continued momentum of blockbuster hits from last quarter including Avatar: Fire and Ash, Zootopia 2, Wicked: For Good, Marty Supreme, and The Housemaid.

Inflationary pressures, ongoing supply chain issuesissues, increases in labor costs, fuel costs, and increased operating expenses in general continue to push up our variable costs while we encounter consumer resistance to higher ticket prices;

We believe that our ongoing focus on operational efficiency and strategic initiatives has improved our operationsoperational results.results, Overand we continue to respond to the pastprevailing quarter,macroeconomic we have worked to optimize the efficiency of our locations,challenges by:

Prioritizing the elevation of the guest experience through ouroOur expanded Food and Beverage program. Beer and wine, and liquor service is available at nearly every one of our U.S. cinema locations. These enhancementsWe are mirroredworking towards mirroring these enhancements in our Australian and New Zealand markets, ensuring a consistent and premium experience for audiences across all regions. This strong focus on Food and Beverage contributed in revenue increases in all countries for the quarter compared to same period in the prior year.

We are expandingoExpanding our loyalty and membership ecosystem to strengthen guest engagement.ecosystem. In late 2024, we transitionedreplaced fromour former loyalty program, Reel Club towith Reading Rewards and Angelika Rewards in Australia and New Zealand. Members can also upgrade to Reading and Angelika Rewards BoostZealand, with a fee.paid Boost tier available for each. In the United States, we transitionedreplaced fromour former loyalty program, Cinema Extras in our U.S.at Consolidated Theatres to a new free to join Consolidated rewards program and paid subscription premium membership at the end of 2025 with both a free to join and inmembership. ourIn U.S.early Reading2026 Cinemaswe tolaunched a new free-to-join Reading rewards programfree and paid subscription premium membership inloyalty earlyprogram 2026.at Reading Cinemas. Our existingAngelika AngelikaU.S. free membership program in the U.S. continues to grow, with membership increasing meaningfully compared to the prior year and we plan to addlaunch an Angelikaa paid subscription premium membershiptier in Q2Q3 2026.

Looking ahead, we believe that the rest of the 2026 film slate presents a major opportunity to continue the positive momentum that we are seeing. As of today, Q3 2026 titles such as Super Mario Galaxy Movie and Michael have generated strong box office results, reinforcing continued audience appetite for compelling, broadly appealing theatrical releases. We will continue to have highly anticipated major releases throughout the remainder of the year including The Devil Wears Prada 2, Toy Story 5, Supergirl,Odyssey, Minions 3,& Moana,Monsters, The Odyssey,and Spider Man: Brand New Day, Theand Catother compelling releases later in 2026, including The Hunger Games: Sunrise on the Hat,Reaping, Avengers: Doomsday, and Dune: Part Three.Three and Jumanji 3. These 2026 future releases are positioned to appeal to a wide variety of audiences,audiences. which should allow for a strong carry-through for the rest of the year. These titlesThey cover a wide range of genres, from family animation to science fiction, and each withhave the potential to produce significant box office results. Supported by our strategic operational initiatives and continued audience engagement efforts, we believe that this diverse slate positions us well for a robust second half of the year.

In the United States, we now own 100% of our Cinemas 1,2,3 property and as of February 2026 we have classified this property as held for sale. AtOur oursales 44efforts Unionare Squareprogressing, propertyand inwe New York, Petco continuesexpect to occupycomplete the cellar,sale ground,by andthe secondend floorsof under2026. aWe long-termcontinue lease on a full rent-paying basis, while weto work to secure tenant(s) for the remaining space.space Weat our 44 Union Square property in New York, and we believe that demand for space in the Union Square submarket is improving. Additionally, we continue to hold our Newberry Yard property in Williamsport, Pennsylvania for sale.

InOur monetization of our property in Napier, New Zealand, which we signed a purchase and sale agreement for on March 4, 20262026, is on hold while we work with the buyer to monetizeresolve ourcertain Napierunforeseen property.issues Thewith transactionthe isowner currentlyof inthe itscar duepark, diligencewhich period.the cinema leases.

InDespite the post-pandemic period, we havehaving monetized nine property assets,assets butsince the pandemic, we believe our cinema and real estate segments remain complementary and central to our long-term growth strategy. Prior to the pandemic, cinema generated cash flows supported the capital requirements of our real estate development activities. During this period, we relied more heavily on income from our real estate assets and selectively monetized assets with embedded value to support the Company. With the effects of COVID-19 and the 2023 Hollywood strikes now largely behind us, we expect improved film quality and consistency to drive increased attendance and restore cinema generated cash flows as a key source of capital to expand and enhance our existing cinema and real estate portfolios. ToCurrently, to address anticipated liquidity needs, Newberry Yard and Cinemas 1,2,3 are held for sale. FollowingDespite these planned dispositions, we expect to retain assets in Pennsylvania, Manhattan, and Australia that we believe offer meaningful long term value creation opportunities as capital resources permit.

Our F&B SPP in functional currency for the threequarter and six months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, are as follows:

AnAverage additionalTicket Price (“ATP”) Per Patron is an important key performance indicator utilized by management in our cinema exhibition segmentsegment. is Average Ticket Price (“ATP”) Per Patron, whichIt is calculated based on our total Box Office Revenues on a post-tax basis divided by our attendance during a specific period. ATP serves to measure our operational cinema performance when compared to that of our competitors. ATP is a useful metric for evaluating our ability to achieve a strong top line performance, gauging the effectiveness of our cinemas’ pricing strategies and our ability to draw audiences back to our theaters. Management uses ATP to adjust and inform ticket pricing schemes for our individual theaters, measure the effectiveness of our content programming, and ensure that price barriers are not created for core guests.

