AMC Entertainment (AMC) Risk Analysis

From January 1, 2020 through August 8, 2025, the outstanding shares of our Common Stock have increased by 507,735,553 shares (on a Reverse Stock Split adjusted basis) in a combination of at-the-market sales, forward sales, conversion of Series A Convertible Participating Preferred Stock, shareholder litigation settlement, conversion of Class B common stock, conversion of notes, exchanges of notes, transaction fee payments, and equity grant vesting. On March 14, 2023, the Company held a special meeting of our stockholders and obtained the requisite stockholder approval for the Charter Amendments (as defined herein) and on August 14, 2023, we filed the amendment to our Certificate of Incorporation implementing the Charter Amendments effective as of August 24, 2023. In accordance with the Charter Amendments, we increased the total number of authorized shares of Common Stock from 524,173,073 to 550,000,000 shares of Common Stock and effectuated a reverse stock split at a ratio of one share of Common Stock for every ten shares of Common Stock outstanding (the "Reverse Stock Split"). In accordance with the terms of the Certificate of Designations governing the Series A Convertible Participating Preferred Stock, following the effectiveness of the Charter Amendments all outstanding shares of our Series A Convertible Participating Preferred Stock converted into 99,540,642 shares of Common Stock. On July 22, 2024, the Company and certain of its subsidiaries consummated a series of refinancing transactions (the "2024 Refinancing Transactions") with certain lenders under the Company's existing senior secured term loans maturing 2026 (the "Existing Term Loans") and certain holders of its Second Lien Notes. As a part of the 2024 Refinancing Transactions, and certain subsequent open-market purchases of Existing Term Loans, the Company repurchased and/or exchanged all of its Existing Term Loans for new terms loans maturing in 2029 (the "New Term Loans") and repurchased $414.4 million of its Second Lien Notes. In connection with the 2024 Refinancing Transactions, Muvico, LLC, a newly formed wholly-owned subsidiary of the Company, issued $414.4 million aggregate principal amount of Existing Exchangeable Notes that are exchangeable into shares of Common Stock. On July 1, 2025, in connection with the 2025 Refinancing Transactions, the Company issued 79,800,000 shares of Common Stock in exchange for $143.0 million aggregate principal amount of Existing Exchangeable Notes. On July 24, 2025, the Company exchanged approximately $194.4 million aggregate principal amount of the remaining Existing Exchangeable Notes held by the Consenting Exchangeable Noteholders, on a dollar-for-dollar basis, for New Exchangeable Notes. The New Exchangeable Notes are not initially exchangeable into Common Stock but may become exchangeable subject to the authorization of a sufficient number of additional shares of our Common Stock. The principal amount of New Exchangeable Notes is subject to potential downward adjustment, depending on the trading price of the Company's Common Stock for a period following the initial exchange. If the outstanding Existing Exchangeable Notes were converted fully into shares of our Common Stock as of the date hereof, they would be converted into an aggregate of 21,400,346 shares of Common Stock. If the outstanding Existing Exchangeable Notes were converted fully into shares of our Common Stock at maturity, and we were to elect to issue additional Existing Exchangeable Notes as interest paid-in-kind ("PIK Notes") on such outstanding Existing Exchangeable Notes and PIK Notes to the full extent permitted during the life of the Existing Exchangeable Notes (without regard to any limitations on our authorized share capital or on the conversion therein and giving effect to the changes in the applicable make-whole fee over the period), such Existing Exchangeable Notes (including PIK Notes) would be convertible at maturity into an aggregate of 27,798,989 shares of Common Stock. In addition, the indenture governing the Existing Exchangeable Notes permits the issuance of up to an additional $50.0 million principal amount of Existing Exchangeable Notes. If such Existing Exchangeable Notes were issued (subject to any then limitations on authorized shares), these Existing Exchangeable Notes and any PIK Notes relating thereto would also be convertible into additional shares of our Common Stock. As of August 8, 2025 there were 512,943,561 shares of Common Stock issued and outstanding. We have no authorized shares of Common Stock remaining that have not been issued or reserved for issuance in connection with our Existing Exchangeable Notes and employee stock-based compensation plans. We expect to seek the requisite stockholder approval at the 2025 Annual Meeting of Stockholders on December 10, 2025, for the authorization of an additional number of authorized and unissued and unreserved shares of Common Stock, which may be used for at-the-market sales (subject to the caps on usage of at-the-market sales for the six months following the Required Shareholder Approval that the Company agreed to pursuant to the terms of the New Exchangeable Notes Indenture), exchanges of notes, private placement transactions, equity grant vesting and other dilutive issuances. Subject to any required stockholder authorization of additional Common Stock, we would expect to issue additional shares of Common Stock to raise cash to bolster our liquidity, to repay, refinance, redeem or exchange indebtedness (including expenses, accrued interest and premium, if any), for working capital, to finance strategic initiatives and future acquisitions, to settle conversion of the Existing Exchangeable Notes, including any PIK Notes, to settle conversion of the New Exchangeable Notes, or for other purposes. We may also issue preferred equity securities or securities convertible into, or exchangeable for, or that represent the right to receive, shares of Common Stock or acquire interests in other companies, or other assets by using a combination of cash and shares of Common Stock, or just shares of Common Stock. Additionally, vesting of outstanding awards pursuant to our current and legacy equity compensation programs results in the issuance of new shares of Common Stock, net of any shares withheld to cover tax withholding obligations upon vesting. Any of these events may significantly dilute the ownership interests of current stockholders, reduce our earnings per share or have an adverse effect on the price of our shares of Common Stock. If we were to not obtain the requisite stockholder approval to increase our authorized shares, this could create substantial risks, which could have an adverse effect on the market price of our Common Stock, including that: - we will be limited in our ability to issue equity to bolster our liquidity and respond to future challenges, including if revenues and attendance levels do not increase;- for future financing, we may be required to issue additional debt, which may be unavailable on favorable terms or at all, and which would exacerbate the challenges created by our high leverage;- we may be unable to issue currency in strategic transactions, including acquisitions, joint ventures or in connection with landlord negotiations, which may prevent us from entering into transactions that could increase shareholder value; and - the New 2029 Notes and New Exchangeable Notes contain features that cause our interest costs to increase if we do not obtain approval to increase our authorized shares.