FuboTV Inc. 10-K

Item 9A. Controls and Procedures. Report of Management on Internal Controls over Financial Reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. As of December 31, 2020, management completed an assessment of the Company’s internal control over financial reporting based on the 2013 Committee of Sponsoring Organizations (COSO) framework. We carried out an evaluation as required by paragraph (b) of Rule 13a-15 and 15d-15 of the Exchange Act, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2020. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2020 due to the material weaknesses in internal control over financial reporting described below: ● The Company did not have appropriately designed internal controls in place at the time the Merger was consummated on April 1, 2020 with respect to the accounting for the business combination and the allocation of consideration to the acquired assets and assumed liabilities, including deferred income taxes. ● The Company’s internal controls over the review of accounting considerations for non-routine transactions and events was not appropriately designed with respect to the timing and consistency of performance. Notwithstanding such material weaknesses in internal control over financial reporting, our management concluded that our consolidated financial statements in this Annual Report on Form 10-K present fairly, in all material respects, the company’s financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S. GAAP. 49 Management’s Remediation Plan In our Annual Report on Form 10-K/A for our fiscal year ended December 31, 2019, management identified material weaknesses in internal control over financial reporting. During 2020, management took steps to address the internal control deficiencies that contributed to the material weaknesses, including: ● Transitioned responsibility over the accounting function to the finance personnel of fuboTV Pre-Merger, including individuals with prior experience working for finance departments of public companies; ● Hired additional experienced finance and accounting personnel with technical accounting experience, supplemented by third-party resources; ● Documented and formally assessed our accounting and financial reporting policies and procedures, and implemented segregation of duties in key functions; ● Assessed significant accounting transactions and other technical accounting and financial reporting issues, prepared accounting memoranda addressing these issues and maintain these memoranda in our corporate records timely; ● Improved the compilation processes, documentation, and monitoring of our critical accounting estimates; and ● Implemented processes for creating an effective and timely close process. ● Engaged a third-party provider to perform internal audit services, including assessing and improving our internal controls for compliance with the Sarbanes-Oxley Act. We, with the oversight from the Audit Committee of the Board of Directors continue to implement the remediation plans for the aforementioned material weaknesses in internal control over financial reporting as follows: ● We will continue to hire additional accounting personnel with appropriate GAAP technical accounting expertise, as necessary. ● We are designing additional controls around identification, documentation, and application of technical accounting guidance with particular emphasis on complex and non-routine transactions. These controls are expected to include the implementation of additional supervision and review activities by qualified personnel, and the adoption of additional policies and procedures related to accounting and financial reporting. ● We are implementing specific procedures in the review of tax accounting, designed to enhance our income tax controls. ● We will continue to work with the third-party provider to strengthen our internal controls for compliance with the Sarbanes-Oxley Act. We believe that these actions and the improvements we expect to achieve, when fully implemented, will strengthen our internal control over financial reporting and remediate the remaining material weaknesses. We are committed to making further progress in our remediation efforts during 2021; however, if our remedial measures are insufficient to address the material weaknesses, or if one or more additional material weaknesses in our internal controls over financial reporting are discovered, we may be required to take additional remedial measures from our plan as disclosed above. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during our fourth quarter of 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None 50 Part III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this item is incorporated by reference to the definitive proxy statement to be filed with the SEC no later than 120 days after December 31, 2020 in connection with our 2021 annual meeting of shareholders (the “Proxy Statement”). Item 11. Executive Compensation The information required by this Item is incorporated herein by reference to our Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference to our Proxy Statement. Item 13. Certain Relationships and Related Transactions The information required by this Item is incorporated herein by reference to our Proxy Statement. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference to our Proxy Statement. PART IV Item 15. Exhibit and Financial Statement Schedules (a) Financial Statements. 51 fuboTV Inc. ( formerly known as FaceBank Group, Inc .) For the years ended December 31, 2020 and 2019 Index to the Consolidated Financial Statements Contents Page Reports of Independent Registered Public Accounting Firms F-1 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-5 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2020 and 2019 F-6 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2020 and 2019 F-7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019 F-8 Notes to the Consolidated Financial Statements F-10 52 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors fuboTV Inc. (formerly known as FaceBank Group, Inc.): Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of fuboTV Inc. and subsidiaries (the Company) as of December 31, 2020, the related consolidated statement of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. F- 1 Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Determination of the accounting acquirer As discussed in Notes 1 and 4 to the consolidated financial statements, effective April 1, 2020, in connection with an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), fuboTV Pre-Merger merged with and into a wholly owned subsidiary of FaceBank Pre-Merger (the Merger), with fuboTV Pre-Merger continuing as the surviving corporation and becoming a wholly owned subsidiary of FaceBank Group Inc. (the Company). Subsequent to the Merger, the Company changed its name from FaceBank Group Inc. to fuboTV Inc. The Company accounted for the Merger as a business combination and concluded that FaceBank Pre-Merger was the accounting acquirer based upon the terms of the Merger Agreement, and evaluation of a number of indicative factors. We identified the evaluation of the Company’s determination of the accounting acquirer to be a critical audit matter. A high degree of auditor judgment was required in evaluating the relative importance of the indicative factors, individually and in the aggregate, including the post combination voting rights, composition of the board of directors and management, the terms of the exchange, the relative size of the entities, minority voting rights, and the entity initiating the business combination. A different conclusion would result in a material difference in the accounting for the Merger. The following are the primary procedures we performed to address this critical audit matter. We tested the Company’s conclusions that FaceBank Pre-Merger was the accounting acquirer by: ● evaluating management’s assessment of the post combination voting rights, composition of the board of directors and management, the terms of the exchange, the relative size of the entities, minority voting interests, and the entity initiating the combination, by comparing them to the articles of incorporation and bylaws of the Company, investor presentations, the Merger Agreement, and board minutes of both FaceBank Pre-Merger, fuboTV Pre-Merger and the Company, and corroborating our understanding with internal legal counsel and the audit committee, ● inquiring of management of both FaceBank Pre-Merger and fuboTV Pre-Merger regarding the business purpose of the transaction and decisions regarding the appointment of board members, Valuation of certain acquired intangible assets As discussed in Notes 1 and 4 to the consolidated financial statements, effective April 1, 2020, fuboTV Pre-Merger merged with and into a wholly owned subsidiary of FaceBank Pre-Merger. The purchase price of $576.1 million was allocated to the net assets acquired, inclusive of intangible assets including tradenames and software and technology. The fair value of these intangible assets was $243.6 million as of the acquisition date, of which $219.9 million related to the tradenames and software and technology. The determination of the acquisition date fair value of these intangible assets was primarily based on significant inputs that are not observable in the market. We identified the assessment of the fair value measurement of the tradenames and software and technology intangible assets acquired in the Merger (certain intangible assets) as a critical audit matter. We identified certain key assumptions, including projected revenues and related growth rates, royalty rates, and discount rates, which were utilized to estimate the fair values of certain intangible assets, that required challenging auditor judgment. These key assumptions are especially challenging to audit as differences may result in material changes in the fair value of certain intangible assets. The primary procedures we performed to address the critical audit matter included the following. We evaluated the growth rates used by the Company to determine projected revenues by comparing them to certain industry benchmarks and publicly available data, as well as historical achievement. We involved valuation professionals with specialized skills and knowledge, who assisted in: ● evaluating the discount rates by comparing them to an independently developed range using publicly available market data for comparable entities; ● evaluating the royalty rates for certain intangible assets by comparing them to royalty rates from comparable licensing agreements within the industry; and ● developing an estimated range of fair values of certain intangible assets using the Company’s revenue projections and independently developed royalty rates and range of discount rates and comparing them to the Company’s fair value estimates. F- 2 Sufficiency of Audit Evidence over Subscriber Related Expenses As discussed in Note 3 to the consolidated financial statements, the Company recorded $204.2 million of subscriber related expenses during the year ended December 31, 2020, which primarily related to costs for affiliate distribution rights related to content streaming. The cost of affiliate distribution rights is generally incurred on a per subscriber basis and is recognized when the related programming is distributed to subscribers. The Company has certain arrangements whereby affiliate distribution rights are paid in advance or subject to minimum guaranteed payments. An accrual is established when actual affiliate distribution rights are expected to fall short of the minimum guaranteed amounts. We identified the sufficiency of audit evidence over subscriber related expenses attributable to affiliate distribution rights as a critical audit matter. This matter required subjective auditor judgment given the complexity of the affiliate distribution rights agreements and the Company’s determination of the charges based on its subscribers. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment in determining the nature and extent of procedures to be performed over subscriber related expenses, including cost for affiliate distribution rights. For a sample of affiliate distribution rights, we obtained and read the related affiliate distribution rights agreements and recalculated the subscriber expenses based upon the contractual inputs. We validated the per subscriber rates by agreeing them to the related contract. We independently developed an expected range of the number of monthly subscribers based on a combination of inputs such as cash received and published plan prices and assessed the subscriber count inputs to the calculation as compared to our expectation. If minimum subscriber counts were not met for the period, we recalculated the affiliate distribution rights agreements expenses for the period based on the contractual minimum guarantee. We evaluated the sufficiency of audit evidence obtained over subscriber related expenses by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence. /s/ KPMG LLP We have served as the Company’s auditor since 2020. New York, NY March 25, 2021 F- 3 REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS To the Shareholders and Board of Directors of FaceBank Group, Inc. (formerly known as Pulse Evolution Group, Inc.) and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of FaceBank Group, Inc. (formerly known as Pulse Evolution Group, Inc.) and Subsidiaries (the “Company”) as of December 31, 2019, the related consolidated statement of operations, stockholders’ equity and cash flows for the year ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ LJ Soldinger Associates, LLC Deer Park, IL May 29, 2020, except for the effects of the restatement as to which the date is August 10, 2020 We have served as the Company’s auditor in 2020. F- 4 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Consolidated Balance Sheets (in thousands, except for share and per share information) December 31, December 31, 2020 2019 ASSETS Current assets Cash $ 134,942 $ 7,624 Accounts receivable, net 17,495 8,904 Prepaid and other current assets 4,277 1,445 Total current assets 156,714 17,973 Property and equipment, net 1,771 335 Restricted cash 1,279 - Financial assets at fair value - 1,965 Intangible assets, net 216,449 116,646 Goodwill 478,406 227,763 Right-of-use assets 4,639 3,519 Other non-current assets 91 24 Total assets $ 859,349 $ 368,225 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 31,160 $ 36,373 Accrued expenses 126,393 20,402 Due to related parties - 665 Notes payable 4,593 4,090 Notes payable - related party - 368 Convertible notes, net of $710 discount as of December 31, 2019 - 1,358 Shares settled liability - 1,000 Deferred revenue 17,428 - Profit share liability - 1,971 Warrant liabilities 22,686 24 Derivative liability - 376 Long-term borrowings - current portion 24,255 - Current portion of lease liability 799 815 Total current liabilities 227,314 67,442 Deferred income taxes 5,100 30,879 Lease liability 3,859 2,705 Long-term borrowings - 43,982 Other long-term liabilities 128 41 Total liabilities 236,401 145,049 COMMITMENTS AND CONTINGENCIES (Note 17) Series D Convertible Preferred stock, par value $0.0001, 2,000,000 shares authorized, 0 and 461,839 shares issued and outstanding as of December 31, 2020 and 2019, respectively; aggregate liquidation preference of $0 and $462 as of December 31, 2020 and December 31, 2019, respectively - 462 Stockholders’ equity: Series AA Convertible Preferred stock, par value $0.0001, 35,800,000 shares authorized, 23,219,613 and 0 shares issued and outstanding as of December 31, 2020 and 2019, respectively 406,665 - Series X Convertible Preferred stock, par value $0.0001, 1,000,000 shares authorized, 0 and 1,000,000 shares issued and outstanding as of December 31, 2020 and 2019, respectively - - Common stock par value $0.0001: 400,000,000 shares authorized; 92,490,768 and 28,912,500 shares issued at December 31, 2020 and 2019, respectively; 91,690,768 and 28,912,500 shares outstanding at December 31, 2020 and 2019, respectively 9 3 Additional paid-in capital 853,824 257,002 Treasury stock, at cost, 800,000 shares at December 31, 2020 and no shares at December 31, 2019 - - Accumulated deficit (626,456 ) (56,123 ) Non-controlling interest (11,094 ) 22,602 Accumulated other comprehensive loss - (770 ) Total stockholders’ equity 622,948 222,714 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY $ 859,349 $ 368,225 The accompanying notes are an integral part of these consolidated financial statements. F- 5 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Consolidated Statements of Operations and Comprehensive Loss (in thousands, except for share and per share information) For the Years Ended December 31, 2020 2019 Revenues Subscriptions $ 184,328 $ - Advertisements 24,904 - Software licenses, net 7,295 4,271 Other 1,219 - Total revenues 217,746 4,271 Operating expenses Subscriber related expenses 204,240 - Broadcasting and transmission 29,542 - Sales and marketing 63,141 491 Technology and development 30,189 - General and administrative 77,635 13,302 Depreciation and amortization 43,972 20,765 Impairment of intangible assets and goodwill 248,926 8,598 Total operating expenses 697,645 43,156 Operating loss (479,899 ) (38,885 ) Other income (expense) Interest expense and financing costs (18,637 ) (2,062 ) Loss on extinguishment of debt (24,521 ) - Gain on sale of assets 7,631 - Loss on investments - (8,281 ) Unrealized gain in equity method investment 2,614 - Loss on deconsolidation of Nexway (11,919 ) - Change in fair value of warrant liabilities (83,338 ) - Change in fair value of subsidiary warrant liabilities - 4,504 Change in fair value of shares settled liability (1,665 ) - Change in fair value of derivative liability (426 ) 815 Change in fair value of profit share liability 1,971 (198 ) Foreign currency exchange loss (1,010 ) (18 ) Other income 147 726 Total other expense (129,153 ) (4,514 ) Loss before income taxes (609,052 ) (43,399 ) Income tax benefit 9,660 5,272 Net loss (599,392 ) (38,127 ) Less: net loss attributable to non-controlling interest 29,059 3,767 Net loss attributable to controlling interest (570,333 ) $ (34,360 ) Less: Deemed dividend on Series D Preferred stock - (9 ) Less: Deemed dividend - beneficial conversion feature on preferred stock (171 ) (589 ) Net loss attributable to common stockholders $ (570,504 ) $ (34,958 ) Other comprehensive loss Foreign currency translation adjustment - (770 ) Comprehensive loss $ (570,504 ) $ (35,728 ) Net loss per share attributable to common stockholders Basic and diluted $ (12.82 ) $ (1.57 ) Weighted average shares outstanding: Basic and diluted 44,492,975 22,286,060 The accompanying notes are an integral part of these consolidated financial statements. F- 6 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Consolidated Statements of Stockholders’ Equity For the years ended December 31, 2020 and 2019 (in thousands except for share information) Accumulated Additional Other Total Preferred stock Common Stock Paid-In Treasury Stock Accumulated Comprehensive Noncontrolling Stockholders’ Shares Amount Shares Amount Capital Shares Amount Deficit Loss Interest Equity Balance at January 1, 2019 1,000,000 $ - 7,532,777 $ 1 $ 227,570 - $ - $ (21,763 ) $ - $ 26,742 $ 232,550 Issuance of common stock for cash - - 1,028,497 - 2,526 - - - - - 2,526 Issuance of common stock for cash - Hong Kong investor - - 93,910 - 1,063 - - - - - 1,063 Preferred stock converted to common stock (1,000,000 ) - 15,000,000 1 (1 ) - - - - - - Common stock issued for lease settlement - - 18,935 - 130 - - - - - 130 Issuance of subsidiary common stock for cash - - - - 92 - - - - - 92 Additional shares issued for reverse stock split - - 1,373 - - - - - - - - Acquisition of Facebank AG and Nexway - - 2,500,000 - 19,950 - - - - 3,582 23,532 Issuance of common stock - subsidiary share exchange - - 2,503,333 1 3,954 - - - - (3,955 ) - Issuance of common stock for services - - 35,009 - 302 - - - - - 302 Issuance of common stock in connection with cancellation of a consulting agreement - - 2,000 - 13 - - - - - 13 Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock - - - - (589 ) - - - - - (589 ) Deemed dividend on Series D preferred stock - - - - (9 ) - - - - - (9 ) Accrued Series D Preferred stock dividends - - - - (14 ) - - - - - (14 ) Common stock issued in connection with note payable - - 5,000 - 47 - - - - - 47 Issuance of common stock in connection with Panda Investment - - 175,000 - 1,918 - - - - - 1,918 Issuance of common stock in connection with note conversion - - 16,666 - 50 - - - - - 50 Foreign currency translation adjustment - - - - - - - - (770 ) - (770 ) Net loss - - - - - - - (34,360 ) - (3,767 ) (38,127 ) Balance at December 31, 2019 (As restated) - $ - 28,912,500 $ 3 $ 257,002 - $ - $ (56,123 ) $ (770 ) $ 22,602 $ 222,714 Issuance of common stock for cash - - 22,664,464 2 203,262 - - - - - 203,264 Issuance of common stock and warrants for cash - - 9,119,066 2 43,097 - - - - - 43,099 Issuance of common stock - subsidiary share exchange - - 2,753,819 - 2,042 - - - - (2,042 ) - Common stock issued in connection with note payable - - 70,500 - 259 - - - - - 259 Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock - - - - (171 ) - - - - - (171 ) Accrued Series D Preferred Stock dividends - - - - (17 ) - - - - - (17 ) Deconsolidation of Nexway - - - - - - - - 770 (2,595 ) (1,825 ) Right to receive Series AA Preferred Stock in connection with acquisition of fuboTV Merger 32,324,362 566,124 - - - - - - - - 566,124 Conversion of Series AA Preferred Stock (9,104,749 ) (159,459 ) 18,209,498 2 159,457 - - - - - - Settlement of share settled liability - - 900,000 - 9,097 - - - - - 9,097 Redemption of redemption feature of convertible preferred stock - - - - 132 - - - - - 132 Issuance of common stock to original owners of Facebank AG - - 1,200,000 - 12,395 - - - - - 12,395 Exercise of common stock warrants - - 5,843,600 - 99,817 - - - - - 99,817 Exercise of stock options - - 1,418,532 - 2,178 - - - - - 2,178 Reclassification of warrant liabilities - - - - 13,535 - - - - - 13,535 Repurchase of common stock - - - - - (800,000 ) - - - - - Stock-based compensation - - 1,398,789 - 51,739 - - - - - 51,739 Net loss - - - - - - - (570,333 ) - (29,059 ) (599,392 ) Balance at December 31, 2020 23,219,613 $ 406,665 92,490,768 $ 9 $ 853,824 (800,000 ) $ - $ (626,456 ) $ - $ (11,094 ) $ 622,948 The accompanying notes are an integral part of these consolidated financial statements. F- 7 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Consolidated Statements of Cash Flows (in thousands, except for share and per share information) For the Years Ended December 31, 2020 2019 Cash flows from operating activities Net loss $ (599,392 ) $ (38,127 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 43,972 20,765 Stock-based compensation 50,739 1,118 Impairment expense intangibles 100,304 8,598 Impairment expense goodwill 148,622 - Issuance of common stock in connection with cancellation of a consulting agreement - 13 Issuance of common stock for services rendered - 302 Non-cash expense relating to issuance of warrants and common stock 2,209 - Loss on deconsolidation of Nexway, net of cash retained by Nexway 8,564 - Common stock issued in connection with note payable 67 47 Loss on extinguishment of debt 24,521 - Loss on investments - 8,281 Gain on sale of assets (7,631 ) - Amortization of debt discount 12,327 603 Deferred income tax benefit (9,660 ) (5,272 ) Change in fair value of derivative liability 426 (815 ) Change in fair value of warrant liability 83,338 - Change in fair value of subsidiary warrant liability - (4,504 ) Change in fair value of shares settled liability 1,665 - Change in fair value of profit share liability (1,971 ) 198 Unrealized gain on equity method investments (2,614 ) - Amortization of right-of-use assets 681 200 Accrued interest on note payable 246 658 Foreign currency exchange loss 1,010 (770 ) Other income related to note conversion - (50 ) Other adjustments (620 ) (1,304 ) Changes in operating assets and liabilities of business, net of acquisitions: Accounts receivable (12,591 ) 7,705 Prepaid expenses and other current assets (2,141 ) (227 ) Accounts payable (39,141 ) 5,476 Accrued expenses 40,761 (964 ) Due to related parties (665 ) - Deferred revenue 8,619 - Lease liability (663 ) (200 ) Net cash used in operating activities (149,018 ) 1,731 Cash flows from investing activities Purchases of property and equipment (166 ) - Advance to fuboTV Pre-Merger (10,000 ) - Acquisition of fuboTV’s Pre-Merger cash and cash equivalents and restricted cash 9,373 - Sale of Facebank AG (619 ) - Investment in Panda Productions (HK) Limited - (1,000 ) Acquisition of FaceBank AG and Nexway, net of cash paid - 2,300 Sale of profits interest in investment in Panda Productions (HK) Limited - 655 Purchase of intangible assets (45 ) (250 ) Payments for leasehold improvements - (175 ) Lease security deposit - (21 ) Net cash (used in) provided by investing activities (1,457 ) 1,509 The accompanying notes are an integral part of these consolidated financial statements. F- 8 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Consolidated Statements of Cash Flows (Continued) (in thousands, except for share and per share information) For the Years Ended December 31, 2020 2019 Cash flows from financing activities Proceeds from sale of common stock and warrants, net of fees 278,883 3,589 Proceeds from exercise of stock options 2,178 - Proceeds from issuance of preferred stock - 700 Proceeds from issuance of convertible notes 3,003 847 Proceeds from the exercise of common stock warrants 1,685 - Repayments of convertible notes (3,913 ) (541 ) Proceeds from issuance of Series D preferred stock 203 - Redemption of Series D preferred stock (883 ) (337 ) Proceeds from loans 33,649 - Repayments of notes payable (35,400 ) (264 ) Proceeds from sale of subsidiary’s common stock - 92 Proceeds from related parties - 423 Repayments to related parties (333 ) (156 ) Net cash provided by financing activities 279,072 4,353 Net increase in cash and restricted cash 128,597 7,593 Cash at beginning of year 7,624 31 Cash and restricted cash at end of year $ 136,221 $ 7,624 Supplemental disclosure of cash flows information: Interest paid $ 5,372 $ 170 Income tax paid $ - $ - Non-cash financing and investing activities: Right to receive Series AA Preferred Stock in connection with acquisition of fuboTV Merger $ 566,124 $ - Conversion of Series AA preferred stock to common stock $ 159,459 $ - Reclassification of warrant liabilities to equity $ 13,535 $ - Shares settled liability for intangible asset - Floyd Mayweather $ - $ 1,000 Reclass of shares settled liability for intangible asset to stock-based compensation $ 1,000 $ - Settlement of share settled liability $ 9,097 $ - Issuance of common stock to original owners of Facebank AG $ 12,395 $ - Issuance of common stock - subsidiary share exchange $ 2,042 $ - Deconsolidation of Nexway $ 1,825 $ - Cashless exercise of common stock warrants $ 98,132 $ - Unpaid financing costs included in accounts payable $ 772 $ - Issuance of common stock in connection with Panda Investment $ - $ 1,918 Common stock issued in connection with note payable $ 259 $ - Issuance of common stock in connection with note conversion $ - $ 50 Issuance of common stock upon acquisition of Facebank AG and Nexway $ - $ 19,950 Long-term borrowings related to investment $ - $ 5,443 Accrued Series D Preferred Stock dividends $ 17 $ 14 Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock $ 171 $ 589 Common stock issued for lease settlement $ - $ 130 Measurement period adjustment on the Evolution AI Corporation acquisition $ - $ 1,921 F- 9 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 1 – Organization and Nature of Business Incorporation fuboTV Inc. (“fuboTV” or the “Company”) was incorporated under the laws of the State of Florida in February 2009 under the name York Entertainment, Inc. The Company changed its name to FaceBank Group, Inc. on September 30, 2019. On August 10, 2020, the Company changed its name to fuboTV Inc. and as of May 1, 2020, the Company’s trading symbol was changed to from “FBNK” to “FUBO.” On October 8, 2020, the Company sold 18,300,000 shares of its common stock in a public offering at $10.00 per share generating $170.2 million in proceeds, net of offering costs. On October 22, 2020, the investment bankers exercised their right to purchase an additional 1,406,708 shares of the Company’s common stock at $10.00 per share generating an additional $13.1 million in proceeds, net of offering costs. In connection with this offering, the Company’s common stock was approved for listing on The New York Stock Exchange (the “ NYSE ”) under the symbol “FUBO” and commenced trading on the NYSE on October 8, 2020. Unless the context otherwise requires, “fuboTV,” “we,” “us,” “our,” and the “Company” refers to fuboTV and its subsidiaries on a consolidated basis, and “fuboTV Pre-Merger” refers to fuboTV Inc., a Delaware corporation, prior to the Merger, and “fuboTV Sub” refers to fuboTV Media Inc., a Delaware corporation, and the Company’s wholly-owned subsidiary following the Merger. “FaceBank Pre-Merger” refers to FaceBank Group, Inc. prior to the Merger and its subsidiaries prior to the closing of the Merger. Merger with fuboTV Pre-Merger On April 1, 2020 (the “Effective Time”), fuboTV Acquisition Corp., a Delaware corporation and FaceBank Pre-Merger’s wholly-owned subsidiary (“Merger Sub”) merged with and into fuboTV Pre-Merger, whereby fuboTV Pre-Merger continued as the surviving corporation and became our wholly-owned subsidiary pursuant to the terms of the Agreement and Plan of Merger and Reorganization dated as of March 19, 2020, by and among us, Merger Sub and fuboTV Pre-Merger (the “Merger Agreement” and such transaction, the “Merger”) (See Note 4). In accordance with the terms of the Merger Agreement, at the Effective Time of the Merger, all of the capital stock of fuboTV Pre-Merger was converted into shares of our newly-created class of Series AA Convertible Preferred Stock, par value $0.0001 per share (the “Series AA Preferred Stock”) (See Note 16). Each share of Series AA Convertible Preferred Stock is entitled to 0.8 votes per share and is convertible into two shares of our common stock, only in connection with the sale of such shares on an arms’-length basis either pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act or pursuant to an effective registration statement under the Securities Act. Prior to our uplist to the NYSE, the Series AA Convertible Preferred Stock benefited from certain protective provisions that, for example, required us to obtain the approval of a majority of the shares of outstanding Series AA Convertible Preferred Stock, voting as a separate class, before undertaking certain matters. Prior to the Merger, the Company was, and after the Merger continues to be, in part, a character-based virtual entertainment business and a developer of digital human likeness for celebrities, focused on applications in traditional entertainment, sports entertainment, live events, social networking, mixed reality (AR/VR) and artificial intelligence. As a result of the Merger, fuboTV Pre-Merger, a leading live TV streaming platform for sports, news, and entertainment, became a wholly-owned subsidiary of the Company. In connection with the Merger, on March 11, 2020, the Company and HLEE Finance S.a.r.l (“HLEE”) entered into a Credit Agreement, dated as of March 11, 2020, pursuant to which HLEE provided the Company with a $100.0 million revolving line of credit (the “Credit Facility”). The Credit Facility was secured by substantially all the assets of the Company. The Credit Facility was terminated on July 8, 2020. On March 19, 2020, the Company, Merger Sub, Evolution AI Corporation (“EAI”) and Pulse Evolution Corporation (“PEC” and collectively with EAI, Merger Sub and the Company, the “Initial Borrower”) and FB Loan Series I, LLC (“FB Loan”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”), pursuant to which the Initial Borrower sold to FB Loan senior secured promissory notes in an aggregate principal amount of $10.1 million (the “Senior Notes”). The Company received proceeds of $7.4 million, net of an original issue discount of $2.7 million. In connection with the FB Loan, the Company, fuboTV Sub and certain of their respective subsidiaries granted a lien on substantially of their assets to secure the obligations under the Senior Notes. See Note 12 for more information about the Note Purchase Agreement. F- 10 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Prior to the Merger, fuboTV Pre-Merger and its subsidiaries were party to a Credit and Guaranty Agreement, dated as of April 6, 2018 (the “AMC Agreement”), with AMC Networks Ventures LLC as lender, administrative agent, and collateral agent (“AMC Networks Ventures”). fuboTV Pre-Merger previously granted AMC Networks Ventures a lien on substantially all of its assets to secure its obligations thereunder. The AMC Agreement survived the Merger and, as of the Effective Time, there was $23.6 million outstanding under the AMC Agreement, net of debt issuance costs. In connection with the Merger, the Company guaranteed the obligations of fuboTV Pre-Merger under the AMC Agreement on an unsecured basis. The liens of AMC Networks Ventures on the assets of fuboTV Pre-Merger are senior to the liens in favor of FB Loan and FaceBank Pre-Merger securing the Senior Notes. Nature of Business after the Merger Prior to the Merger, the Company focused on developing its technology-driven IP in sports, movies, and live performances. Since the acquisition of fuboTV Pre-Merger, we are principally focused on offering consumers a leading live TV streaming platform for sports, news, and entertainment through fuboTV. The Company’s revenues are almost entirely derived from the sale of subscription services and the sale of advertisements in the United States. Our subscription-based streaming services are offered to consumers who can sign-up for accounts through which we provide basic plans with the flexibility for consumers to purchase the best Attachments