Class A common stock issuance. In December of 2020 and the first half of 2021, the Company entered into equity distribution agreements with sales agents to sell up to 241.6 million shares of the Company’s Class A common stock, par value $0.01 per share, through “at-the-market” offering programs. During the six months ended June 30, 2021, the Company raised gross proceeds of approximately $1,611.8 million related to the “at-the-market” offering programs and paid fees to the sales agents of approximately $40.3 million and other fees of $0.7 million. The Company intends to use the net proceeds from the sale of the Class A common stock pursuant to the equity distribution agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness or working capital, capital expenditures and other investments. The gross proceeds raised from the “at-the-market” sale of Class A common stock during the six months ended June 30, 2021 are summarized in the table below:

(1)

Included in the Class A common stock shares sold of 43.0 million was the reissuance of treasury stock shares of

approximately 3.7 million shares. Upon the sales of treasury stock, the Company reclassified amounts recorded in treasury stock to additional paid-in capital of $37.1 million and loss of $19.3 million to retained earnings.

(2)

On December 11, 2020, the Company entered into an equity distribution agreement with Goldman Sachs & Co. LLC and B. Riley Securities, Inc., as sales agents to sell up to 178.0 million shares of the Company’s Class A common stock, of which approximately 40.93 million shares of Class A common stock were sold and settled during December 2020 and approximately 137.07 million shares of Class A common stock were sold and settled during the six months ended June, 2021.

Class A common stock issuance to Mudrick. On June 1, 2021, the Company issued to Mudrick 8.5 million shares of the Company’s Class A common stock and raised gross proceeds of $230.5 million and paid fees of approximately $0.1 million related to this transaction. The Company issued the shares in reliance on an exemption from registration provided by section 4(a)(2) of the Securities Act of 1933. The Company intends to use the proceeds from the share sale primarily for the pursuit of value creating acquisitions of theatre assets and leases, as well as investments to enhance the consumer appeal of its theatres. In addition, with these funds, the Company intends to continue exploring deleveraging opportunities.

Class B common stock. On January 27, 2021, pursuant to the Stock Repurchase and Cancellation Agreement with Wanda dated as of September 14, 2018 and in connection with the Conversion of the Convertible Notes due 2026 into shares of the Company’s Class A common stock by Silver Lake and certain co-investors, 5,666,000 shares of the Company’s Class B common stock held by Wanda were forfeited and cancelled.

On February 1, 2021, Wanda exercised their right to convert all outstanding Class B common stock of 46,103,784 to Class A common stock, thereby reducing the number of outstanding Class B common stock to zero, which resulted in the retirement of Class B common stock. The Third Amended and Restated Certificate of Incorporation of the Corporation provides that Class B common stock may not be reissued by the Company.

Dividends. There were no dividends declared to stockholders during the six months ended June 30, 2021. The following is a summary of dividends and dividend equivalents declared to stockholders during the six months ended June 30, 2020:


			Amount per		Total Amount
			Share of		Declared
Declaration Date	Record Date	Date Paid	Common Stock		(In millions)
February 26, 2020	March 9, 2020	March 23, 2020	$	0.03	$	3.2

Related Party Transactions. As of June 30, 2021 and December 31, 2020, the Company recorded a receivable due from Wanda of $0 million and $0.7 million, respectively, for reimbursement of general administrative and other expense incurred on behalf of Wanda. For the three months ended June 30, 2021 and June 30, 2020, the Company recorded approximately $0 million and $0.1 million, respectively, of cost reductions for general and administrative services provided on behalf of Wanda. For the six months ended June 30, 2021 and June 30, 2020, the Company recorded approximately $0 million and $0.2 million, respectively, of cost reductions for general and administrative services provided on behalf of Wanda.

Stock-Based Compensation

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


	Three Months Ended				Six Months Ended
(In millions)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Board of director stock award expense	$	—	$	—	$	0.9	$	0.5
Restricted stock unit expense		3.5		3.0		5.7		5.0
Performance stock unit expense		3.4		—		4.2		—
Special performance stock unit expense		1.5		0.7		3.0		0.9
Total stock-based compensation expense	$	8.4	$	3.7	$	13.8	$	6.4

As of June 30, 2021, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $44.6 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 1.4 years.

Awards Granted in 2021

During the six months ended June 30, 2021, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan. The grant date fair value of these awards during the six months ended June 30, 2021 was based on the closing price of AMC’s Class A common stock on February 23, 2021 of $7.70 per share. 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 Class A common stock underlying the unit. Any such accrued dividend equivalents are paid to the holder upon vesting of the units. Each unit represents the right to receive one share of Class A common stock at a future date.

