NOTE 7—STOCKHOLDERS’ DEFICIT

Share Issuances

On December 6, 2024, the Company entered into a sales and registration agreement (the “Sales and Registration Agreement”) with Goldman Sachs & Co. LLC, from time to time acting in its capacity as (1) sales agent (in such capacity, the “Sales Agent”) or (2) the Forward Seller of any and all Hedging Shares offered by the Forward Counterparty under one or more Forwards (in each case, as defined below) relating to an aggregate of up to 50,000,000 shares of Common Stock of the Company.

In accordance with the terms of the Sales and Registration Agreement, the Company may issue and sell shares of Common Stock covered by the prospectus supplement at any time and from time to time through the Sales Agent. The Sales Agent may act as agent on the Company’s behalf or purchase shares of Common Stock from the Company as principal for its own account.

The Company also entered into a master confirmation (the “Master Confirmation”) with Goldman Sachs International (in its capacity as buyer under any Forward (as hereinafter defined), the “Forward Counterparty”) pursuant to which the Company entered into forward transactions (each a “Forward”), under which the Company agreed to sell the number of shares of Common Stock specified in such Forward (subject to adjustment as set forth therein) to the Forward Counterparty. In respect of each Forward, to enable the Forward Counterparty to establish a hedge position with respect to such Forward, the Company effectively pledged up to the maximum number of shares of Common Stock deliverable under such Forward (the “Hedging Shares”), and to establish a hedge position under such Forward, the Forward Counterparty rehypothecated and sold such maximum number of shares through Goldman Sachs & Co. LLC acting as the statutory underwriter (in such capacity, the “Forward Seller”) in an offering under a prospectus supplement and accompanying prospectus over a period of time agreed between the Company and the Forward Counterparty for such Forward (an “Initial Hedging Period”), all subject to the terms of the Sales and Registration Agreement.

On each trading day during the respective Initial Hedging Periods for each Forward, the Company instructed the Forward Counterparty on a day-by-day basis to sell a specified number of its shares, the total of each such trading day’s sales representing a component of such Forward (each a “Component”). The volume weighted average price per share for sales executed by the Forward Seller during the Initial Hedging Period for each Component (the “Reference Price”) was used to determine the floor price (“Forward Floor Price”) and cap price (“Forward Cap Price”) for such Component.

The Company was entitled to a prepayment (a “Prepayment”), calculated on a Component basis for each Forward, in an amount equal to the product of (i) the number of shares sold by the Forward Seller during the Initial Hedging Period for such Forward, (ii) the Forward Floor Price and (iii) the relevant prepayment percentage agreed for such Forward.

Each Forward was subject to a subsequent valuation period (the “Valuation Period”) that starts to run shortly after the outside date to the Initial Hedging Period agreed between the Company and the Forward Counterparty and ends on the final settlement date (the “Final Settlement Date”), subject to any acceleration of the scheduled maturity date of all or portion(s) of such Forward at the election of the Forward Counterparty. This Valuation Period determines the final settlement of the Forward Counterparty’s purchase price through a true-up payment from the Forward Counterparty to the Company if the total amount due under any such Forward exceeds the Prepayment (the “True-Up Payment”).

Pursuant to the agreements described above, the Company entered into Forwards to sell 30,000,000 shares of Common Stock in the aggregate with the respective Reference Prices in respect of each Component of such Forwards ranging from $4.01 to $4.71 per share of Common Stock.

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The Company evaluated the Forwards under ASC 815—Derivatives and Hedging and concluded that the transactions consist of a subscription receivable accounted for under ASC 505-10-45-2 reflecting the Company’s right to receive the Prepayment and deliver shares to the Forward Counterparty. Accordingly, pursuant to Regulation S-X 5-02.29, the Company recorded the Prepayment as an increase to additional paid in capital with an equal and offsetting subscription receivable as a decrease to additional paid in capital. The subscription receivable is considered a debt-like host and the Company’s right to receive additional cash consideration up to the Forward Cap Price based on the movement of the share price during the Valuation Period is an embedded feature that meets the definition of a derivative. Because the True-Up Payment can be received in cash or shares of Common Stock at the Company’s election and the value mechanics within the instrument are all indexed to the Company’s own Common Stock, the embedded feature meets the equity classification scope exception in ASC 815-40 and is not accounted for outside of equity.

In January 2025, the Company was paid $108.7 million for the Prepayments in respect of the Forwards. The Company reduced the subscription receivable which resulted in an increase in total additional paid in capital. The Valuation Period ended on March 17, 2025 with no True-Up Payment owed to the Company.