suited for them. Besides the website, consumers can also sign-up via some TV-connected devices. The fuboTV platform provides a broad suite of unique features and personalization tools such as multi-channel viewing capabilities, favorites lists and a dynamic recommendation engine as well as 4K streaming and Cloud DVR offerings. Note 2 - Liquidity, Going Concern and Management Plans The accompanying audited consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The Company had cash and cash equivalents of $134.9 million, a working capital deficiency of $70.6 million and an accumulated deficit of $626.5 million as of December 31, 2020. The Company incurred a $599.4 million net loss for the year ended December 31, 2020. Since inception, the Company’s operations have been financed primarily through the sale of equity and debt securities. The Company has incurred losses from operations and negative cash flows from operating activities since inception and expects to continue to incur substantial losses as it continues to fully ramp up its operating activities. While we expect to continue incurring losses in the foreseeable future, we successfully raised $181.0 million in October 2020, net of offering expenses, through a public offering of our common stock. On February 2, 2021, the Company issued $402.5 million of convertible notes (“2026 Notes”) dated February 2, 2021. The 2026 Notes will bear interest from February 2, 2021 at a rate of 3.25% per annum, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2021. The 2026 Notes will mature on February 15, 2026, unless earlier converted, redeemed, or repurchased. The net proceeds from this offering were approximately $391.4 million, after deducting a discount and estimated offering expenses payable by the Company. The Company intends to use the proceeds from this offering for general corporate purposes, including working capital, business development, sales and marketing activities and capital expenditures. The net proceeds from the public sale of common stock and the issuance of the 2026 Notes provide us with the necessary liquidity to continue as a going concern for at least one year from the date of these financial statements. In addition to the foregoing, the Company cannot predict the long-term impact on its development timelines, revenue levels and its liquidity due to the worldwide spread of COVID-19. Based upon the Company’s current assessment, it does not expect the impact of the COVID-19 pandemic to materially impact the Company’s operations. However, the Company is continuing to assess the impact the spread of COVID-19 may have on its operations. F- 11 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 3 - Summary of Significant Accounting Policies and Basis of Presentation Principles of Consolidation and Basis of Presentation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP” or “U.S. GAAP”). The Company’s consolidated financial statements include the accounts of the Company and the accounts of the Company’s wholly-owned subsidiaries and non-wholly owned subsidiaries where the Company has a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on the previously reported financial position or results of operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. The significant estimates and assumptions include allocating the fair value of purchase consideration to assets acquired and liabilities assumed in business acquisitions, useful lives of property and equipment and intangible assets, recoverability of goodwill, long-lived assets, and investments, accruals for contingent liabilities, valuations of derivative liabilities and warrants, equity instruments issued in share-based payment arrangements and accounting for income taxes, including the valuation allowance on deferred tax assets. Segment and Reporting Unit Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. A committee consisting of the Company’s executives are determined to be the CODM. The CODM reviews financial information and makes resource allocation decisions at the consolidated group level. As such, the Company has one operating segment (fuboTV) as of December 31, 2020. Cash and Cash Equivalents The Company considers all highly liquid investments with remaining maturities at the date of purchase of three months or less to be cash equivalents, including balances held in the Company’s money market account. The Company also classifies amounts in transit from payment processors for customer credit card and debit card transactions as cash equivalents. Restricted cash primarily represents cash on deposit with financial institutions in support of a letter of credit outstanding in favor of the Company’s landlord for office space. The restricted cash balance has been excluded from the cash balance and is classified as restricted cash on the consolidated balance sheets. The following table provides a reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheet that sum to the total of the same on the consolidated statement of cash flows: December 31, 2020 2019 Cash and cash equivalents $ 134,942 $ 7,624 Restricted cash 1,279 - Total cash, cash equivalents and restricted cash $ 136,221 $ 7,624 F- 12 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Certain Risks and Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of demand deposits. The Company maintains cash deposits with financial institutions that at times exceed applicable insurance limits. The majority of the Company’s software and computer systems utilize data processing, storage capabilities and other services provided by Amazon Web Services, or AWS, which cannot be easily switched to another cloud service provider. As such, any disruption of the Company’s interference with AWS would adversely impact the Company’s operations and business. Fair Value Estimates The carrying amounts of the Company’s financial assets and liabilities, such as cash, other assets, accounts payable and accrued payroll, approximate their fair values because of the short maturity of these instruments. The carrying amounts of notes payable and long-term borrowings approximate their fair values due to the short-term maturity and the fact that the effective interest rates on these obligations are comparable to market interest rates for instruments of similar credit risk. Fair Value of Financial Instruments The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. Accounts Receivable, net The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectable accounts. The Company’s accounts receivable balance consists of amounts due from the sale of advertisements and subscription revenue. In evaluating our ability to collect outstanding receivable balances, we consider many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased. Based on the Company’s current and historical collection experience, management concluded that an allowance for doubtful accounts was not necessary as of December 31, 2020 and 2019. No individual customer accounted for more than 10% of revenue for the year ended December 31, 2020 and 2019. As of December 31, 2020, three customers accounted for more than 10% of accounts receivable. No customers accounted for more than 10% of accounts receivable as of December 31, 2019. Property and Equipment, Net Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive loss in the period realized. Maintenance and repairs are expensed as incurred. F- 13 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Impairment Testing of Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. Acquisitions and Business Combinations The Company allocates the fair value of purchase consideration issued in business combination transactions to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from: (a) acquired technology, (b) trademarks and trade names, and (c) customer relationships, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. The allocation of the purchase consideration may remain preliminary as the Company gathers additional facts about the circumstances that existed as of the acquisition date during the measurement period. The measurement period shall not exceed one year from the acquisition date. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill The Company tests goodwill for impairment at the reporting unit level on an annual basis on December 31 for each fiscal year or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a single reporting unit is less than its carrying amount under ASU No. 2017-04, Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment, issued by the FASB. If it is determined that the fair value is less than its carrying amount, the excess of the goodwill carrying amount over the implied fair value is recognized as an impairment loss. During the third quarter of 2020, the Company recognized an impairment charge of $148.1 million for the Facebank reporting unit which represented all of the goodwill of that reporting unit. The Company tested goodwill for impairment as of December 31, 2020 and 2019. There were no goodwill impairment charges recorded as of December 31, 2020 and 2019. Changes in economic and operating conditions and the impact of COVID-19 could result in goodwill impairment in future periods. Intangible Assets The Company’s intangible assets represent definite lived intangible assets, which are being amortized on a straight- line basis over their estimated useful lives as follows: Customer relationships 2 years fuboTV tradename 9 years Software and technology 9 years Non-Controlling Interest Non-controlling interest as of December 31, 2020 represents PEC stockholders who retained an aggregate 26% interest in that entity following the Company acquisition of Evolution AI Corporation. Non-controlling interest is adjusted for the non-controlling interest holders’ proportionate share of the earnings or losses even if loss allocations result in a deficit non-controlling interest balance. F- 14 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Sequencing On July 30, 2019, the Company adopted a sequencing policy under ASC 815-40-35 whereby in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy. As of September 25, 2020, the Company repaid all of its convertible notes with variable settlement features. As a result of these repayments, the Company is no longer subject to this sequencing policy. Warrant Liability The Company accounts for common stock warrants with cash settlement features as liability instruments at fair value. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statements of operations. The fair value of liabilities classified as warrants has been estimated using the Black-Scholes model. Leases Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheets as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less, if any, from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term. Revenue From Contracts With Customers The Company recognizes revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers (the “revenue standard”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation F- 15 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements In 2020, the Company generated revenue from the following sources: 1. Subscriptions – The Company sells various subscription plans through its website and third-party app stores. These subscription plans provide different levels of streamed content and functionality depending on the plan selected. Subscription fees are fixed and paid in advance by credit card on primarily on a monthly basis. A subscription customer executes a contract by agreeing to the Company’s terms of service. The Company considers the subscription contract legally enforceable once the customer has accepted terms of service and the Company has received credit card authorization from the customer’s credit card company. The terms of service allow customers to terminate the subscription at any time, however, in the event of termination, no prepaid subscription fees are refundable. The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised services to the customers, which is ratably over the subscription period. Upon the customer agreeing to the Company’s terms and conditions and authorization of the credit card, the customer simultaneously receives and consumes the benefits of the streamed content ratably throughout the term of the contract. Subscription services sold through third-party app stores are recorded gross in revenue with fees to the third-party app stores recorded in subscriber related expenses in the consolidated statement of operations. Management concluded that the customers are the end user of the subscription services sold by these third-party app stores. 2. Advertisements – The Company executes agreements with advertisers that want to display ads (“impressions”) within the streamed content. The Company enters into individual insertion orders (“IOs”) with advertisers, which specify the term of each ad campaign, the number of impressions to be delivered and the applicable rate to be charged. The Company invoices advertisers monthly for impressions actually delivered during the period. Each executed IO provides the terms and conditions agreed to in respect of each party’s obligations. The Company recognizes revenue at a point in time when it satisfies a performance obligation by transferring control of the promised services to the advertiser, which generally is when the advertisement has been displayed. 3. Software licenses, net – Revenue from the sale of third-party software licenses are recognized as a single performance obligation at the point in time that the software license is delivered to the customer. The Company under its contracts is required to provide its customers with 30 days to return the license for a full refund, regardless of reason, and the Company will be provided a refund in full of its cost to sell the license. Therefore, for Nexway, the Company acts as an agent and recognizes revenue on a net basis. As a result of the deconsolidation of Nexway which was effective as of March 31, 2020, the Company no longer generates revenue from the sale of third-party software licenses. (See Note 7) 4. Other – The Company has an annual contract to sub-license its rights to broadcast certain international sporting events to a third party. The Company recognizes revenue under this contract at a point in time when it satisfies a performance obligation by transferring control of the promised services to the third party, which generally is when the third party has access to the programming content. Subscriber Related Expenses Subscriber related expenses consist primarily of affiliate distribution rights and other distribution costs related to content streaming. The cost of affiliate distribution rights is generally incurred on a per subscriber basis and is recognized when the related programming is distributed to subscribers. The Company has certain arrangements whereby affiliate distribution rights are paid in advance or are subject to minimum guaranteed payments. An accrual is established when actual affiliate distribution costs are expected to fall short of the minimum guaranteed amounts. To the extent actual per subscriber fees do not exceed the minimum guaranteed amounts, the Company will expense the minimum guarantee in a manner reflective of the pattern of benefit provided by these subscriber related expenses, which approximates a straight-line basis over each minimum guarantee period within the arrangement. Subscriber related expenses also include credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, and facility costs. The Company receives advertising spots from television networks for sale to advertisers as part of the affiliate distribution agreements. Subscriber related expenses totaled $204.2 million and $0 for the years ended December 31, 2020 and 2019, respectively. F- 16 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Broadcasting and Transmission Broadcasting and transmission expenses are charged to operations as incurred and consist primarily of the cost to acquire a signal, transcode, store, and retransmit it to the subscriber. Sales and Marketing Sales and marketing expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, agency costs, advertising campaigns and branding initiatives. All sales and marketing costs are expensed as they are incurred. Advertising expense totaled $48.2 million and $0.5 million for the years ended December 31, 2020 and 2019, respectively. Technology and Development Technology and development expenses are charged to operations as incurred. Technology and development expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, technical services, software expenses, and hosting expenses. General and Administrative General and administrative expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, corporate insurance, office expenses, professional fees, as well as travel, meals, and entertainment costs. Stock-Based Compensation The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. These options generally vest on the grant date or over a one- year period. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term. The simplified method was used because the Company does not have sufficient historical exercise data to provide a reasonable basis for an estimate of expected term. Expected Volatility - The Company historically has lacked company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U. S. Treasury zero-coupon issues with an equivalent remaining term. Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. The Company accounts for forfeited awards as they occur. Income Taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. F- 17 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements ASC Topic 740, Income Taxes, (“ASC 740”), also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position. Treasury Stock The Company accounts for the treasury stock using the cost method, which treats it as a reduction in stockholders’ equity. In December 2020, the Company repurchased 800,000 shares of its common stock at par value. Net Loss Per Share Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share excludes the potential impact of the Company’s convertible notes, convertible preferred stock, common stock options and warrants because their effect would be anti-dilutive. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): December 31, 2020 2019 Basic loss per share: Net loss $ (599,392 ) $ (38,127 ) Less: net loss attributable to non-controlling interest 29,059 3,767 Less: Deemed dividend - beneficial conversion feature on preferred stock - (9 ) Add: deemed dividend on Series D Preferred Stock (171 ) (589 ) Net loss attributable to common stockholders (570,504 ) (34,958 ) Shares used in computation: Weighted-average common shares outstanding 44,492,975 22,286,060 Basic and diluted loss per share $ (12.82 ) $ (1.57 ) The following common share equivalents are excluded from the calculation of weighted average common shares outstanding because their inclusion would have been anti-dilutive: December 31, 2020 2019 Common stock purchase warrants 2,535,528 200,007 Series AA convertible preferred shares 46,439,226 Series D convertible preferred shares - 461,839 Stock options 20,908,862 16,667 Convertible notes variable settlement feature - 190,096 Total 69,883,616 868,609 F- 18 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13 ”). The amendments in ASU 2018-13 modify the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company adopted this standard on January 1, 2020 and the adoption did not have a material impact on the financial statements and related disclosures. In December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12” ), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard on January 1, 2020 and the adoption did not have a material impact on the financial statements and related disclosures. In July 2017, the FASB has issued a two-part ASU No. 2017-11, (i) Accounting for Certain Financial Instruments with Down Round Features and (ii) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception which simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downward adjustment of the current exercise price based on the price of future equity offerings. It is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted this standard on its consolidated financial statements and disclosures as of January 1, 2019. The adoption of ASU 2017-11 did not have a material impact on its consolidated financial statements. Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” . The ASU sets forth a “current expected credit loss” (“CECL”) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies to calendar year 2023. The adoption of this ASU will not have a material impact on the consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method of transition. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures. F- 19 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 4 – Acquisitions Facebank AG acquisition On August 15, 2019, the Company acquired 100% of the issued and outstanding capital stock of Facebank AG in exchange for 2,500,000 shares of common stock, par value $0.0001 per share, of the Company. The acquisition was accounted for using the acquisition method accounting. The fair value of the Company’s common stock transferred as consideration in the acquisition was $20.0 million, which was determined using the closing price of the Company’s stock as traded on the OTC. Facebank AG is a privately-owned Swiss holding company which, at the time of acquisition, owned a minority interest in Nexway AG, and had entered into a binding agreement to acquire an aggregate 62.3% majority interest in Nexway AG. On September 16, 2019, Facebank AG completed its acquisition of a majority interest in Nexway AG, which is further discussed below. Facebank AG also owns 100% of SAH, a French joint stock company and investor in the global luxury, entertainment and celebrity focused industries that directly or indirectly holds investments in multiple other subsidiaries. Purchase Price Allocation The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed for the Facebank AG acquisition (in thousands): Cash $ 329 Accounts receivable 3,709 Property and equipment 16 Investments 5,671 Financial assets as fair value 2,275 Intangible assets – customer relationships 2,241 Intangible assets – intellectual property 1,215 Intangible assets – trade names and trademarks 843 Goodwill 28,541 Accounts payable (64 ) Accrued expenses (802 ) Deferred taxes (1,161 ) Long-term borrowings (22,863 ) Stock purchase price $ 19,950 The liabilities assumed in the acquisition include long-term borrowings with an acquisition-date fair value of $22.9 million. SAH was the borrower under a EUR 20.0 million bond due March 31, 2024 and an interest rate of 7%. The principal amount outstanding under the borrowing was EUR 14.5 million, and EUR 16.7 million at August 15, 2019 (acquisition date) and December 31, 2019. At August 15, 2019, SAH was also the borrower under a EUR 5.0 million term loan with Highlight Finance Corp. as the lender and an interest rate of 4.0%. The term loan was effectively settled as part of Facebank AG’s acquisition of Nexway AG and Highlight Finance Corp. on September 19, 2019 and is not outstanding at December 31, 2020 and 2019. Refer to the following section for further discussion on the acquisition of Nexway AG and Highlight Finance Corp. Nexway AG Acquisition On September 16, 2019, Facebank AG, a wholly owned subsidiary of the Company, acquired 333,420 shares, or approximately 51%, of Nexway and 35,000 shares, or approximately 70%, of Highlight Finance Corp. (“HFC”) (the “Nexway AG Acquisition”). Prior to the acquisition, Facebank AG owned 74,130 shares of Nexway, representing approximately 11.3% of the outstanding common shares of Nexway. Nexway is a Karlsruhe-based and Germany-listed software and solutions company, which provides a subscription-based platform for the monetization of intellectual property, principally for entertainment, games and security software companies, through its proprietary merchant presence in 180 different countries. HFC is a British Virgin Islands company with a EUR 15.0 million term bond facility issued and outstanding as of the acquisition date. The acquisition was accounted for using the acquisition method accounting. The aggregate consideration of approximately ($5.3 million) equaled the sum of cash paid ($2.2 million), the fair value of bonds issued ($1.8 million), and the fair value of the Nexway shares previously owned by Facebank AG ($1.1 million), less the fair value of Facebank AG debt effectively settled as a result of the acquisition ($10.4 million). Goodwill related to the Nexway AG Acquisition is not deductible for tax purposes. F- 20 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Purchase Price Allocation The following table summarizes the allocation of the purchase price to the assets acquired, liabilities assumed and noncontrolling interest for the Nexway AG Acquisition (in thousands): Cash $ 4,152 Accounts receivable 12,900 Prepaid expenses 1,169 Inventory 61 Property and equipment 213 Intangible assets – customer relationships 2,241 Intangible assets – intellectual property 1,215 Intangible assets – trade names and trademarks 843 Goodwill 45,900 Right-of-use assets 3,594 Accounts payable (28,381 ) Accrued expenses (16,747 ) Current portion of lease liability (756 ) Deferred income taxes (450 ) Other long-term liabilities (193 ) Lease liability (2,838 ) Long-term borrowings (24,609 ) Noncontrolling interests (3,582 ) Consideration transferred $ (5,268 ) The liabilities assumed in the acquisition include long-term borrowings with an acquisition-date fair value of $24.6 million. Nexway AG was the borrower of EUR 12.0 million secured notes, of which EUR 7.5 million was outstanding upon the acquisition on September 19, 2019. The Nexway borrowing has a maturity date of September 8, 2023 and interest rate of 6.5%. HFC was the borrower under a EUR 15.0 million bond due April 30, 2024 and an interest rate of 4%. As discussed in Note 7, the Facebank AG and Nexway businesses were disposed of in 2020. The results of the operations of Facebank AG and Nexway were not material to the consolidated financial statements of fuboTV Inc. for the year-ended December 31, 2020. The following unaudited pro forma financial information for the year ended December 31, 2019 presents combined results of operations as if the Nexway AG acquisition had occurred on January 1, 2019 (in thousands except per share data): Year ended December 31, 2019 Operating revenues $ 14,928 Net loss $ (44,088 ) Proforma EPS - basic and diluted $ (1.98 ) Fubo TV Merger On April 1, 2020, we completed the Merger, as described in Note 1. In accordance with the terms of the Merger Agreement, all of the capital stock of fuboTV Pre-Merger was converted, at a stock exchange ratio of 1.82, into the right to receive 32,324,362 shares of Series AA Convertible Preferred Stock, a newly-created class of our Preferred Stock. Pursuant to the Series AA Certificate of Designation, each share of Series AA Convertible Preferred Stock is convertible into two shares of the Company’s common stock only in connection with the sale of such shares on an arms’-length basis either pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act or pursuant to an effective registration statement under the Securities Act. F- 21 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements In addition, each outstanding option to purchase shares of common stock of fuboTV Pre-Merger was assumed by FaceBank Pre-Merger and converted into options to acquire FaceBank Pre-Merger’s common stock at a stock exchange ratio of 3.64. In accordance with the terms of the Merger Agreement, the Company assumed 8,051,098 stock options issued and outstanding under the fuboTV Pre-Merger’s 2015 Equity Incentive Plan (the “2015 Plan”) with a weighted-average exercise price of $1.32 per share. From and after the Effective Time, such options may be exercised for shares of the Company’s common stock under the terms of the 2015 Plan. The purchase price for the merger was determined to be $576.1 million, which consists of (i) $530.1 million market value ($8.20 per share stock price of the Company as of April 1, 2020) of 64.6 million common shares (on an as-converted basis), (ii) $36.0 million related to the fair value of outstanding options vested prior to the Merger and (iii) $10.0 million related to the effective settlement of a preexisting loan receivable from fuboTV Pre-Merger. No gain or loss was recognized on the settlement as the loan was effectively settled at the recorded amount. Transaction costs of $0.9 million were expensed as incurred. The Company accounted for the Merger as a business combination under the acquisition method of accounting. FaceBank Pre-Merger was determined to be the accounting acquirer based upon the terms of the Merger Agreement and other factors including: (i) FaceBank Pre-Merger’s stockholders owned approximately 57% of the voting common shares of the combined company immediately following the closing of the Merger (54% assuming the exercise of all vested stock options as of the closing of the transaction) and (ii) directors appointed by FaceBank Pre-Merger would hold a majority of board seats in the combined company. The following table presents the allocation of the purchase price to the net assets acquired, inclusive of intangible assets, with the excess fair value recorded to goodwill. The goodwill, which is not deductible for tax purposes, is attributable to the assembled workforce of fuboTV Pre-Merger, planned growth in new markets, and synergies expected to be achieved from the combined operations of FaceBank Pre-Merger and fuboTV Pre-Merger. The goodwill established was included within a new fuboTV reporting unit. During the year ended December 31, 2020, the Company continued finalizing its valuations of the assets acquired and liabilities assumed in the April 1, 2020 acquisition of fuboTV based on new information obtained about facts and circumstances that existed as of the acquisition date. During the year ended December 31, 2020, the Company recorded measurement period adjustments, reducing its acquisition date goodwill by approximately $84.5 million primarily to increase the net deferred tax assets based on a final assessment of the realizability of deferred tax assets acquired in the merger and the resulting impact on the Company’s valuation allowance of its deferred tax assets. F- 22 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Fair Value Assets acquired: Cash and cash equivalents $ 8,040 Accounts receivable 5,831 Prepaid expenses and other current assets 976 Property & equipment 2,042 Restricted cash 1,333 Other noncurrent assets 397 Operating leases - right-of-use assets 5,395 Intangible assets 243,612 Deferred tax asset 15,527 Goodwill 478,406 Total assets acquired 761,559 Liabilities assumed: Accounts payable $ 66,498 Accrued expenses and other current liabilities 80,996 Long-term borrowings - current portion 5,625 Operating lease liabilities 5,395 Deferred revenue 8,809 Long-term debt, net of issuance costs 18,125 Total liabilities assumed $ 185,448 Net assets acquired $ 576,111 The fair values of the intangible assets acquired were determined using the income and cost approaches. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in ASC 820. The relief from royalty method was used to value the software and technology and tradenames. The relief from royalty method is an application of the income method and estimates fair value for an asset based on the expected cost to license a similar asset from a third-party. Projected cash flows are discounted at a required rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, was used for customer relationships. The cost to replace a given asset reflects the estimated reproduction or replacement cost for these customer related assets. The estimated useful lives and fair value of the intangible assets acquired are as follows (in thousands): Estimated Useful Life (in Years) Fair Value Software and technology 9 $ 181,737 Customer relationships 2 23,678 Tradenames 9 38,197 Total $ 243,612 The deferred tax assets represent the deferred tax impact associated with the differences in book and tax basis, including incremental differences created from the purchase price allocation and acquired net operating losses. Deferred taxes associated with estimated fair value adjustments reflect an estimated blended federal and state tax rate, net of tax effects on state valuation allowances. For balance sheet purposes, where U.S. tax rates were used, rates were based on recently enacted U.S. tax law. The effective tax rate of the combined company could be significantly different (either higher or lower) depending on post-merger activities, including cash needs, the geographical mix of income, and changes in tax law. F- 23 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements The following unaudited pro forma consolidated results of operations assume that the acquisition of fuboTV Pre-Merger was completed as of January 1, 2019 (in thousands): Years ended December 31, 2020 2019 Total revenues $ 268,793 $ 150,801 Net loss attributable to common stockholders $ (590,404 ) $ (255,488 ) Pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. Note 5 – Revenue From Contracts With Customers Disaggregated revenue The following table presents the Company’s revenues disaggregated into categories based on the nature of such revenues (in thousands): Year Ended December 31 2020 2019 Subscriptions $ 184,328 $ - Advertisements 24,904 - Software licenses, net – Nexway eCommerce Solutions 7,295 4,271 Other 1,219 - Total revenue $ 217,746 $ 4,271 Contract balances There were no losses recognized related to any receivables arising from the Company’s contracts with customers for the year ended December 31, 2020 and 2019. For the year ended December 31, 2020 and 2019, the Company did not recognize material bad-debt expense and there were no material contract assets recorded on the accompanying consolidated balance sheet as of December 31, 2020 and 2019. The contract liabilities primarily relate to upfront payments and consideration received from customers for subscription