Our ATP in functional currency for the threequarter and six months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, are as follows:

Our real estate key performance indicator results for the threequarter and six months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, measured in functional currencies, are as follows:

In the case of our Live Theatres, with respect to key performance indicators, we primarily look to the Live Theatre rental revenue and ancillary income from the theatres. This key performance indicator represents box office revenues less amounts paid to producers for license fee settlements, plus ancillary income earned by us from certain theatre operations. Our Live Theatre rental revenue and ancillary income for the first quarter of 2026 improved to $0.7 million compared to $0.5 million for the first quarter of 2025.

in Australia, under the Reading Cinemas, Angelika Cinemas, and the State Cinema by Angelika,Angelika brands, and for our one unconsolidated joint venture theatre, Event Cinemas brands.Cinemas.

in New Zealand, under the Reading Cinemas brand and for our two unconsolidated joint venture theatres, Rialto Cinemas brands.Cinemas.

Shown in the following table are the number of locations and screens in our cinema circuit in each country, by state/territory/region, our cinema brands, and our interest in the underlying assets as of MarchJune 31,30, 2026.

Our cinema revenues consistare primarily ofgenerated cinemafrom ticket sales,sales F&Band rentals, food and beverage sales, screen advertising, gift card sales, cinema rentals,cards and online convenience fee revenue generated by the sale of our cinema tickets through our websitescertificates, and mobilebooking apps.fees from certain online and app purchases. Cinema operating expenses consist of the costs directly attributable to the operation of the cinemas, including (i) film rent expense, (ii) cost of goods sold, (iii) operating costs, such as labor costs and utilities, and (iv) occupancy costs. Cinema revenues and certain expenses fluctuate with the availability of quality content and the number of weeks such content stays on screen. For a breakdown of our current cinema assets that we own and/or manage, please refer to Part I, Item 1 – Our Business of our 2025 Form 10-K.

The upgrades to our cinema circuit’s film exhibition technology and amenities over the years are as summarized in the following table as of MarchJune 31,30, 2026:

(2)Premium Service: This is our "Business Class Dine-in Service" in our Australian and New Zealand cinemas, which typically includes upgraded F&B menu (some with alcoholic beverages) and may include luxury recliner seating features (less intimate 80-seat cinemas),features, but no waiter service.

Through our various subsidiaries, we engage in the real estate business through the development, ownership, rental or licensing to third parties of retail, commercial, and Live Theatre assets. Our real estate business creates long-term value for our stockholders through the continuous improvement and development of our investment and operating properties, including our ETCs.Entertainment Themed Centers (“ETCs”). In addition to owning the fee interests in 7 of our cinemas (as presented in the table under Cinema Exhibition Overview), as of MarchJune 31,30, 2026, we:

own our 44 Union Square property in Manhattan comprised of retail and office space, which is currently in the lease-up phase. The cellar, ground floor, and second floor of the building are now fullypartially leased to Petco, which is in occupancy of its premises on a full rent paying basisPetco;

own a 100% interest in Sutton Hill Properties LLC, a limited liability company, which in turn owns the fee interest in and improvements constituting our Cinemas 1,2,3 located in Manhattan. In addition, in the fourth quarter of 2025, we wound up our long termlong-term relationship with Sutton Hill Associates pursuant to a transaction whereby we purchased the 25% non-controlling minority interest in our Cinemas 1,2,3, property (also identified above as an “owned” cinema property) that we did not already own and the ground-lessee’s interest in the land and improvements constituting our Village East property. In February 2026, we classified our Cinemas 1,2,3 property as held for sale;

own the approximately 23.9-acre Newberry Yard property in Williamsport, Pennsylvania, which is currently being held for sale; and own approximately 201-acres principally in Pennsylvania from our legacy railroad business, including the Reading Viaduct in downtown Philadelphia;Philadelphia.

The combination of the COVID-19 pandemic, the lack of any material U.S. public pandemic financial assistance due to our public company status, the 2023 Hollywood Strikes, increased interest rates, inflation, increased labor costs, and decreases in the value of the Australian Dollar and New Zealand Dollar vis-a-vis the U.S. Dollar over the past five years, have significantly impacted our cinema operations and necessitated capital conservation to sustain our cinema operations and service our debt. This has required us to rethink our real estate business plan and to monetize a number of properties that had pre-COVID been slated for long-term development.

(i)Our non-income producing land holdingsholding in Coachella, California (March 5, 2021) and Manukau, New Zealand (March 4, 2021);

(viii)Our administrativenon-income officeproducing buildingland holding in Culver City,Coachella, California (FebruaryMarch 23,5, 20242021);

(viiviii) On January 31, 2025, our approximatelyWellington 3.7 acre five-parcel assemblage in the entertainment center of Wellington, New Zealand,properties, which includesincluded the Courtenay Central building; and (viiiix) Most recently, on May 21, 2025, our Cannon Park property in Townsville, Queensland, Australia.

These properties were identified for sale and sold for various reasons, such reasons have included without limitation (i)ourpreviously need fordiscussed liquidity due to the circumstances referred to above,needs, (ii)the amount of capital required to materially increase their value in the immediate to mid-term, (iii)with respect to certain assets, their immaterial or non-income producing nature, or (iv)inwith therespect case ofto our Culver City office building, remote working making the property wassurplus not required for our operations because it exceeded our office sizeto requirements. Since the sale of this office building, we have been working remotely in Southern California.

44 Union Square Redevelopment (New York, N.Y.) – On January 27, 2022, we entered a long-term lease with Petco for the lower level, ground floor, and second floor of the building. Petco continues to be open for business and in occupancy on a full rent paying basis. We continue to explore a variety of possible office and non-office types of uses for the remainder of the building.