DDC Group International Inc. d/b/a Cineplex Digital Media
Condensed Consolidated Balance Sheets
(Unaudited)
(expressed in thousands of Canadian dollars)
|
Notes |
September 30, |
December 31, |
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|
2025 |
2024 |
|||||||||||
|
Assets |
||||||||||||
|
Current assets |
||||||||||||
|
Cash and cash equivalents |
$ | 7,515 | $ | — | ||||||||
|
Trade and other receivables |
6,499 | 8,184 | ||||||||||
|
Income taxes receivable |
3 | 119 | 239 | |||||||||
|
Inventories |
3,402 | 4,272 | ||||||||||
|
Prepaid expenses and other current assets |
2,097 | 463 | ||||||||||
|
Due from parent |
1,698 | 6,002 | ||||||||||
| 21,330 | 19,160 | |||||||||||
|
Non-current assets |
||||||||||||
|
Property, equipment and leaseholds |
3,708 | 4,992 | ||||||||||
|
Right-of-use assets |
2 | 30,878 | 37,841 | |||||||||
|
Deferred income taxes |
3 | 10,915 | 9,585 | |||||||||
|
Intangible assets |
969 | 1,167 | ||||||||||
|
Goodwill |
44,686 | 44,686 | ||||||||||
| $ | 112,486 | $ | 117,431 | |||||||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |
| DDC Group International Inc. d/b/a Cineplex Digital Media | (1) |
| 2025 THIRD QUARTER REPORTS - CONSOLIDATED BALANCE SHEETS |
DDC Group International Inc. d/b/a Cineplex Digital Media
Condensed Consolidated Balance Sheets...continued
(Unaudited)
(expressed in thousands of Canadian dollars)
|
Notes |
September 30, |
December 31, |
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|
2025 |
2024 |
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|
Liabilities |
||||||||||||
|
Current liabilities |
||||||||||||
|
Accounts payable and accrued liabilities |
$ | 8,627 | $ | 11,115 | ||||||||
|
Deferred revenue and other |
5 | 11,859 | 5,478 | |||||||||
|
Lease obligations |
4 | 9,946 | 8,801 | |||||||||
| 30,432 | 25,394 | |||||||||||
|
Non-current liabilities |
||||||||||||
|
Lease obligations |
4 | 26,979 | 32,870 | |||||||||
|
Other liabilities |
230 | 226 | ||||||||||
| 27,209 | 33,096 | |||||||||||
|
Total liabilities |
57,641 | 58,490 | ||||||||||
|
Shareholders’ equity |
||||||||||||
|
Share capital |
51,960 | 51,960 | ||||||||||
|
Equity |
354 | 5,096 | ||||||||||
|
Contributed surplus |
2,287 | 1,525 | ||||||||||
|
Cumulative translation adjustment |
244 | 360 | ||||||||||
|
Total shareholders’ equity |
54,845 | 58,941 | ||||||||||
| $ | 112,486 | $ | 117,431 | |||||||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |
| DDC Group International Inc. d/b/a Cineplex Digital Media | (2) |
| 2025 THIRD QUARTER REPORTS - CONSOLIDATED BALANCE SHEETS |
DDC Group International Inc. d/b/a Cineplex Digital Media
Condensed Consolidated Statements of Operations
For the nine months ended September 30, 2025 and 2024
(Unaudited)
(expressed in thousands of Canadian dollars, except per share amounts)
|
Nine months ended September 30, |
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|
Notes |
2025 |
2024 |
||||||||||
|
Revenues |
5 | |||||||||||
|
Project revenues |
12,177 | 11,117 | ||||||||||
|
Media and services revenues |
25,933 | 22,718 | ||||||||||
| 38,110 | 33,835 | |||||||||||
|
Expenses |
||||||||||||
|
Depreciation - right-of-use assets |
7,455 | 7,661 | ||||||||||
|
Depreciation and amortization - other assets |