services. As of December 31, 2020, the Company’s contract liabilities totaled approximately $17.4 million and are recorded as deferred revenue on the accompanying consolidated balance sheet. There were no contract liabilities recorded as of December 31, 2019. Transaction price allocated to remaining performance obligations The Company does not disclose the transaction price allocated to remaining performance obligations since subscription and advertising contracts have an original expected term of one year or less. Note 6 – Property and Equipment, Net Property and equipment, net, is comprised of the following (in thousands): December 31, 2020 2019 Furniture and fixtures $ 573 $ 335 Computer equipment 801 - Leasehold improvements 2,272 - 3,646 335 Less: Accumulated depreciation (1,875 ) Total property and equipment, net $ 1,771 $ 335 Depreciation expense totaled approximately $0.4 million for the year ended December 31, 2020. Depreciation expense totaled $0.1 million for the year ended December 31, 2019. F- 24 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 7 – FaceBank AG and Nexway – Disposition Through its ownership in FaceBank AG, the Company had an equity investment of 62.3% in Nexway AG (“Nexway”), which it acquired beginning on August 15, 2019 and on September 16, 2019. The equity investment in Nexway was a controlling financial interest and the Company consolidated its investment in Nexway under ASC 810, Consolidation. On March 31, 2020, the Company relinquished approximately 20% of the total Nexway shareholder votes associated with its investment, which reduced the Company’s voting interest in Nexway to 42.6%. As a result of the Company’s loss of control in Nexway, the Company deconsolidated Nexway as of March 31, 2020 as it no longer had a controlling financial interest. The deconsolidation of Nexway resulted in a loss of approximately $11.9 million calculated as follows (in thousands): Cash $ 5,776 Accounts receivable 9,831 Inventory 50 Prepaid expenses 164 Goodwill 51,168 Property and equipment, net 380 Right-of-use assets 3,594 Total assets $ 70,963 Less: Accounts payable 34,262 Accrued expenses 15,788 Lease liability 3,594 Deferred income taxes 1,161 Other liabilities 40 Total liabilities $ 54,845 Non-controlling interest 2,595 Foreign currency translation adjustment (770 ) Loss before fair value – investment in Nexway 14,293 Less: fair value of shares owned by the Company 2,374 Loss on deconsolidation of Nexway $ 11,919 During the quarter ended September 30, 2020, the Company sold 100% of its ownership interest in Facebank AG and its remaining investment in Nexway to the former owners and recognized a gain on sale of its investment of approximately $7.6 million, which is included as a gain on the sale of assets, a component of other income (expense) on the accompanying consolidated statement of operations. The following table represents the net carrying value of the Company’s investment in Facebank AG and Nexway and the related gain on sale of its investment (in thousands): Investment in Nexway $ 4,989 Financial assets at fair value 1,965 Goodwill 28,541 Total assets 35,495 Loan payable 56,140 Net carrying amount (20,645 ) Issuance of common stock to original owners of Facebank AG 12,395 Cash paid to former owners of Facebank AG 619 Gain on sale of investment in Facebank AG $ (7,631 ) F- 25 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 8 – Intangible Assets and Goodwill Intangible Assets The table below summarizes the Company’s intangible assets at December 31, 2020 and 2019 (in thousands): Weighted December 31, 2020 Useful Lives (Years) Average Remaining Life (Years) Intangible Assets Intangible Asset Impairment Accumulated Amortization Net Balance Human animation technologies 5 - $ 123,436 $ (85,281 ) $ (38,155 ) $ - Trademark and trade names 5 - 7,746 (5,294 ) (2,452 ) - Animation and visual effects technologies 4 - 6,016 (4,024 ) (1,992 ) - Digital asset library 4 - 7,536 (5,131 ) (2,405 ) - Intellectual Property 7 - 828 (574 ) (254 ) - Customer relationships 2 1.5 23,678 - (8,880 ) 14,798 fuboTV tradename 9 8.5 38,197 - (3,183 ) 35,014 Software and technology 9 8.5 181,782 - (15,145 ) 166,637 Total $ 389,219 $ (100,304 ) $ (72,466 ) $ 216,449 Weighted December 31, 2019 Useful Lives (Years) Average Remaining Life (Years) Intangible Assets Intangible Asset Impairment Accumulated Amortization Net Balance Human animation technologies 7 6 $ 123,436 $ - $ (24,646 ) $ 98,790 Trademark and trade names 7 6 9,432 (1,686 ) (1,549 ) 6,197 Animation and visual effects technologies 7 6 6,016 - (1,203 ) 4,813 Digital likeness development 5-7 5.5 7,505 - (1,251 ) 6,254 Intellectual Property 7 6 3,258 (2,430 ) (236 ) 592 Customer relationships 11 11 4,482 (4,482 ) - - Total $ 154,129 $ (8,598 ) $ (28,885 ) $ 116,646 The intangible assets are being amortized over their respective original useful lives, which range from 2 to 11 years. The Company recorded amortization expense related to the above intangible assets of approximately $43.6 million and $20.8 million for the years ended December 31, 2020 and 2019, respectively. As noted above, the Company recorded an impairment charge of $100.3 million and $8.6 million during the years ended December 31, 2020 and 2019, respectively. F- 26 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements The estimated future amortization expense associated with intangible assets is as follows (in thousands): Future Amortization 2021 $ 36,291 2022 27,412 2023 24,452 2024 24,437 Thereafter 103,857 Total $ 216,449 Goodwill The following table is a summary of the changes to goodwill for the year ended December 31, 2020 and 2019 (in thousands): December 31, 2020 2019 Beginning balance $ 227,763 $ 149,975 Nexway Acquisition - 51,168 Facebank AG Acquisition - 28,541 Measurement period adjustment for EAI acquisition - (1,921 ) Deconsolidation of Nexway (51,168 ) - Acquisition of fuboTV 478,406 - Less: Sale of Facebank AG (28,541 ) - Impairment expense (148,054 ) - Ending balance $ 478,406 $ 227,763 Note 9 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are presented below (in thousands): December 31, 2020 2019 Suppliers $ - $ 37,508 Affiliate fees 102,914 - Broadcasting and transmission 13,297 - Selling and marketing 13,347 - Payroll taxes (in arrears) - 1,308 Accrued compensation 2,552 3,649 Legal and professional fees 4,582 3,936 Accrued litigation loss - 524 Taxes (including value added) 13,542 5,953 Subscriber related 1,937 - Other 5,382 3,897 Total $ 157,553 $ 56,775 F- 27 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 10 – Income Taxes The benefit of income taxes for the years ended December 31, 2020 and 2019 consist of the following (in thousands): For the Years Ended December 31, 2020 2019 U.S. Federal Current $ - $ - Deferred 7,930 4,302 State and local Current - - Deferred 1,730 970 Valuation allowance - - Income tax benefit $ 9,660 $ 5,272 A reconciliation of the statutory federal rate to the Company’s effective tax rate is as follows: December 31, 2020 2019 Federal rate 21.00 % 21.00 % State income taxes, net of federal benefit 0.28 4.74 Non-controlling interest - (0.82 ) Nexway activity and deconsolidation (0.40 ) - Common stock issued for services - (0.82 ) Incentive stock options (0.38 ) - Change in fair value of derivative, warrant liability, and gain on extinguishment of convertible notes (3.42 ) 1.16 Amortization of debt discount - (0.13 ) Loss on investments - (1.81 ) Goodwill impairment (5.10 ) - Other (0.12 ) - Change in valuation allowance (10.27 ) (9.49 ) Income tax benefit 1.58 % 13.83 % The components of our deferred tax assets are as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Net operating losses $ 133,281 $ - Accruals and deferrals 4,419 - Stock based compensation 6,732 - Interest expense limitation 4,409 - Other 1,965 - Total deferred tax assets 150,806 - Less: Valuation allowance (102,869 ) - Net deferred tax assets $ 47,937 $ - Deferred tax liabilities: Intangible assets $ 51,736 $ 30,879 Other 1,301 - Total deferred tax liabilities $ 53,037 $ 30,879 Net deferred tax liabilities $ 5,100 $ 30,879 The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax-planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. At December 31, 2020 and 2019, the Company continued to maintain that the realization of its deferred tax assets has not achieved a more likely than not threshold therefore, the net deferred tax assets have been offset by a valuation allowance. The valuation allowance increased by $102.9 million and $0.0 million in the years ended December 31, 2020 and December 31, 2019, respectively. F- 28 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements On March 27, 2020 the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). On December 21, 2020, The U.S. Congress passed the Consolidation Appropriations Act, 2021 (the CAA Act). We have evaluated the provisions of the CARES Act and CCA Act and determined that it did not result in a significant impact on our tax provision. As of December 31, 2020, the Company had federal net operating loss carryforwards of $557.1 million. The federal net operating loss carryforwards of $88.1 million generated before January 1, 2018 will begin to expire in 2033, and $469.0 million will carryforward indefinitely but are subject to the 80% taxable income limitation. As of December 31, 2020, the Company had state net operating loss carryforwards of $307.7 million. The state net operating loss carryforward of $276.6 million will begin to expire in 2033 and $31.1 million will carryforward indefinitely but are subject to the 80% taxable income limitation. Utilization of the NOL carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code, as well as similar state provisions. In general, an “ownership change” as defined by Code Sections 382 and 383, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Since the Company’s formation, the Company has raised capital through the issuance of capital stock on several occasions which, combined with the purchasing stockholders’ subsequent disposition of those shares have resulted in such an ownership change and could result in an ownership change in the future upon subsequent disposition. The Company conducted an analysis of our stock ownership under Internal Revenue Code Section 382 and 383. The net operating loss carryforwards are subject to annual limitations as a result of the ownership changes in 2015, 2016, 2019 and 2020. Approximately $1.1 million of the net operating loss carryforwards are expected to expire before the utilization. The Company follows the provisions of FASB Accounting Standards Codification (ASC 740-10), Accounting for Uncertainty in Income Taxes. ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of uncertain tax positions that have been taken or expected to be taken on an income tax return. No liability related to uncertain tax positions was required to be recorded in the financial statements as of December 31, 2020 and 2019. The Company’s policy is to recognize interest and penalties accrued on uncertain income tax positions in income tax expense in the Company’s consolidated statements of operations. The Company had not incurred any material tax interest or penalties as of December 31, 2020. The Company does not anticipate any significant change within 12 months of this reporting date of its uncertain tax positions. F- 29 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements The Company is subject to taxation in the United States and various state jurisdictions, and Spain. The Company had been delinquent in filings since December 31, 2014. During 2020, the Company filed all past due income tax returns There are no ongoing examinations by taxing authorities at this time. The Company’s tax years 2013 through 2020 will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss credits. The Company’s 2018 to 2020 tax years will remain open for examination by the Spain tax authority for four years starting from the day following the date of termination of the voluntary tax filing period. Note 11 - Related Parties As of December 31, 2019, amounts owed to related parties consisted of the following (in thousands): December 31, 2019 Alexander Bafer, former Executive Chairman $ 20 John Textor, former Chief Executive Officer and affiliated companies 592 Other 53 Total $ 665 Our former Chairman, Mr. Bafer, advanced an unsecured, non-interest-bearing loan to the Company which is payable on demand. The amounts due to John Textor, Chief Executive Officer, represents an unpaid compensation liability assumed in the acquisition of EAI. The amounts due to other related parties also represent financing obligations assumed in the acquisition of EAI. During the year ended December 31, 2019, the Company received approximately $423,000 from related parties, including a $300,000 advance from FaceBank, Inc., a development stage company controlled by Mr. Textor, $56,000 from Mr. Bafer, $37,000 from Mr. Textor and $30,000 from other related parties. During the year ended December 31, 2019, the Company paid approximately $156,000 to related parties, including $56,000 to Mr. Bafer, $49,000 to Mr. Textor and $51,000 to other related parties On July 31, 2020, Alexander Bafer resigned as a member of the Company’s Board of Directors and as an executive officer of the Company and John Textor resigned as a member of the Board of Directors of the Company. On December 1, 2020, the Company entered into a separation agreement with Mr. Textor which provided for one lump sum payment totaling $500,000. No further amounts are due and payable by the Company for advances from Mr. Textor. The amounts due to other related parties at December 31, 2019 represent financing obligations assumed in the acquisition of EAI. F- 30 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 12 - Notes Payable and Long-Term Borrowings Notes payable and long-term borrowings as of December 31, 2020 and 2019 consist of the following (in thousands): December 31, Note Stated Interest Rate 2020 2019 AMC Networks Ventures, LLC LIBOR plus 5.25% per annum $ 19,556 $ - CAM Digital LLC 10.0% 4,558 4,090 PPP Note 1.0% 4,699 - Stock Access Holdings (SAH) 7.0% - 18,764 Highlight Finance Corp (HFC) 4.0% - 14,530 Nexway SAS 6.5% - 10,688 Related party 18.0% - 368 Other 4.0% 35 - $ 28,848 $ 48,440 Senior Secured Loan In April 2018, fuboTV pre-Merger entered into a senior secured term loan with AMC Networks Ventures, LLC (the “Term Loan”) with a principal amount of $25.0 million, bearing interest equal to LIBOR (London Interbank Offered Rate) plus 5.25% per annum and with scheduled principal payments beginning in 2020. The Company recorded this loan at its fair value of $23.8 million in connection with its acquisition of fuboTV Pre-Merger on April 1, 2020. The Company has made principal repayments of $3.8 million during the year ended December 31, 2020. As of December 31, 2020, the outstanding balance of the Term Loan is approximately $20.0 million and is included in long-term borrowings – current portion on the accompanying consolidated balance sheet. The Term Loan matures on April 6, 2023, has certain financial covenants and requires the Company to maintain a certain minimum subscriber level. The Company was in compliance with all financial covenants at December 31, 2020. CAM Digital, LLC The Company has recognized, through the consolidation of its subsidiary EAI, a $2.7 million note payable bearing interest at the rate of 10% per annum that was due on October 1, 2018 (“CAM Digital Note”). The cumulative accrued interest on the CAM Digital Note amounts to $1.6 million. The CAM Digital Note is currently in a default condition due to non-payment of principal and interest. The CAM Digital Note relates to the acquisition of technology from parties who, as a result of the acquisition of EAI, own 15,000,000 shares of the Company’s common stock (after the conversion of 1,000,0000 shares of Series X Convertible Preferred Stock during the year ended December 31, 2019). The holders of the CAM Digital Note have agreed not to declare the CAM Digital Note in default and to forbear from exercising remedies which would otherwise be available in the event of a default, while the CAM Digital Note continues to accrue interest. The Company is currently in negotiation with such holders to resolve the matter and the outstanding balance as of December 31, 2020, including interest and penalties, is $4.6 million. The balance of $4.6 million is included in notes payable on the accompanying consolidated balance sheet. FBNK Finance S.a.r.l On February 17, 2020, FBNK Finance S.a.r.l, a wholly-owned subsidiary of FaceBank AG (“FBNK Finance”), issued EUR 50.0 million of bonds (or $55.1 million). There were 5,000 notes with a nominal value EUR 10,000 per note. The bonds were issued at par with 100% redemption price. The maturity date of the bonds was February 15, 2023 and the bonds had a 4.5% annual fixed rate of interest. Interest is payable semi-annually on August 15 and February 15. The bonds are unconditional and unsubordinated obligations of FBNK Finance. The majority of the proceeds were used for the redemption of the bonds