The 2021 award agreements generally had the following features:

●

Stock Award Agreement: On February 23, 2021, the Company granted awards of 124,054 fully vested shares of Class A common stock to its independent members of AMC’s Board of Directors with a grant date fair value of $0.9 million.

●

Restricted Stock Unit Award Agreement: On February 23, 2021, the Company granted RSU awards of 2,687,813 to certain members of management with a grant date fair value of $20.7 million. Each RSU represents the right to receive one share of Class A common stock at a future date. The RSUs vest over three years with 1/3 vesting in each year. These RSUs will be settled within 30 days of vesting.

●

Performance Stock Unit Award Agreement: On February 23, 2021, total PSUs of 2,687,813 were awarded (“2021 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches with each tranche allocated to a fiscal year within the performance period (“Tranche Year”). The PSUs within each Tranche Year are further divided between 2 performance targets; the Adjusted EBITDA performance target and free cash flow performance target. The 2021 PSU awards will vest based on achieving 80% to 120% of the performance targets with the corresponding vested unit amount ranging from 50% to 200%. If the performance targets are met at 100%, the 2021 PSU awards will vest at 2,687,813 units in the aggregate. No PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year’s Adjusted EBITDA and free cash flow targets. Additionally, vesting is subject to the participant’s continued employment through the end of the three-year cumulative period, ending on December 31, 2023. The vested PSUs will be settled within 30 days of vesting which will occur upon certification of performance results by the Compensation Committee of the Board of Directors.

The Compensation Committee establishes the annual performance targets at the beginning of each year, therefore, 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 per ASC 718, Compensation – Stock compensation. The 2021 PSU award grant date fair value on February 23, 2021 for the 2021 Tranche Year award of 895,836 units was approximately $6.9 million, measured using performance targets at 100%. In addition, the February 23, 2021 grant date fair value for the 2021 Tranche Year under the 2020 PSU award agreement of 438,244 units and the 2019 PSU award agreement of 181,916 units was approximately $3.4 million and $1.4 million, respectively, measured using performance targets at 100%. At June 30, 2021, the Company estimated that 2021 Tranche Year target performance conditions for the annual Adjusted EBITDA and free cash flow are expected to be achieved at 200% and 160%, respectively.

●

Special Performance Stock Unit (“SPSU”) Executive Award Agreement: In January 2021, the market condition requirement for SPSUs awarded in calendar year 2020 was met as a result of exceeding the 20-day trailing volume weighted average stock price threshold target for tranche 5 and tranche 6 of $4 and $8, respectively. The stock-based compensation costs for SPSUs are recorded on a straight-line basis through October 30, 2021, which is the end of the service requirement period.

The following table represents the nonvested RSU, PSU and SPSU activity for the six months ended June 30, 2021:


		Weighted
		Average
	Shares of RSU	Grant Date
	PSU and SPSU	Fair Value
Beginning balance at January 1, 2021 (1)	4,159,261	$	6.27
Granted (2)	4,864,460		7.70
Forfeited	(173,561)		11.91
Nonvested at June 30, 2021	8,850,160	$	6.95
Tranche Years 2022 and 2023 awarded under the 2021 PSU award with grant date fair values to be determined in years 2022 and 2023, respectively	1,791,977
Total Nonvested at June 30, 2021	10,642,137

(1)

Includes awards modified during 2020 where grant date fair value was not determined until 2021.

(2)

The number of PSU shares granted under the Tranche Year 2021 assumes the Company will attain a performance target at 200% for the Adjusted EBITDA target and 160% for the free cash flow target. The PSUs vest ratably based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 50% to 200% for Tranche Year 2021 awards granted under the 2021 and 2020 PSU award and 30% to 200% for Tranche Year 2021 awards granted under the 2019 PSU award.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Six Months Ended June 30, 2021