2,293 | 2,664 | ||||||||||
|
(Gain) loss on disposal of assets |
5 | — | (194 | ) | ||||||||
|
Purchased services |
6,213 | 6,372 | ||||||||||
|
Other inventories consumed |
5,858 | 5,287 | ||||||||||
|
Employee wages, salaries and benefits |
14,604 | 14,071 | ||||||||||
|
Other costs |
6 | 5,314 | 3,872 | |||||||||
|
Interest expense - lease obligations |
4 | 1,771 | 2,111 | |||||||||
|
Interest expense - other |
22 | 22 | ||||||||||
|
Foreign exchange |
622 | (250 | ) | |||||||||
| 44,152 | 41,616 | |||||||||||
|
Loss before income taxes |
(6,042 | ) | (7,781 | ) | ||||||||
|
Income taxes recovery |
3 | |||||||||||
|
Current |
31 | 22 | ||||||||||
|
Deferred |
(1,331 | ) | (1,733 | ) | ||||||||
| (1,300 | ) | (1,711 | ) | |||||||||
|
Net (loss) income |
$ | (4,742 | ) | $ | (6,070 | ) | ||||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |
| DDC Group International Inc. d/b/a Cineplex Digital Media | (3) |
| 2025 THIRD QUARTER REPORTS - CONSOLIDATED STATEMENTS OF OPERATIONS |
DDC Group International Inc. d/b/a Cineplex Digital Media
Condensed Consolidated Statements of Comprehensive Income (Loss)
For the nine months ended September 30, 2025 and 2024
(Unaudited)
(expressed in thousands of Canadian dollars)
|
Nine months ended September 30, |
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|
2025 |
2024 |
|||||||||||
|
Net (loss) income from continuing operation |
$ | (4,742 | ) | $ | (6,070 | ) | ||||||
|
Other comprehensive (loss) income |
||||||||||||
|
Items that will be reclassified subsequently to net income: |
||||||||||||
|
Foreign currency translation adjustment |
(116 | ) | 61 | |||||||||
|
Total comprehensive (loss) income |
$ | (4,858 | ) | $ | (6,009 | ) | ||||||
|
(Loss) earnings per share - basic |
7 | $ | (372 | ) | $ | (476 | ) | |||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |
| DDC Group International Inc. d/b/a Cineplex Digital Media | (4) |
| 2025 THIRD QUARTER REPORTS - CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
DDC Group International Inc. d/b/a Cineplex Digital Media
Condensed Consolidated Statements of Changes in Equity
For the nine months ended September 30, 2025 and 2024
(Unaudited)
(expressed in thousands of Canadian dollars)
|
Share capital |
Contributed surplus |
Cumulative translation adjustment |
Equity |
Total |
||||||||||||||||
|
January 1, 2025 |
$ | 51,960 | $ | 1,525 | $ | 360 | $ | 5,096 | $ | 58,941 | ||||||||||
|
Net loss |
— | — | — | (4,742 | ) | (4,742 | ) | |||||||||||||
|
Other comprehensive income |
— | (116 | ) | — | (116 | ) | ||||||||||||||
|
Total comprehensive loss (income) |
— | — | (116 | ) | (4,742 | ) | (4,858 | ) | ||||||||||||
|
Issuance of shares on exercise of options |
762 | — | — | 762 | ||||||||||||||||
|
September 30, 2025 |
$ | 51,960 | $ | 2,287 | $ | 244 | $ | 354 | $ | 54,845 | ||||||||||
|
January 1, 2024 |
$ | 51,960 | $ | 572 | $ | 229 | $ | 7,422 | $ | 60,183 | ||||||||||
|
Net income |
— | — | — | (6,070 | ) | (6,070 | ) | |||||||||||||
|
Other comprehensive loss |
— | — | 61 | — | 61 | |||||||||||||||
|
Total comprehensive loss (income) |
— | — | 61 | (6,070 | ) | (6,009 | ) | |||||||||||||
|
Reclassification of cumulative translation adjustment |
— | 149 | (149 | ) | — | — | ||||||||||||||
|
Issuance of shares on exercise of options |
