TORONTO (CP) _ Giant-screen movie company Imax Corp. (TSX:IMX) saw its financial problems get a little bigger Friday as it postponed its annual report and said it will restate six years of results, recognizing accounting errors worth about US$2.5 million.

The 2006 earnings report was due Friday, but the company now expects to file by March 30, falling within the 15-day grace period allowed by regulators.

In an investor conference call, co-CEOs Richard Gelfond and Bradley Wechsler detailed the errors that were discovered while the company reviewed its financial statements for timing of revenue recognition.

The revisions include fees paid to a law firm that was hired to find theatre deals in Asia. The fees were listed as a "cost of goods sold" when the theatre installations were recognized. The Toronto-based company, which reports in U.S. dollars, will adjust its financial statements by $800,000.

Imax also incorrectly tracked marketing expenses for co-productions "Deep Sea 3-D" and "Magnificent Desolation," and listed certain costs as profits, amounting to $900,000 in adjustments.

The company also paid U.S. expense taxes in 2006 that should’ve been recognized as $250,000 each year from 2003 to 2005, totalling $750,000.

"We fully recognize that the delay in filing the 10-K (U.S. financial report) and the underlying causes are unacceptable and we are committed to improving our financial controls and systems," Wechsler said.

Imax is reviewing the errors with accounting firm PricewaterhouseCoopers LLP and will provide an update once it reaches a conclusion, it said.

A fourth-quarter conference call is scheduled for March 30.

Imax discovered the latest financial problems while combing through past reports as part of informal inquiries made by the U.S. Securities and Exchange Commission and the Ontario Securities Commission about its previous accounting recognition of revenues. The company noted that the two incidents are otherwise unrelated.

Imax is also facing shareholder civil suits claiming the company misled investors.

Last August, chief financial officer Frank Joyce abruptly resigned. Imax said he planned to leave the company months ago to pursue other interests.

The company has yet to hire a permanent replacement.

Last November, Imax stock tumbled 29 per cent to its lowest level in more than four years after the firm reported a US$12-million loss in the third quarter, missing analyst estimates by a wide margin.

Aside from the restatement, Imax logged a strong week of announcements, saying that it had installed seven theatre systems in the fourth quarter and signed for another nine systems.

The exhibitor wrapped up the year with about $27 million in cash and short-term investments.

Earlier this week, Imax entered a joint venture with exhibitor Regal Cinemas Inc. to install two giant-screen theatre systems, and signed a separate five-screen deal with a Kansas-based exhibitor.

The contracts came on the heels of blockbuster first-weekend results for the action film "300" which brought in $71 million across both conventional and giant screens. Imax posted weekend records on 48 of the 62 screens that were showing the film.

On the Toronto stock market Friday afternoon, Imax shares dipped five cents at $5.82. The 52-week high is $12.72 and the low is $3.78.

TORONTO, – IMAX Corporation and Kerasotes ShowPlace Theatres, North America’s sixth largest exhibitor, today announced an agreement to install an IMAX® theatre in the exhibitor’s flagship location, the ShowPlace 16 in Indianapolis, Indiana.

Expected to open in 2007, the new IMAX theatre will utilize IMAX MPX® technology and take advantage of Hollywood movies that have been digitally re-mastered into the unparalleled image and sound quality of The IMAX Experience®. Kerasotes ShowPlace Theatres currently operates 81 theatres with 685 screens in the USA. With this agreement, IMAX now has partnerships with seven of the top ten exhibitors in North America.

"IMAX theatres offer a unique and immersive cinematic experience that cannot be replicated at home or in any other type of theatre," said Tony Kerasotes, Chairman and CEO of Kerasotes ShowPlace Theatres. "The attractive economics of IMAX’s MPX theatre system will enable us to cost-effectively enter the IMAX theatre business and offer our customers Hollywood’s biggest titles in an exciting, premium format. We look forward to opening our first IMAX theatre in 2007 and hope to expand with more locations in the future."

"We are delighted to enter into a new partnership with one of North America’s leading, well-respected and innovative exhibitors," said IMAX co-Chairmen and co-CEOs Richard L. Gelfond and Bradley J. Wechsler. "Kerasotes ShowPlace Theatres is a welcome addition to the family of IMAX exhibitors, and we are excited to build on this relationship as we continue to implement our domestic growth strategy."

The new IMAX theatre will feature IMAX MPX technology. The IMAX MPX theatre system was designed specifically to enable multiplex operators to more cost effectively enter into the IMAX theatre business, either by retrofitting an existing stadium-seating auditorium or via an economical new build. The new IMAX theatre will be capable of playing Hollywood event films that have been digitally re-mastered into the unparalleled image and sound quality of The IMAX Experience, as well as original IMAX productions in 2D and IMAX® 3D.

TORONTO (CP) _ Widescreen theatre company Imax Corp. (TSX:IMX) took itself off the auction block Friday after failing to find a suitable buyer, saying it will focus instead on growing the company’s network and on strategic business initiatives.

The Toronto company, which been mulling a possible sale or merger since the spring, said after stock markets closed that finding a buyer wouldn’t enhance shareholder value at this time.

Instead, Imax’s board and management will focus on growth and other initiatives to increase the value of the troubled company.

"While Imax received interest from multiple parties in our process of exploring a potential sale or merger of the company, none ultimately indicated a willingness to acquire the company at an acceptable valuation," Imax co-chairmen and co-CEOs Richard Gelfond and Bradley Wechsler said in a release.

"As we reported at the end of this year’s third quarter, we are confident about our ability to profitably grow the global Imax network, and to succeed with our new business initiatives designed to expand the Imax footprint, such as our pursuit of joint venture opportunities around the world and our development of an Imax digital projector, targeted for introduction in 2008."

Imax decided to start looking for a possible buyer in March after "several unsolicited inquiries" prompted management to look at strategic alternatives. However, those efforts failed to produce a deal and racked up expenses that rose higher than the company had expected.

Two investment banks were authorized by the board’s special committee to explore interest among potential buyers, but at a lower price than previously sought by Imax.

Imax is also grappling with informal inquiries by the U.S. Securities and Exchange Commission and Ontario Securities Commission about its previous accounting recognition of revenues as well as shareholder civil suits claiming the company misled investors.

In November, the company’s stock hit a four-year low of $3.84 after reporting a US$12-million loss in its third quarter, when the company installed no new movie systems and financial results missed analyst estimates by a wide margin.

The Toronto-based company’s loss amounted to 30 cents per share, compared with a profit of $2.3 million or six cents per share in the third quarter of 2005.

Imax, which keeps its books in U.S. dollars, had said the loss resulted from a combination of disappointing box-office returns and soaring legal costs, while installations of theatre systems dropped to zero. Its quarterly revenue also fell 38 per cent to $20.7 million from $33.4 million.

Prior to the release Friday, Imax shares fell 15 cents, or three per cent, to C$4.68 on the Toronto Stock Exchange.

At the end of September, there were 280 Imax theatres operating in 40 countries