Additionally, during the three months ended March 31, 2025, the Company issued shares through an “at-the-market” offering. The below table summarizes the activity of the “at-the-market” offering during the three months ended March 31, 2025:

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As of January 15, 2025, all 50.0 million shares subject to the Sales and Registration Agreement had been sold.

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Stock-Based Compensation

Equity Incentive Plans

On June 5, 2024, the Company’s shareholders approved a new equity incentive plan (“2024 EIP”). Awards that may be granted under the 2024 EIP include options, stock appreciation rights, restricted stock awards, restricted stock units, cash awards, and other equity-based awards. The 2024 EIP will be unlimited in duration and, in the event of termination, will remain in effect as long as any shares of awards under it are outstanding and not fully vested.

The following table presents the stock-based compensation expense recorded within general and administrative: other:

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As of March 31, 2025, the estimated remaining unrecognized compensation cost related to stock-based compensation grants was approximately $25.7 million, which reflects assumptions related to attainment of performance targets based on the scales as described below. The weighted average period over which this remaining compensation expense is expected to be recognized is approximately 1.2 years.

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Special Awards

On February 19, 2025, the compensation committee of AMC’s Board of Directors (“Compensation Committee”) approved modification of the performance goals applicable to all 2024 Tranche Year PSU awards. This was accounted for as a modification to the 2024 Tranche Year PSU awards which lowered the Adjusted EBITDA performance target such that 146% vesting was achieved. This modification resulted in the immediate additional vesting of 270,093 2024 Tranche Year PSUs (4,181 cash settled units and 265,912 equity settled units). This was treated as a Type 3 modification (improbable-to-probable) which required the Company to recognize additional stock compensation expense based on the modification date fair values of the incremental PSUs. During the three months ended March 31, 2025, the Company recognized $1.0 million of stock compensation expense related to these awards.

On February 22, 2024, the Compensation Committee approved modification of the performance goals applicable to all 2023 Tranche Year PSU awards. This was accounted for as a modification to the 2023 Tranche Year PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both targets. This modification resulted in the immediate additional vesting of 478,055 2023 Tranche Year PSUs (21,829 cash settled units and 456,226 equity settled units). This was treated as a Type 3 modification (improbable-to-probable) which required the Company to recognize additional stock compensation expense based on the modification date fair values of the incremental PSUs. During the three months ended March 31, 2024, the Company recognized $2.1 million of stock compensation expense related to these awards.

Awards Granted

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On February 19, 2025, the Compensation Committee granted awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2024 EIP. Each RSU or PSU is convertible into one share of Common Stock upon vesting. Each RSU and PSU held by a participant as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Common Stock underlying the unit. Any such accrued dividend equivalents are paid to the holder only upon vesting of the units. Each unit represents the right to receive one share of Common Stock at a future date. The 2025 awards allow participants to continue to vest in their RSUs and PSUs in the ordinary course upon achieving certain conditions for retirement. As such, the end of the requisite service period for certain participants has been determined as the later of the award vesting date or the date the participant achieves the retirement conditions.

The awards generally had the following features:

The Compensation Committee establishes the annual performance targets at the beginning of each year. Therefore, in accordance with ASC 718, Compensation – Stock compensation, the grant date (and fair value measurement date) for each Tranche Year is the date at the beginning of each year when a mutual understanding of the key terms and conditions are reached.

The equity classified 2025 PSU award grant date fair value for the 2025 Tranche Year award of 1,216,944 units was approximately $4.3 million, the equity classified 2025 PSU award grant date fair value for the 2026 Tranche Year award of 108,323 units was $0.4 million, the equity classified 2024 PSU award grant date fair value for the 2025 Tranche Year award of 774,203 units was $2.8 million, and the equity classified 2023 PSU award grant date fair value for the 2025 Tranche Year award of 105,099 units was $0.4 million, measured using performance targets at 100%.

Liability Classified Awards

Certain PSUs are expected to be settled in cash and accordingly have been classified as liabilities within accrued expenses and other liabilities in the condensed consolidated balance sheets. The liability classified 2023 PSU awards for the 2025 Tranche Year were granted when the annual performance targets were set. The vesting requirements and vesting periods are identical to the equity classified awards described above. The Company recognizes expense related to these awards based on the fair value of the Common Stock shares, giving effect to the portion of services rendered during the requisite services period.

As of March 31, 2025, there were 25,588 nonvested underlying Common Stock RSUs and PSUs (measured at 100% attainment levels for both the Adjusted EBITDA and free cash flow targets) related to awards classified as liabilities.

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Nonvested Awards

The following table represents the equity classified nonvested RSU and PSU activity for the three months ended March 31, 2025:

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