— | 585 | — | — | 585 | |||||||||||||||
|
September 30, 2024 |
$ | 51,960 | $ | 1,306 | $ | 141 | $ | 1,352 | $ | 54,759 | ||||||||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |
| DDC Group International Inc. d/b/a Cineplex Digital Media | (5) |
| 2025 THIRD QUARTER REPORTS - CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
DDC Group International Inc. d/b/a Cineplex Digital Media
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2025 and 2024
(Unaudited)
(expressed in thousands of Canadian dollars)
|
Nine months ended September 30, |
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|
Notes |
2025 |
2024 |
||||||||||
|
Cash provided by (used in) |
||||||||||||
|
Operating activities |
||||||||||||
|
Net (loss) income from continuing operations |
$ | (4,742 | ) | $ | (6,070 | ) | ||||||
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities |
||||||||||||
|
Depreciation and amortization - other assets |
2,293 | 2,664 | ||||||||||
|
Depreciation - right-of-use assets |
7,455 | 7,661 | ||||||||||
|
Other non-cash interest |
22 | 22 | ||||||||||
|
(Gain) loss on disposal of assets |
5 | — | (194 | ) | ||||||||
|
Deferred income taxes |
3 | (1,331 | ) | (1,733 | ) | |||||||
|
Non-cash share-based compensation |
762 | 585 | ||||||||||
|
Changes in operating assets and liabilities |
9 | 9,807 | 1,199 | |||||||||
|
Net cash provided by operating activities |
14,266 | 4,134 | ||||||||||
|
Investing activities |
||||||||||||
|
Purchases of property, equipment and leaseholds |
4 | (386 | ) | (439 | ) | |||||||
|
Intangible assets additions |
(427 | ) | (599 | ) | ||||||||
|
Net cash provided by (used in) investing activities |
(813 | ) | (1,038 | ) | ||||||||
|
Financing activities |
||||||||||||
|
Repayments of lease obligations - principal |
(5,236 | ) | (3,848 | ) | ||||||||
|
Due to/from parent |
(670 | ) | 695 | |||||||||
|
Net cash used in financing activities |
(5,906 | ) | (3,153 | ) | ||||||||
|
Effect of exchange rate differences on cash |
(32 | ) | 57 | |||||||||
|
Increase in cash and cash equivalents |
7,515 | — | ||||||||||
|
Cash and cash equivalents - Beginning of period |
— | — | ||||||||||
|
Cash and cash equivalents - End of period |
$ | 7,515 | $ | — | ||||||||
|
Supplemental information |
||||||||||||
|
Cash paid for interest - lease obligation |
$ | 1,771 | $ | 2,111 | ||||||||
|
Cash paid for interest - other |
$ | — | $ | — | ||||||||
|
Cash paid for income taxes, net |
$ | (51 | ) | $ | — | |||||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. | |
| DDC Group International Inc. d/b/a Cineplex Digital Media | (6) |
| 2025 THIRD QUARTER REPORTS - CONSOLIDATED STATEMENTS OF CASH FLOWS |
(expressed in thousands of Canadian dollars, except per share amounts)
1. General information
DDC Group International Inc. (“DDC”) is an Ontario, Canada corporation and a wholly owned subsidiary of Cineplex Entertainment Limited Partnership (“CELP”). DDC serves as the holding company for Cineplex Digital Media Inc. and Cineplex Digital Media US Inc. (collectively "CDM"), which together operate as a leading provider of digital signage and digital place-based media solutions across North America. CDM is headquartered at 137 Northfield Drive West, Waterloo, Ontario, N2L 5A6.
