On September 22, 2022 (the "Closing Date"), the Company acquired all of the issued and outstanding shares of SSIMWAVE Inc. ("SSIMWAVE") pursuant to a share purchase agreement by and among the Company, SSIMWAVE, and related shareholders (the "Sellers"). SSIMWAVE provides perceptual quality measurement and optimization solutions based on artificial intelligence technologies for leading media and entertainment companies. Following the acquisition, SSIMWAVE became a wholly-owned subsidiary of the Company.

As consideration for the acquisition of SSIMWAVE, the Company is paying an aggregate purchase price of approximately $23.1 million, comprised of: (i) $19.4 million in cash, of which $16.2 million was paid on the Closing Date, (ii) 160,547 common shares of the Company with a fair value of $1.9 million (the "IMAX Share Consideration"), and (iii) contingent consideration with a fair value of $1.8 million (the "Earn-Out Payment"). The fair value of the IMAX Share Consideration is reduced to reflect the fair value of certain restrictions on the future transfer of the shares. The Earn-Out Payment may be paid to certain Sellers in an aggregate amount of up to $2.0 million in cash, contingent upon and following the achievement of certain commercial and financial milestones during the period from January 1, 2023 to December 31, 2024. The fair value of the Earn-Out Payment is based on management's assessment of the likelihood of achieving these milestones.

The revenues and earnings of SSIMWAVE were not material to the three and nine months ended September 30, 2022. In the third quarter of 2022, the Company incurred $1.0 million of professional fees in connection with the acquisition of SSIMWAVE, which were recorded within Selling, General and Administrative Expenses on the Company's Condensed Consolidated Statements of Operations.

The Company is accounting for the acquisition of SSIMWAVE as a business combination and is in the process of valuing the assets acquired, such as technology-related and customer-related intangible assets, and liabilities assumed. The Company will complete the allocation of the purchase price during the twelve-month measurement period following the date of the acquisition. The table below summarizes the preliminary allocation of the purchase price to the SSIMWAVE assets acquired and liabilities assumed. This allocation is subject to revision upon completion of the Company's valuation procedures.


(In thousands of U.S. Dollars)
Purchase Price:
Cash payments	$	19,448
IMAX Share Consideration		1,947
Earn-Out Payment		1,750
Total Purchase Price	$	23,145
Allocation of Purchase Price:
Cash and cash equivalents	$	3,582
Accounts receivable		158
Property, plant and equipment		409
Other assets		442
Accounts payable and accrued liabilities		(1,091	)
Deferred revenue		(1,274	)
Federal economic development loan, net of unaccreted interest benefit		(1,772	)
Goodwill		22,691
Total Purchase Price	$	23,145