												Accumulated
	Class A Voting			Class B Voting			Additional					Other				Total AMC
	Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Accumulated		Stockholders’		Noncontrolling		Total
(In millions, except share and per share data)	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Income (Loss)		Deficit		Equity (Deficit)		Interests		Deficit
Balances December 31, 2020	172,563,249	$	1.8	51,769,784	$	0.5	$	2,465.6	3,732,625	$	(56.4)	$	38.7	$	(5,335.3)	$	(2,885.1)	$	26.9	$	(2,858.2)
Net loss	—		—	—		—		—	—		—		—		(566.9)		(566.9)		(0.3)		(567.2)
Other comprehensive loss	—		—	—		—		—	—		—		(51.0)		—		(51.0)		(0.2)		(51.2)
Baltics noncontrolling capital contribution	—		—	—		—		0.2	—		—		—		—		0.2		(4.0)		(3.8)
Class A common stock, accrued dividend equivalent adjustment	—		—	—		—		—	—		—		—		(0.1)		(0.1)		—		(0.1)
Class A common stock issuance	187,066,293		1.8	—		—		579.8	—		—		—		—		581.6		—		581.6
Wanda conversion of Class B shares to Class A shares	46,103,784		0.5	(46,103,784)		(0.5)		—	—		—		—		—		—		—		—
Convertible Notes due 2026 stock conversion	44,422,860		0.4	—		—		606.1	—		—		—		—		606.5		—		606.5
Wanda forfeit and cancellation of Class B shares	—		—	(5,666,000)		—		—	—		—		—		—		—		—		—
Taxes paid for restricted unit withholdings	—		—	—		—		—	—		—		—		—		—		—		—
Stock-based compensation	124,054		—	—		—		5.4	—		—		—		—		5.4		—		5.4
Balances March 31, 2021	450,280,240	$	4.5	—	$	—	$	3,657.1	3,732,625	$	(56.4)	$	(12.3)	$	(5,902.3)	$	(2,309.4)	$	22.4	$	(2,287.0)
Net loss	—		—	—		—		—	—		—		—		(343.6)		(343.6)		(0.4)		(344.0)
Other comprehensive income	—		—	—		—		—	—		—		21.4		—		21.4		—		21.4
100% liquidation of Baltics	—		—	—		—		—	—		—		(0.9)		—		(0.9)		(22.0)		(22.9)
Class A common stock, accrued dividend equivalent adjustment	—		—	—		—		—	—		—		—		(0.2)		(0.2)		—		(0.2)
Class A common stock issuance	54,550,000		0.5	—		—		951.6	(3,732,625)		56.4		—		(19.3)		989.2		—		989.2
Class A common stock issuance to Mudrick	8,500,000		0.1	—		—		230.3	—		—		—		—		230.4		—		230.4
Stock-based compensation	—		—	—		—		8.4	—		—		—		—		8.4		—		8.4
Balances June 30, 2021	513,330,240	$	5.1	—	$	—	$	4,847.4	—	$	—	$	8.2	$	(6,265.4)	$	(1,404.7)	$	—	$	(1,404.7)

Condensed Consolidated Statements of Stockholders’ Deficit

For the Six Months Ended June 30, 2020


												Accumulated
	Class A Voting			Class B Voting			Additional					Other				Total
	Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Accumulated		Stockholders’
(In millions, except share and per share data)	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Loss		Deficit		Equity (Deficit)
Balances December 31, 2019	52,080,077	$	0.5	51,769,784	$	0.5	$	2,001.9	3,732,625	$	(56.4)	$	(26.1)	$	(706.2)	$	1,214.2
Cumulative effect adjustment for the adoption of new accounting principle (ASU 2016-13)	—		—	—		—		—	—		—		—		(16.9)		(16.9)
Net loss	—		—	—		—		—	—		—		—		(2,176.3)		(2,176.3)
Other comprehensive loss	—		—	—		—		—	—		—		(93.5)		—		(93.5)
Dividends declared:
Class A common stock, $0.03/share, net of forfeitures	—		—	—		—		—	—		—		—		(1.6)		(1.6)
Class B common stock, $0.03/share	—		—	—		—		—	—		—		—		(1.6)		(1.6)
Taxes paid for restricted unit withholdings	—		—	—		—		(1.0)	—		—		—		—		(1.0)
Stock-based compensation	469,516		—	—		—		2.7	—		—		—		—		2.7
Balances March 31, 2020	52,549,593	$	0.5	51,769,784	$	0.5	$	2,003.6	3,732,625	$	(56.4)	$	(119.6)	$	(2,902.6)	$	(1,074.0)
Net loss	—		—	—		—		—	—		—		—		(561.2)		(561.2)
Other comprehensive income	—		—	—		—		—	—		—		56.0		—		56.0
Class A common stock, accrued dividend equivalent adjustment	—		—	—		—		—	—		—		—		0.1		0.1
Stock-based compensation	—		—	—		—		3.7	—		—		—		—		3.7
Balances June 30, 2020	52,549,593	$	0.5	51,769,784	$	0.5	$	2,007.3	3,732,625	$	(56.4)	$	(63.6)	$	(3,463.7)	$	(1,575.4)