2. Right-of-use-assets
The following tables present right-of-use assets for CDM for the nine months ended September 30, 2025 and 2024:
|
Property |
Equipment |
Total |
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|
At September 30, 2025 |
||||||||||||
|
Cost |
$ | 2,140 | $ | 57,412 | $ | 59,552 | ||||||
|
Accumulated depreciation |
(1,270 | ) | (27,404 | ) | (28,674 | ) | ||||||
|
Net book value |
$ | 870 | $ | 30,008 | $ | 30,878 | ||||||
|
Nine months ended September 30, 2025 |
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|
Opening net book value |
$ | 507 | $ | 37,334 | $ | 37,841 | ||||||
|
Additions |
492 | — | $ | 492 | ||||||||
|
Extensions and modifications |
— | — | $ | — | ||||||||
|
Depreciation for the period |
(129 | ) | (7,326 | ) | $ | (7,455 | ) | |||||
|
Closing net book value |
$ | 870 | $ | 30,008 | $ | 30,878 | ||||||
|
Property |
Equipment |
Total |
||||||||||
|
At September 30, 2024 |
||||||||||||
|
Cost |
$ | 1,649 | $ | 14,883 | $ | 16,532 | ||||||
|
Accumulated depreciation |
(1,081 | ) | (18,418 | ) | (19,499 | ) | ||||||
|
Net book value |
$ | 568 | $ | (3,535 | ) | $ | (2,967 | ) | ||||
|
Nine months ended September 30, 2024 |
||||||||||||
|
Opening net book value |
$ | 751 | $ | 3,944 | $ | 4,695 | ||||||
|
Additions |
— | 43,344 | 43,344 | |||||||||
|
Extensions and modifications |
— | — | — | |||||||||
|
Depreciation for the period |
(183 | ) | (7,478 | ) | (7,661 | ) | ||||||
|
Closing net book value |
$ | 568 | $ | 39,810 | $ | 40,378 | ||||||
| DDC Group International Inc. d/b/a Cineplex Digital Media | |
| 2025 THIRD QUARTER REPORTS - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | (7) |
(expressed in thousands of Canadian dollars, except per share amounts)
3. Deferred income taxes
Based on substantively enacted corporate tax rates, expected timing of reversals and expected taxable income allocation to various tax jurisdictions, deferred income taxes are as follows:
|
September 30, 2025 |
December 31, 2024 |
|||||||
|
Deferred income tax assets |
||||||||
|
Property, equipment and leaseholds and deferred tenant inducements - difference between net carrying value and undepreciated capital cost |
$ | 227 | $ | 111 | ||||
|
Accounting provisions not currently deductible |
1,684 | 1,105 | ||||||
|
Income tax credits available |
450 | 450 | ||||||
|
Operating losses available for carry-forward |
9,821 | 9,184 | ||||||
|
Total gross deferred income tax assets |
12,182 | 10,850 | ||||||
|
Future deferred tax liabilities |
||||||||
|
Intangible assets |
(1,267 | ) | (1,265 | ) | ||||
|
Total gross deferred income tax liabilities |
(1,267 | ) | (1,265 | ) | ||||
|
Net deferred income tax asset recognized |
$ | 10,915 | $ | 9,585 | ||||
At December 31, 2020 the recoverability of the net deferred income tax assets was uncertain and accordingly the net deferred tax assets were derecognized. During the second quarter of 2023, Cineplex Digital Media assessed the recoverability of net deferred income tax assets and determined that the expected return to profitability provided a reasonable expectation that previously derecognized net deferred income tax assets will be utilized to offset future periods of taxable income, resulting in income tax recovery of approximately $8,923 in the second quarter of 2023.
Cineplex Digital Media’s combined statutory income tax rate at September 30, 2025 was 26.5% (2024 - 26.6%).