issued by SAH, HFC and Nexway SAS. The Company recorded a loss of $11.0 million during the year ended December 31, 2020 which was recorded as loss extinguishment of debt on the accompanying consolidated statement of operations. During the year ended December 31, 2020, the Company recorded a $1.0 million foreign exchange loss upon remeasurement to USD. During the quarter ended September 30, 2020, the Company sold its investment in FaceBank AG and Nexway and derecognized the carrying value of the bonds of $56.1 million (see Note 7). F- 31 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Credit and Security Agreement As described in Note 1, on March 11, 2020, the Company and HLEE entered into the Credit Facility with HLEE. The Credit Facility is secured by substantially all the assets of the Company. As of December 31, 2020, there were no amounts outstanding under the Credit Facility. On July 8, 2020, the Company entered into a Termination and Release Agreement with HLEE to terminate the Credit Agreement. The Company did not draw down on the Credit Agreement during its term. Note Purchase Agreement As described in Note 1, on March 19, 2020, the Company and the other parties thereto entered into the Note Purchase Agreement, pursuant to which the Company sold to FB Loan the Senior Notes. In connection with the Company’s acquisition of fuboTV Pre-Merger, the proceeds of $7.4 million, net of an original issue discount of $2.7 million, were used to fund the advance to fuboTV Pre-Merger. Each Borrower’s obligations under the Senior Notes were secured by substantially all of the assets of each such Borrower pursuant to a Security Agreement, dated as of March 19, 2020, by and among Borrower and FB Loan (the “Security Agreement”). Interest on the Senior Notes accrued until full and final repayment of the principal amount of the Senior Note at a rate of 17.39% per annum. The maturity date of the Senior Notes was the earlier to occur of (i) July 8, 2020 and (ii) the date the Borrower receives the proceeds of any financing. The Borrower may prepay or redeem the Senior Note in whole or in part without penalty or premium. In connection with the Note Purchase Agreement, the Company issued FB Loan a warrant to purchase 3,269,231 shares of its common stock at an exercise price of $5.00 per share (the “FB Loan Warrant”) and 900,000 shares of its common stock. The fair value of the warrant on the Senior Notes issuance date was approximately $15.6 million and was recorded as a warrant liability with subsequent changes in fair value recognized in earnings each reporting period through the date the warrants were exercised (see Note 13). The fair value of the 900,000 common stock issuable was based upon the closing price of the Company’s common stock as of March 19, 2020 (or $8.15 per share or $7.3 million) and was recorded as a share settled liability on the issuance date with subsequent changes in fair value recognized in earnings through date of issuance of the shares. Since the fair value of the warrants and common stock exceeded the principal balance of the Senior Notes, the Company recorded a loss on issuance of the Senior Notes totaling $12.9 million and is reflected in loss on extinguishment of debt in other income (expense) on the accompanying consolidated statement of operations. On April 28, 2020, these shares were issued at $10.00 per share. The Company recorded a change in fair value of shares settled payable of approximately $1.7 million during the year ended December 31, 2020 reflected in change in fair value of share settled liability within other income (expense) on the accompanying consolidated statement of operations. Pursuant to the Note Purchase Agreement, the Borrower agreed, among other things that (i) the Company shall file a registration statement with the Commission regarding the purchase and sale of 900,000 shares of the Company’s common stock issued to FB Loan in connection with the Note Purchase Agreement (the “Shares”) and any shares of capital stock issuable upon exercise of the FB Loan Warrant (the “Warrant Shares)”); and (ii) the Company shall have filed an application to list the Company’s Common Stock for trading on the NASDAQ exchange, on or before the date that is thirty (30) days following the closing date of the Note Purchase Agreement. The Company entered into various amendments to the Note Purchase Agreement to waive or modify certain covenants. On July 3, 2020, the Company repaid $10.1 million related to the Note Purchase Agreement. Paycheck Protection Program Loan On April 21, 2020, the Company entered into a Promissory Note (the “PPP Note”) with JPMorgan Chase Bank, N.A. as the lender (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (the “PPP Loan”) offered by the U.S. Small Business Administration (the “SBA”) in a principal amount of $4.7 million pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The PPP Loan proceeds are available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt. The loan is subject to forgiveness to the extent proceeds are used for payroll costs, including payments required to continue group health care benefits, and certain rent, utility, and mortgage interest expenses (collectively, “Qualifying Expenses”), pursuant to the terms and limitations of the PPP. The Company used the loan amount for Qualifying Expenses. The interest rate on the PPP Note is a fixed rate of 1% per annum. To the extent that the amounts owed under the PPP Loan, or a portion of them, are not forgiven, the Company will be required to make principal and interest payments in monthly installments beginning seven months from April 2020. The PPP Note matures in two years. The PPP Note includes events of default. Upon the occurrence of an event of default, the Lender will have the right to exercise remedies against the Company, including the right to require immediate payment of all amounts due under the PPP Note. The Company repaid in full the PPP Note in February 2021. Consequently, as of December 31, 2020, the Company recorded the principal balance of $4.7 million as long-term borrowings– current portion on the accompanying consolidated balance sheet. F- 32 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Revenue Participation Agreement On May 15, 2020, the Company entered into a revenue participation agreement with Fundigo, LLC for $10.0 million (the “Purchase Price”). The Company received net proceeds of $9.5 million, net of an original issue discount of $0.5 million, in exchange for participation in all of the Company’s future accounts, contract rights, and other obligations arising from or relating to the payment of monies from the Company’s customers and/or third-party payors (the “Revenues”), until an amount equal to 145% of the Purchase Price, or $14.5 million (the “Revenue Purchased Amount”) has been paid. The repayment amount is reduced under the following circumstances. (i) If the Company pays $12.0 million of the Revenue Purchased Amount to Fundigo LLC before June 15, 2020, such payments shall constitute payment in full of the Revenue Purchased Amounts and no additional debits will be made. (ii) If the Company pays $13.0 million of the Revenue Purchased Amount to Fundigo LLC before July 4, 2020, such payments shall constitute payment in full of the Revenue Purchased Amounts and no additional debits will be made. The Company accounted for this agreement as a loan and as of December 31, 2020 the loan was repaid in full. Interest expense incurred on the loan was $3.1 million for the year ending December 31, 2020. Century Venture On May 15, 2020, the Company entered into a loan agreement (the “Loan”) with Century Venture, SA, receiving proceeds of $1.6 million to use for working capital and general corporate purposes. The Loan will bear interest at a rate of 8% per annum, payable in arrears on the 15th day of each month. In the event the Company fails to make a payment within ten (10) days after the due date, the Company shall pay interest on any overdue payment at the highest rate allowed by applicable law. All remaining unpaid principal together with interest accrued and unpaid shall be due and payable upon the earlier of (a) completion of any debt or equity financing of the Company, which results in proceeds of at least $50 million, or (b) May 14, 2021. On September 30, 2020, following negotiations with Century Venture, SA, the Company agreed to repay the Loan in full (inclusive of any interest, fees and penalties) owed under the Credit Agreement. The Company paid $1.6 million on October 2, 2020, the Credit Agreement and related Loan were automatically terminated. Credit Agreement On July 16, 2020, the Company entered into a Credit Agreement (the “Access Road Credit Agreement”) with Access Road Capital LLC (the “Lender”). Pursuant to the terms of the Access Road Credit Agreement, the Lender extended a term loan (the “Loan”) to us with a principal amount of $10.0 million. The Loan bears interest at a fixed rate of 13.0% per annum and matures on July 16, 2023. The Company repaid the loan in full on October 2, 2020. Notes Payable - Related Parties On August 8, 2018, the Company assumed a $172,000 note payable due to a relative of the then-Chief Executive Officer, John Textor. The note had a three-month roll-over provision, and different maturity and repayment amounts if not fully paid by its due date. The note bears interest at 18% per annum. The Company had accrued default interest for the additional liability in excess of the principal amount. Accrued interest and penalties as of December 31, 2019 was approximately $0.3 million and was recognized as note payable – related parties on the accompanying consolidated balance sheet. On August 3, 2020, the note maturity date was extended to December 31, 2020. On September 13, 2020, the note was amended to reduce the interest rate to 4% per annum retroactive to issuance date of the note. As of December 31, 2020, the principal balance and accrued interest totaled approximately $35,000. F- 33 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 13 - Fair Value Measurements The Company holds investments in equity securities and limited partnership interests, which are accounted for at fair value and classified within financial assets at fair value on the condensed consolidated balance sheet, with changes in fair value recognized as investment gain / loss in the condensed consolidated statements of operations. The Company also held an investment in Nexway common stock that was publicly traded on the Frankfurt Exchange. Additionally, the Company’s convertible notes, derivatives and warrants were classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other income (expense) in the condensed consolidated statements of operations. The following table classifies the Company’s assets and liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2020 and December 31, 2019 (in thousands): Fair valued measured at December 31, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Financial liabilities at fair value: Warrant liabilities $ - $ - $ 22,686 $ 22,686 Total financial liabilities at fair value $ - $ - $ 22,686 $ 22,686 Fair valued measured at December 31, 2019 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Financial assets at fair value Financial assets at fair value $ - $ - $ 1,965 $ 1,965 Total Financial Assets at Fair Value $ - $ - $ 1,965 $ 1,965 Financial liabilities at fair value: Derivative liability - convertible notes $ - $ - $ 1,203 $ 1,203 Profits interest sold - - 1,971 1,971 Embedded put option - - 376 376 Warrant liability - Subsidiary - - 24 24 Total financial liabilities at fair value $ - $ - $ 3,574 $ 3,574 Derivative Financial Instruments The following table presents changes in Level 3 liabilities measured at fair value (in thousands) for the year ended December 31, 2020 and 2019. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Derivative - Convertible Notes Profits Interests Sold Embedded Put Option Warrant liabilities Fair value at December 31, 2018 $ 1,018 $ - $ - $ 4,528 Change in fair value (678 ) 198 (137 ) (4,504 ) Additions 863 1,773 589 - Redemption - - (76 ) - Fair value at December 31, 2019 1,203 1,971 376 24 Change in fair value (206 ) (1,971 ) (220 ) 83,338 Additions 3,583 - 172 50,743 Redemption (4,580 ) - (328 ) (97,884 ) Reclassification of warrant liabilities - - - (13,535 ) Fair value at December 31, 2020 $ - $ - $ - $ 22,686 F- 34 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Warrant Liabilities FB Loan Warrant In connection with its Note Purchase Agreement (see Note 12), the Company issued the FB Loan Warrant and the warrant liability was recorded at the date of grant at fair value. Subsequent changes in fair value during the year ended December 31, 2020 was recorded as a change in fair value of warrants in other income (expense) in the consolidated statement of operations. As of December 31, 2020, the FB Loan Warrant was fully exercised. Purchase Agreements with Investors Between May 11, 2020 and June 8, 2020, the Company entered into Purchase Agreements with certain investors (the “Investors”), pursuant to which the Company sold an aggregate of 3,735,922 shares (the “Purchased Shares”) of the Company’s common stock and issued 3,735,922 warrants to the Investors. These warrants were initially reported as warrant liabilities due to the Company’s sequencing policy disclosed in Note 3. On September 25, 2020, the Company repaid all of its variable convertible notes. As a result of this repayment, the Company was no longer subject to a sequencing policy and therefore reclassified $13.5 million of warrant liabilities to additional paid in capital as of that date. Between August 20, 2020 and September 29, 2020, the Company entered into Purchase Agreements, with certain investors (the “Investors”), pursuant to which the Company sold an aggregate of 1,843,726 shares (the “Purchased Shares”) of the Company’s common stock and issued 1,843,726 warrants to the Investors. The aggregate warrant liabilities were recorded at the date of grant at fair value of $5.5 million. Subsequent changes in fair value for the year ended December 31, 2020 were recorded as change in fair value of warrant liabilities in the consolidated statement of operations. The Company used a Black-Scholes model to estimate the fair value of the warrant liability at December 31, 2020 using the following inputs: December 31, 2020 Fair value of underlying common shares $ 28.00 Exercise price $ 9.25 Expected dividend yield — % Expected volatility 73.9% - 75.1 % Weighted average expected volatility 74.35 % Risk free interest rate 0.1% - 0.11 % Weighted average risk free interest rate 10.57 % Expected term (years) 1.14 - 1.24 Weighted average expected term (years) 1.19 ARETE Wealth Management On May 25, 2020, the Company issued to ARETE Wealth Management a warrant to purchase 275,000 shares of the Company’s common stock for investment services. The warrant liability was recorded at the date of grant at fair value. Subsequent changes in fair value for the year ended December 31, 2020 were recorded as change in fair value of warrant liabilities in the consolidated statement of operations. As of December 31, 2020, these warrants were fully exercised. Auctus Warrant On April 1, 2020, the Company issued 142,118 common stock warrants in connection with a $1.1 million convertible note. The warrant was recorded as a warrant liability utilizing the Black-Scholes pricing model. The warrant liability was recorded at the date of grant at fair value. Subsequent changes in fair value for the year ended December 31, 2020 were recorded as change in fair value of warrant liability in the consolidated statement of operations. On September 29, 2020, the Company entered into an amendment related to the common stock warrants and issued an additional 217,357 warrants. As of December 31, 2020, these warrants were fully exercised. F- 35 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Subsidiary Warrant Liability The Company assumed liability for a warrant issued by PEC that expires on January 28, 2023. The fair value of the warrant liability, totaled $25,000 on December 31, 2020 and $24,000 on December 31, 2019, resulting in a change in fair value of $1,000 that is reported as a component of other income/(expense) in the consolidated statement of operations for the year ended December 31, 2020. Note 14 - Convertible Notes Payable During the year ended December 31, 2020, the Company repaid all of its convertible notes. As of December 31, 2019, the carrying amounts of the convertible notes including the remaining principal balance plus the fair value of the derivative liabilities associated with the variable share settlement feature and unamortized discounts is as follows (in thousands): Issuance Date Stated Interest Rate Maturity Date Principal Unamortized Discount Variable Share Settlement Feature at Fair Value Carrying amount Convertible notes Adar Bays - Alef (4) 11/28/2018 10 % 11/28/2019 275 (159 ) 379 495 JSJ Investments (7) 12/6/2019 10 % 12/6/2020 255 (238 ) 422 439 Eagle Equities (8) 12/12/2019 12 % 12/12/2020 210 (199 ) 285 296 BHP Capital (9) 12/20/2019 