AMC Entertainment Holdings (AMC) - Get Report, the largest U.S. theater chain, warned Tuesday that it could run out of cash by year's end or early next year as it struggles through the coronavirus pandemic.
Shares of the Leawood, Kan., company at last check were down 11% to $3.14.
AMC said in a regulatory filing that if attendance levels at its theaters do not significantly improve, or if does not gain access to additional sources of liquidity, "at the existing cash burn rate, the company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021."
"Due to these factors...substantial doubt exists about the company’s ability to continue as a going concern for a reasonable period of time," the company said.
Movie theaters and a vast number of other businesses were forced to close their doors at the outset of the pandemic in effort to curb the spread of the potentially fatal disease.
As of Oct. 16, AMC said it had resumed operations at 519 of its 598 U.S. theaters, with limited seating capacities of between 20% and 40%.
The company has served more than 2.6 million patrons since that date, down 85% from a year ago.
AMC said it entered into an agreement with Citigroup Global Markets and Goldman Sachs as sales agents to sell up to 15 million Class A common shares at 1 cent each from time to time, through a so-called at-the-market offering.
The company said it intended to use the proceeds of the sale for general purposes, including "repayment, refinancing, redemption or repurchase of existing indebtedness or working capital, capital expenditures and other investments."
AMC said on Monday that it would begin opening some movie theaters in New York state.
The announcement followed Gov. Andrew Cuomo's decision to allow theaters to reopen in some parts of the state as part of relaxed coronavirus protocols.
Earlier this month, Cineworld Group’s Regal Entertainment Holdings said it would temporarily suspend operations at all its American and British movie theaters.