| DDC Group International Inc. d/b/a Cineplex Digital Media | |
| 2025 THIRD QUARTER REPORTS - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | (8) |
(expressed in thousands of Canadian dollars, except per share amounts)
4. Lease obligations
The following table presents lease obligations for CDM for the nine months ended September 30, 2025 and 2024:
|
Property |
Equipment |
Total |
||||||||||
|
Nine months ended September 30, 2025 |
||||||||||||
|
Opening balance |
$ | 523 | $ | 41,148 | 41,671 | |||||||
|
Additions |
492 | — | 492 | |||||||||
|
Extensions and modifications |
— | — | — | |||||||||
|
Lease payment |
(218 | ) | (6,791 | ) | (7,009 | ) | ||||||
|
Interest expense |
39 | 1,732 | 1,771 | |||||||||
|
Closing lease obligations |
$ | 836 | $ | 36,089 | $ | 36,925 | ||||||
|
Less: current portion |
240 | 9,706 | 9,946 | |||||||||
|
Non-current portion of lease obligations of continuing operations |
$ | 596 | $ | 26,383 | $ | 26,979 | ||||||
|
Property |
Equipment |
Total |
||||||||||
|
Nine months ended September 30, 2024 |
||||||||||||
|
Opening balance |
$ | 760 | $ | 4,773 | $ | 5,533 | ||||||
|
Additions |
— | 43,344 | 43,344 | |||||||||
|
Extensions and modifications |
— | — | — | |||||||||
|
Lease payment |
(218 | ) | (5,740 | ) | (5,958 | ) | ||||||
|
Interest expense |
42 | 2,069 | 2,111 | |||||||||
|
Closing lease obligations |
$ | 584 | $ | 44,446 | $ | 45,030 | ||||||
|
Less: current portion |
250 | 7,971 | 8,221 | |||||||||
|
Non-current portion of lease obligations |
$ | 334 | $ | 36,475 | $ | 36,809 | ||||||
| DDC Group International Inc. d/b/a Cineplex Digital Media | |
| 2025 THIRD QUARTER REPORTS - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | (9) |
(expressed in thousands of Canadian dollars, except per share amounts)
5. Revenue
The following tables disclose the changes in deferred revenue and other for the nine months ended September 30, 2025 and 2024:
|
December 31, 2024 |
Additions |
Recognized |
Translation |
September 30, 2025 |
||||||||||||||||
|
Media deposits |
$ | 5,478 | $ | 14,514 | $ | 8,113 | $ | 20 | $ | 11,859 | ||||||||||
| $ | 5,478 | $ | 14,514 | $ | 8,113 | $ | 20 | $ | 11,859 | |||||||||||
|
December 31, 2023 |
Additions |
Recognized |
Translation |
September 30, 2024 |
||||||||||||||||
|
Media deposits |
$ | 4,460 | $ | 5,561 | $ | 4,992 | $ | (21 | ) | $ | 5,050 | |||||||||
| $ | 4,460 | $ | 5,561 | $ | 4,992 | $ | (21 | ) | $ | 5,050 | ||||||||||
The following tables provide the disaggregation of revenue into categories by nature for the nine months ended September 30, 2025 and 2024:
|
Media revenues |
Nine months ended September 30, |
|||||||
|
2025 |
2024 |
|||||||
|
Project revenues |
$ | 12,177 | $ | 11,117 | ||||
|
Media and services revenues |
25,933 | 22,718 | ||||||
|
Total media revenues |
$ | 38,110 | $ | 33,835 | ||||
|
Timing of revenue recognition |
Nine months ended September 30, |
|||||||
|
2025 |
2024 |
|||||||
|
Transferred at a point in time |
$ | 13,730 | $ | 12,560 | ||||
|
Transferred over time |
24,380 | 21,275 | ||||||
|
Total media revenues |
$ | 38,110 | $ | 33,835 | ||||
| DDC Group International Inc. d/b/a Cineplex Digital Media | |
| 2025 THIRD QUARTER REPORTS - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | (10) |
(expressed in thousands of Canadian dollars, except per share amounts)
6. Other costs
|
Nine months ended September 30, |
||||||||
|
2025 |
2024 |
|||||||
|
Variable rent |
$ | 3,004 | $ | 1,672 | ||||
|
Realty and occupancy taxes and maintenance fees |
134 | 123 | ||||||
|
Utilities |
37 | 36 | ||||||
|
Repairs and maintenance |
525 | 460 | ||||||
|
Advertising and promotion |
567 | 589 | ||||||
|
Office and operating supplies |
73 | 100 | ||||||
|
Licenses and franchise fees |
8 | 11 | ||||||
|
Insurance |
120 | 39 | ||||||
|
Professional and consulting fees |
68 | 51 | ||||||
|
Telecommunications and data |
169 | 198 | ||||||
|
Bad debts |
(24 | ) | (38 | ) | ||||
|
Other costs |
633 | 631 | ||||||
| $ | 5,314 | $ | 3,872 | |||||
7. Earnings (loss) per share
Basic
Basic earnings (loss) per share is calculated by dividing the net loss by the weighted average number of shares outstanding during the period.
|
Nine months ended September 30, |
||||||||
|
2025 |
2024 |
|||||||
|
Net loss |
$ | (4,742 | ) | $ | (6,070 | ) | ||
|
Weighted average number of shares outstanding |
12,742 | 12,742 | ||||||
|
Loss per share - basic |
$ | (372 | ) | $ | (476 | ) | ||
| DDC Group International Inc. d/b/a Cineplex Digital Media | |
| 2025 THIRD QUARTER REPORTS - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | (11) |
(expressed in thousands of Canadian dollars, except per share amounts)
8. Related party transactions
CDM earns revenue from the sale of advertising by its parent company, Cineplex Entertainment LP, on CDM's digital signage network. These transactions are conducted in the normal course of operations and are measured at market-based exchange amounts. A portion of CDM’s trade and other receivables, relates to amounts due from Cineplex, and revenue for digital out of home as shown below:
Nine months ended as of September 30, 2025
|
Cineplex |
||||
|
Trade and other receivables |
$ | 1,698 | ||
|
Revenue |
$ | 13,655 | ||
Nine months ended as of September 30, 2024
|
Cineplex |
||||
|
Trade and other receivables |
$ | 977 | ||
|
Revenue |
$ | 9,544 | ||
9. Changes in operating assets and liabilities
The following summarizes the changes in operating assets and liabilities:
|
Nine months ended September 30, |
||||||||
|
2025 |
2024 |
|||||||
|
Trade and other receivables |
$ | 1,570 | $ | (161 | ) | |||
|
Inventories |
860 | (1,212 | ) | |||||
|
Prepaid expenses and other current assets |
(1,612 | ) | (279 | ) | ||||
|
Accounts payable and accrued liabilities |
2,589 | 2,476 | ||||||
|
Income taxes receivable |
80 | 30 | ||||||
|
Deferred revenue |
6,338 | 562 | ||||||
|
Other liabilities |
(18 | ) | (217 | ) | ||||
| $ | 9,807 | $ | 1,199 | |||||
Property, equipment and leasehold purchases included in accounts payable and accrued liabilities as at September 30, 2025 are $326 (2024 - $364).
| DDC Group International Inc. d/b/a Cineplex Digital Media | |
| 2025 THIRD QUARTER REPORTS - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | (12) |
(expressed in thousands of Canadian dollars, except per share amounts)
10. Basis of presentation and accounting standards
Basis of preparation and measurement
CDM prepares its unaudited interim condensed consolidated financial statements in accordance with IFRS Accounting Standards applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires that management exercise judgment in applying CDM’s accounting policies. The disclosures contained in these unaudited interim condensed consolidated financial statements do not contain all requirements of IFRS Accounting Standards for annual consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024. These unaudited interim condensed consolidated financial statements follow the same accounting policies and methods of application as the audited financial statements for the year ended December 31, 2024, with the exception of accounting standards issued since December 31, 2024.
11. Subsequent events
On October 16, 2025, CELP announced it had entered into a definitive purchase agreement to sell 100% of the issued and outstanding shares of DDC Group International Inc., which operates the digital place-based media division through CDM. The CDM Sale Transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals and customary closing conditions, for cash proceeds of $70.0 million subject to customary post-closing adjustments.
| DDC Group International Inc. d/b/a Cineplex Digital Media | |
| 2025 THIRD QUARTER REPORTS - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | (13) |