10 % 12/20/2020 125 (114 ) 117 128 Balance at December 31, 2019 $ 865 $ (710 ) $ 1,203 $ 1,358 Note 15 – Temporary Equity As of December 31, 2019, the Company had 462,000 shares of Series D Preferred Stock outstanding. The Series D Preferred stock was classified as temporary equity because it had redemption features that were outside the control of the Company. As of December 31, 2020, all of the shares of Series D Preferred Stock have been redeemed by the Company and there will be no future issuances. Note 16- Stockholders’ Equity/ (Deficit) Authorized Share Capital The Company amended its articles of incorporation on January 9, 2019 to increase the authorized share capital to 400 million shares of common stock. Series X Convertible Preferred Shares The Company had no shares, par value $0.0001, of Series X Convertible Preferred Shares, issued and outstanding at December 31, 2020 and 2019. Series X Convertible Preferred shares have the rights to receive dividends or any distributions on a “as-converted basis” and also each Series X Convertible Preferred stockholder held the right to 1 vote relative to each stockholder of common stock, on a “as-converted basis”. Each Series X Convertible Preferred share is convertible into 15 shares of common stock. On February 28, 2019, the 1,000,000 Series X Preferred Shares automatically converted into 15,000,000 shares of common stock. F- 36 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Preferred Stock Designations On March 20, 2020, FaceBank Pre-Merger amended its Articles of Incorporation to withdraw, cancel and terminate the previously-filed (i) Certificate of Designation of with respect to 5,000,000 shares of its Series A Preferred Stock, par value $0.0001 per share, (ii) Certificate of Designation with respect to 1,000,000 shares of its Series B Preferred Stock, par value $0.0001 per share, (iii) Certificate of Designation with respect to 41,000,000 shares of its Series C Preferred Stock, par value $0.0001 per share and (iv) Certificate of Designation with respect to 1,000,000 shares of its Series X Preferred Stock, par value $0.0001 per share. Upon the withdrawal, cancelation and termination of such designations, all shares previously designated as Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series X Preferred Stock were returned to the status of authorized but undesignated shares of the Company’s Preferred Stock, par value $0.0001 per share. On March 20, 2020, in connection with the Merger, FaceBank Pre-Merger filed an amendment to its Articles of Incorporation to designate 35,800,000 of its authorized preferred stock as “Series AA Convertible Preferred Stock” pursuant to a Certificate of Designation of Series AA Convertible Preferred Stock (the “Series AA Preferred Stock Certificate of Designation”). The Series AA Convertible Preferred Stock (the “Series AA Preferred Stock”) has no liquidation preference. The Series AA Preferred Stock is entitled to receive dividends and other distributions as and when paid on the Common Stock on an as converted basis. Each share of Series AA Preferred Stock is initially convertible into two shares of Common Stock, subject to adjustment as provided in the Series AA Preferred Stock Certificate of Designation and shall only be convertible immediately following the sale of such shares on an arms’-length basis either pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act or pursuant to an effective registration statement under the Securities Act. Each share of Series AA Preferred Stock shall have 0.8 votes per share (the “Voting Rate”) on any matter submitted to the holders of the Common Stock for a vote and shall vote together with the Common Stock on such matters for as long as the Series AA Preferred Stock is outstanding. The Voting Rate shall be subject to adjustment in the event of stock splits, stock combinations, recapitalizations reclassifications, extraordinary distributions and similar events. Common Stock Activity Issuance of Common Stock for Cash Year ended December 31, 2020 The Company raised approximately $2.3 million through issuances of an aggregate of 795,593 shares of its common stock in private placement transactions during the three months ended March 31, 2020 with investors. On July 2, 2020, the Company entered into a Purchase Agreement with Credit Suisse Capital LLC, pursuant to which the Company sold 2,162,163 shares of the Company’s common stock at a purchase price of $9.25 per share for an aggregate purchase price of $20.0 million. In October 2020, the Company sold 19,706,708 shares of its common stock in a public offering at $10.00 per share generating approximately $181.0 million in proceeds, net of offering costs. Year ended December 31, 2019 In March 2019, the Company raised $1.1 million in a private placement transaction by issuing 93,910 shares of its common stock for $11.28 per share to a Hong Kong-based family office group. The Company contemporaneously issued warrants to purchase an additional 200,000 shares of common stock to the investor in this transaction. The warrants feature an exercise price of $11.31 per share and may be exercised at any time prior to March 31, 2020. The warrants were determined to be equity instruments and are therefore classified within stockholders’ equity in accordance with ASC 815. The Company raised an additional $2.5 million through issuances of an aggregate of 1,028,497 shares of its common stock in private placement transactions during the year ended December 31, 2019 to several other investors. F- 37 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Issuance of Common Stock and Warrants for Cash Between May 11, 2020 and June 8, 2020, the Company entered into Purchase Agreements, pursuant to which the Company sold an aggregate of 3,735,922 shares of the Company’s common stock at a purchase price of $7.00 per share and issued warrants to the Investors covering a total of 3,735,922 shares of the Company’s common stock for an aggregate purchase price of $26.1 million. The Company raised approximately $0.5 million through issuances of an aggregate of 170,391 shares of its common stock in private placement transactions during the three months ended June 30, 2020 with investors. Between August 20, 2020 and August 28, 2020, the Company entered into Purchase Agreements, pursuant to which the Company sold an aggregate of 5,212,753 shares of the Company’s common stock at a purchase price of $9.25 per share and issued warrants to the Investors covering a total of 1,303,186 shares of the Company’s common stock for an aggregate purchase price of $48.2 million. Issuance of Common Stock for Acquisitions Year ended December 31, 2020 During the year ended December 31, 2020, the Company has issued 2,753,819 shares of its common stock in exchange for 17,950,055 shares of its subsidiary PEC, respectively. The interests exchange in PEC were previously recorded within noncontrolling interests and the transactions were accounted for as a reduction of $2.0 million of noncontrolling interests for the carrying value of those noncontrolling interests at the date of exchange with an offsetting increase in Additional paid-in capital, during the year ended December 31, 2020. Year ended December 31, 2019 During the year ended December 31, 2019, the Company issued 2,500,000 shares of its common stock, at a fair value of approximately $19.95 million, or approximately $7.98 per share, related to its acquisition of Facebank AG and Nexway. During the year ended December 31, 2019, the Company issued 2,503,333 shares of its common stock in exchange for 40,991,276 shares of its subsidiary PEC. The interests exchange in PEC were previously recorded within noncontrolling interests and the transaction was accounted for as a reduction of approximately $4.0 million of noncontrolling interests for the carrying value of those noncontrolling interests at the date of exchange with an offsetting increase in additional paid-in capital. Issuance of Common Stock for Conversion of Series AA Preferred stock During the year ended December 31, 2020, the Company issued 18,209,498 shares of its common stock in exchange for 9,104,749 shares of the Company’s Series AA Preferred Stock. Issuance of Common Stock for Shares Settled Liability During the year ended December 31, 2020, the Company issued 900,000 shares of its common stock with a fair value of approximately $9.1 million or $10.00 per share in connection with the Company’s Note Purchase Agreement with FB Loan (See Note 12). Other Issuance of Common Stock Year ended December 31, 2020 On January 1, 2020, the Company entered into the first amendment to a joint business development agreement and issued 200,000 shares of its restricted common stock with a fair value of $1.8 million in exchange for business development services. During the year ended December 31, 2020, the Company issued 636,289 shares of common stock with a fair value of $5.5 million in exchange for consulting services. In addition, the Company issued 62,500 shares of its common stock with a fair value of approximately $0.6 million in exchange for services rendered in connection with the Company’s amended Digital Likeness Development Agreement by and among Floyd Mayweather, the Company and FaceBank, Inc., effective as of July 31, 2019, as amended (the “Mayweather Agreement”). During the year ended December 31, 2020, the Company issued 70,500 shares of its common stock with a fair value of approximately $0.3 million in connection with the issuance of convertible notes. F- 38 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Year ended December 31, 2019 During the year ended December 31, 2019, the Company issued 15,009 shares of its common stock at a fair value of approximately $0.1 million or $6.72 per share for services rendered. During the year ended December 31, 2019, the Company issued 20,000 shares of its common stock at a fair value of approximately $200,000 or $10.00 per share in connection with a consulting agreement. During the year ended December 31, 2019, the Company issued 2,000 shares of its common stock at a fair value of approximately $13,000 or $6.59 per share in connection with the cancellation of a consulting agreement. On October 24, 2019, the Company satisfied its obligations under its investment agreement with Panda Productions (HK) Limited by issuing 175,000 common shares, in lieu of its obligation to fund an additional $1.0 million in cash. On October 24, 2019, the fair value of the 175,000 shares was approximately $1.9 million or $10.96 per share, and the additional $0.9 million was recorded as a loss on investment during the year ended December 31, 2019. During the year ended December 31, 2019, the Company issued 16,666 shares of its common stock with a fair value of $50,000, or $3.00 per share, upon the contractual conversion of principal of a convertible note payable. During the year ended December 31, 2019, the Company issued 18,935 shares of its common stock, at a fair value of approximately $0.1 million or $6.90 per share, to settle a lease dispute. Issuance of Common Stock for Exercise of Warrants During the year ended December 31, 2020, the Company issued 5,843,600 shares of its common stock with a fair value of approximately $27.3 million for the exercise of 7,003,005 common stock warrants and received cash of approximately $1.7 million. Issuance of Common Stock for Exercise of Stock Options During the year ended December 31, 2020, 1,418,532 options to purchase shares of the Company’s common stock were exercised for cash of approximately $2.2 million. Issuance of Common Stock for Employee Compensation On February 20, 2020, the Company issued 300,000 shares of its common stock to an officer of the Company at a fair value of $2.7 million, or $9.00 per share. During the three months ended March 31, 2020, the Company issued 200,000 shares of its common stock with a fair value of $1.6 million as compensation to service providers for services rendered. Share Purchase Agreement On July 10, 2020, we entered into a Share Purchase Agreement (the “SPA”) with C2A2 Corp. AG Ltd. and Aston Fallen (the “Purchaser”). Pursuant to the terms of the SPA, the Purchaser agreed to acquire all of the 1,000 shares of Facebank AG common stock, held by the Company. The transaction closed on July 10, 2020 and the Company redeemed an aggregate of 3,633,114 shares of the Company’s common stock at a redemption price of $0.0001 per share in exchange for 4,833,114 new shares of Company common stock at a sale price of $0.0001 per share, resulting in a net issuance of 1,200,000 new shares of the Company’s common stock. The Company and C2A2 also entered into a Call Option Agreement allowing the Company to purchase 42% of Facebank AG shares as part of the Share Purchase Agreement, for a cash consideration of CHF 1 in total for the period of 5 years following the closing. In December 2020, the Company entered into a Termination and Redemption Agreement whereby the Company agreed to terminate the Call Option Agreement in exchange for repurchasing 800,000 shares of the Company’s common shares at par value. F- 39 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Equity Compensation Plan Information The Company’s 2014 Equity Incentive Stock Plan (the “2014 Plan”) provides for the issuance of up to 16,667 incentive stock options and nonqualified stock options to the Company’s employees, officers, directors, and certain consultants. The 2014 Plan is administered by the Company’s Board and has a term of 10 years. Contemporaneous with the closing of the Merger, the Company assumed 8,051,098 stock options issued and outstanding under the fuboTV Pre-Merger 2015 Equity Incentive Plan (the “2015 Plan”) with a weighted-average exercise price of $1.32 per share. From the Effective Time, such options may be exercised for shares of our common stock under the terms of the 2015 Plan. On April 1, 2020, the Company approved the establishment of the Company’s 2020 Equity Incentive Plan (the “Plan”). The Company created an incentive option pool of 12,116,646 shares of the Company’s Common Stock under the Plan. On October 8, 2020, the Company amended the Company’s Plan to increase the maximum aggregate number of shares available for issuance under the Plan by 19,000,000 shares (the “Pool Increase”). The Pool Increase is conditional upon shareholder approval at the next annual meeting of shareholders. On May 21, 2020, we established our Outside Director Compensation Policy to set forth guidelines for the compensation of our non-employee directors for their service on our Board of Directors. Stock-based compensation During the year ended December 31, 2020, the Company recognized stock-based compensation expense as follows (in thousands): Year Ended December 31, 2020 Shares issued for services $ 13,410 Employee stock options 17,325 Market and performance based stock options 20,858 Restricted stock units 146 $ 51,739 No stock-based compensation from issuances under recognized plans were recognized during the year ended December 31, 2019. Options The Company provides stock-based compensation to employees, directors and consultants under the Plan. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. During the year ended December 31, 2020, the Company granted 14,428,566 options to purchase shares of the Company’s common stock under the Plan. During the year ended December 31, 2020, 280,000 options to purchase shares of the Company’s commons stock were granted outside of the Plan. No options were granted during the year ended December 31, 2019. The following was used in determining the fair value of stock options granted during the year ended December 31, 2020: For the Year Ended December 31, 2020 Dividend yield - Expected price volatility 44.4% - 57.3 % Risk free interest rate 0.23% - 0.58 % Expected term 5.3 - 7.5 years F- 40 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Employees A summary of activity under the Plan for the year ended December 31, 2020 is as follows (in thousands, except share and per share amounts): Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2019 16,667 $ 28.20 $ - 7.3 Options assumed from Merger 8,051,098 $ 1.31 Granted 11,350,269 $ 9.35 Exercised (1,418,532 ) $ 1.52 Forfeited or expired (448,937 ) $ 1.00 Outstanding as of December 31, 2020 17,550,565 $ 6.51 $ 376,836 8.5 Options vested and exercisable as of December 31, 2020 9,624,127 $ 5.68 $ 214,797 8.1 The total fair value of stock options granted during the year ended December 31, 2020 was approximately $106.2 million. During the year ended December 31, 2020, 1,418,532 options were exercised with a weighted average fair value of approximately $2.2 million or $1.52 per share. As of December 31, 2020, the unrecognized stock-based compensation expense related to unvested options was approximately $63.9 million to be recognized over a period of 3.6 years. Market and Service Condition Based Stock Options During the year ended December 31, 2020, 3,078,297 stock options with a fair value of approximately $20.9 million were granted to an employee of the Company. The options (which are not included in table above) vest on the earlier of each anniversary of the grant date or based on the achievement of pre-established parameters relating to the performance of the Company’s stock price Stock based compensation expense is based on the estimated value of the awards on the grant date, and is recognized over the period from the grant date through the expected vest dates of each vesting condition, both of which were estimated based on a Monte Carlo simulation model applying the following key assumptions as of the grant date: Dividend yield — % Expected volatility 76.0 – 88.1 % Risk free rate 0.24 – 0.30 % Derived service period 1.59 – 1.91 A summary of activity under the Plan for market and service based stock options for the year ended December 31, 2020 is as follows (in thousands, except share and per share amounts): Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2019 - $ - $ - - Granted 3,078,297 $ 9.69 6.8 Outstanding as of December 31, 2020 3,078,297 $ 9.69 $ 56,351 6.3 Options vested and exercisable as of December 31, 2020 3,078,297 $ 9.69 $ 56,351 6.3 During the three months ended December 31, 2020, the pre-established parameters related to the Company’s stock performance were achieved and the 3,078,297 options were fully vested. During the year ended December 31, 2020, the Company recognized $20.9 million of stock-based compensation related to its market and service-based stock options. As of December 31, 2020, there is no unrecognized stock-based compensation expense for market and service-based stock options. F- 41 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Non-employees During the three months ended March 31, 2020, in connection with the Digital Likeness Development Agreement between the Company and Floyd Mayweather, the Company granted options to purchase 280,000 shares of the Company’s common stock at an exercise price of $7.20 per share. This option has a fair value of $1,031,000, a five-year term and expires on December 21, 2024. These options were immediately vested as of the grant date. As part of the Merger, the Company also assumed 343,047 options granted to non-employees with a weighted average exercise price of $0.23 (included in employee table above). Stock-based compensation expense related to unvested non-employee options is immaterial as of December 31, 2020. Restricted Stock Units On November 25, 2020, the Company issued 85,000 restricted stock units for advisory services. The fair value of restricted stock units is measured based on their fair value at grant date, which totaled approximately $2.1 million, and the restricted stock units fully vest on May 25, 2022. During the year ended December 31, 2020, the Company recognized $0.1 million of stock-based compensation expense, and as of December 31, 2020, unrecognized stock-based compensation related to restricted stock units totaled $2.0 million. As of December 31, 2020, the restricted stock units have an aggregate intrinsic value of approximately $2.4 million and the weighted average remaining contractual term is 1.4 years. Warrants A summary of the Company’s outstanding warrants as of December 31, 2020 are presented below (in thousands, except share and per share amounts): Number of Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2019 200,007 $ 13.31 $ - 0.2 Issued 9,538,526 $ 6.62 1.7 Exercised (7,003,005 ) $ 4.96 - Expired (200,000 ) $ - $ - - Outstanding as of December 31, 2020 2,535,528 $ 8.22 $ 50,560 1.0 Warrants exercisable as of December 31, 2020 2,535,528 $ 8.22 $ 50,560 1.0 During the three months ended December 31, 2020, the Company issued 5,843,600 shares of its common stock related to the exercise of 7,003,005 common stock warrants with a fair value of $99.8 million. Warrants exercised on a cashless basis totaled 6,744,814 and warrants exercised for cash totaled 258,191, and the Company received net proceeds of approximately $1.7 million. F- 42 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Note 17 – Commitments and Contingencies Commitments: Leases The following summarizes quantitative information about the Company’s operating leases (amounts in thousands, except lease term and discount rate): The components of lease expense were as follows: For the Years Ended December 31, 2020 December 31, 2019 Operating leases Operating lease cost $ 935 $ 259 Variable lease cost - 56 Operating lease expense 935 315 Short-term lease rent expense - - Total rent expense $ 935 $ 315 Supplemental cash flow information related to leases were as follows: For the Years Ended December 31, 2020 December 31, 2019 Operating cash flows from operating leases $ 915 $ 281 Right of use assets exchanged for operating lease liabilities $ 5,373 $ 3,719 Weighted average remaining lease term - operating leases 6.3 7.8 Weighted average remaining discount rate - operating leases 5.4 % 8.0 % Maturities of the Company’s operating leases, are as follows (amounts in thousands): Year Ended December 31, 2021 $ 1,030 Year Ended December 31, 2022 778 Year Ended December 31, 2023 805 Year Ended December 31, 2024 805 Thereafter 2,110 Total 5,528 Less present value discount (870 ) Operating lease liabilities $ 4,658 Contingencies The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the financial statements taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can reasonably be made. Legal expenses associated with any contingency are expensed as incurred. F- 43 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Legal Proceedings The Company is and may in the future be involved in various legal proceedings arising from the normal course of business activities. Although the results of litigation and claims cannot be predicted with certainty, currently, the Company believes that the likelihood of any material adverse impact on the Company’s consolidated results of operations, cash flows or our financial position for any such litigation or claims is remote. Regardless of the outcome, litigation can have an adverse impact on the Company because of the costs to defend lawsuits, diversion of management resources and other factors. Said-Ibrahim v. fuboTV Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi , Case No. 21-cv-01412 (S.D.N.Y) & Lee v. fuboTV, Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi , Case No. 21-cv-01641 (S.D.N.Y.) On February 17, 2021, putative shareholders Wafa Said-Ibrahim and Adhid Ibrahim filed a class action lawsuit against the Company, co-founder and CEO David Gandler, Executive Chairman Edgar M. Bronfman Jr., and CFO Simone Nardi (collectively, the “Class Action Defendants”). Plaintiffs allege that Class Action Defendants violated federal securities laws by disseminating false and misleading statements regarding the Company’s financial health and operating condition, including the Company’s ability to grow subscription levels, future profitability, seasonality factors, cost escalations, ability to generate advertising revenue, valuation, and prospects of entering the online sports wagering market. The Plaintiffs allege that Class Action Defendants violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 thereunder, as well as Section 20(a) of the Exchange Act, and seek damages and other relief. Plaintiffs seek to pursue this claim on behalf of themselves as well as all other persons who purchased or otherwise acquired Company securities publicly traded on the New York Stock Exchange (“NYSE”) between March 23, 2020 and January 4, 2021, inclusive, and who were allegedly damaged thereby. On February 24, 2021, putative shareholder Steven Lee filed a nearly identical class action lawsuit against the same Defendants. Pursuant to the Private Securities Litigation Reform Act of 1995, any member of the purported class who wishes to serve as lead plaintiff must file a motion by April 19, 2021. The court likely also will consolidate the two lawsuits (and any other future lawsuits that assert substantially the same claims). After the court decides a consolidation motion, he will appoint a lead plaintiff and lead counsel as soon as practicable thereafter. The lead plaintiff then will file an amended, consolidated complaint, and Defendants will file a motion to dismiss the complaint. The Company believes the claims alleged in both lawsuits are without merit and intends to vigorously defend these litigations. Rosenfeld v. Edgar Bronfman Jr., Henry Ahn, Ignacio Figueras, Daniel Leff, Laura Onopchenko, David Gandler, Par-Jorgen Parson, & Simone Nardi , Case No. 21-cv-01953 (S.D.N.Y.) On March 5, 2021, putative shareholder Robert Rosenfeld filed a derivative lawsuit against the Company and certain Company directors and officers, including Edgar Bronfman Jr., Henry Ahn, Ignacio Figueras, Daniel Leff, Laura Onopchenko, David Gandler, Par-Jorgen Parson, and Simone Nardi (collectively, the “Derivative Defendants”). Plaintiff’s complaint closely tracks the allegations in the Securities Class Action and alleges that the Derivative Defendants violated Sections 10(b) and 21D of the Securities Exchange Act of 1934, breached their fiduciary duties, and committed corporate waste. Plaintiff seeks to prosecute the action on behalf of the Company, and seeks, among other relief, an order directing Derivative Defendants to take all necessary actions to reform and improve the Company’s corporate governance, risk management, and internal operating procedures to comply with applicable laws, and an award of damages to the Company for the harm suffered as a result of the alleged wrongful conduct. The Company believes these claims are without merit and intends to vigorously defend this litigation. Litigation Involving Pulse Evolution Corporation In connection with closed litigation on two separate matters that resulted in judgments against PEC, a majority interest of which was subsequently purchased by the Company, we have accrued $524,000 which remains on the balance sheet as a liability at December 31, 2019. The Company, on behalf of its subsidiary, is in settlement discussions with the parties. F- 44 fuboTV Inc. (formerly known as FaceBank Group, Inc.) Notes to Consolidated Financial Statements Andrew Kriss and Eric Lerner vs. FaceBank Group, Inc. et. al. (Index No. 605474/20 Supreme Court of the State of New York. On June 8, 2020, Andrew Kriss and Eric Lerner filed a Summons with Notice in the Supreme Court of the State of New York, Nassau County naming as defendants the Company, PEC, John Textor and Frank Patterson, among others. On November 12, 2020, plaintiffs filed a Complaint, which asserts claims for breach of express contract and implied duties, fraud in the inducement, unjust enrichment, conversion, declaratory relief, fraud, and fraudulent conveyance. The claims arise from an alleged relationship between Plaintiffs and defendant PEC. Plaintiffs seek monetary damages in an amount to be proven at trial, but not less than six million dollars ($6,000,000). The Company believes the claims are without merit and intends to vigorously defend this litigation. Other On June 25, 2018, prior to our acquisition of a majority interest in PEC, an office space vendor filed a complaint against such company (Case#: CIV1802192) in the Superior Court of the State of California, Marin County asserting breach of contract, breach of implied covenant of good faith and fair dealing, intentional misrepresentation, and negligent misrepresentation. The Company’s subsidiary then responded with affirmative defenses on September 27, 2018. The Company reached an out of court settlement on December 19, 2018 with the vendor and the case was dismissed on January 24, 2019. During the year ended December 31, 2019, the Company issued 18,935 shares of its common stock, at a fair value of approximately $0.1 million or $6.90 per share, in connection with this lease settlement. Note 18 – Subsequent Events Indenture and Notes In January and February 2021, 9,807,367 shares of Series AA Preferred Stock converted into 19,614,734 shares of common stock. On March 1, 2021, we consummated an offer to exchange the remaining outstanding shares of Series AA Preferred Stock for two shares of our common stock per share of Series AA Preferred Stock (the “Exchange Offer”). As a result of the Exchange Offer, 13,412,246 shares of Series AA Preferred Stock, representing 100% of the outstanding shares of Series AA Preferred Stock, were exchanged for 26,824,492 shares of our common stock. On February 2, 2021, the Company issued the 2026 Notes (see Note 2). Holders of the 2026 Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding November 15, 2025. On or after November 15, 2025, holders may convert all or any portion of their 2026 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. The 2026 Notes are fuboTV’s general unsecured obligations and rank senior in right of payment to all of fuboTV’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to all of fuboTV’s unsecured indebtedness that is not so subordinated; effectively junior to any of fuboTV’s secured indebtedness, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of fuboTV’s current or future subsidiaries (including trade payables). On February 26, 2021, the Company repaid in full, plus accrued interest, the PPP Note. On February 26, 2021, the Company consummated the acquisition of Vigtory, Inc, (“Vigtory”) a sports betting and interactive gaming company, by the merger of fuboBet Inc into Vigtory, whereby Vigtory continued as the surviving corporation and became a wholly owned subsidiary of the Company. The Company will account for the Merger as a business combination under the acquisition method of accounting. As such, the purchase price will be allocated to the net assets acquired, inclusive of intangible assets, with any excess fair value recorded to goodwill. Since the closing date of the acquisition occurred subsequent to the end of the reporting period, the allocation of purchase price to the underlying net assets has not yet been completed. The Company will reflect the preliminary purchase price allocation in its consolidated financial statements for the year ending December 31, 2021. In February 2021, the Company entered into a lease for new offices located at 1290 Avenue of the Americas in New York where we will occupy approximately 55,000 square feet of office space. F- 45 (b) The following exhibits are filed as a part of this Annual Report on Form 10-K: Exhibit Incorporated by Reference Number Description Form File No. Exhibit Filing Date 2.1 Share Exchange and Purchase Agreement, dated August 15, 2019, between Facebank Group, Inc. (Pulse Evolution Group, Inc.) and the shareholder of Facebank AG 8-K 000-55353 10.1 August 21, 2019 2.2 Amendment No. 1, dated August 15, 2019, to the Share Exchange and Purchase Agreement, dated August 15, 2019, between Facebank Group, Inc. 8-K 000-55353 10.2 August 21, 2019 2.3 Agreement and Plan of Merger and Reorganization dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp. and fuboTV, Inc. 8-K 000-55353 2.1 March 23, 2020 3.1(a) Articles of Incorporation dated February 20, 2009 S-1 333-176093 3.1(i) August 5, 2011 3.1(b) Articles of Amendment to Articles of Incorporation dated October 5, 2010 S-1 333-176093 3.1(ii) August 5, 2011 3.1(c) Articles of Amendment to Articles of Incorporation dated December 31, 2014 10-K 000-55353 3.1(iii) March 31, 2015 3.1(d) Articles of Amendment to Articles of Incorporation dated January 11, 2016 8-K 000-55353 3.1 January 29, 2016 3.1(e) Certificate of Designation of Series A Preferred Stock dated June 23, 2016 8-K 000-55353 4.1 June 28, 2016 3.1(f) Certificate of Designation of Series B Preferred Stock dated June 23, 2016 8-K 000-55353 4.2 June 28, 2016 3.1(g) Certificate of Designation of Series C Preferred Stock dated July 21, 2016 8-K 000-55353 4.1 July 26, 2016 3.1(h) Second Amended Certificate of Designation of Series C Preferred Stock dated March 3, 2017 8-K 000-55353 3.1 March 6, 2017 3.1(i) Articles of Amendment to Articles of Incorporation dated October 17, 2017 8-K 000-55353 3.1 December 5, 2017 3.1(j) Certificate of Designation of Preferences and Rights of Series X Convertible Preferred Stock dated August 3, 2018 8-K 000-55353 3.1 August 6, 2018 3.1(k) Articles of Amendment to Articles of Incorporation dated September 9, 2019 8-K 000-55353 3.1 September 11, 2019 3.1(l) Articles of Amendment to Articles of Incorporation dated March 16, 2020 8-K 000-55353 3.1 March 23, 2020 3.1(m) Certificate of Designation of Series AA Convertible Preferred Stock dated March 20, 2020 8-K 000-55353 3.2 March 23, 2020 3.1(n) Articles of Amendment to Articles of Incorporation dated September 29, 2016 10-Q 000-55353 3.1(n) July 6, 2020 3.1(o) Articles of Amendment to Articles of Incorporation dated January 9, 2017 10-Q 000-55353 3.1(o) July 6, 2020 3.1(p) Articles of Amendment to Articles of Incorporation dated May 11, 2017 10-Q 000-55353 3.1(p) July 6, 2020 3.1(q) Articles of Amendment to Articles of Incorporation dated February 12, 2018 10-Q 000-55353 3.1(q) July 6, 2020 3.1(r) Articles of Amendment to Articles of Incorporation dated January 29, 2019 10-Q 000-55353 3.1(r) July 6, 2020 3.1(s) Articles of Amendment to Articles of Incorporation dated July 12, 2019 10-Q 000-55353 3.1(s) July 6, 2020 3.1(t) Articles of Amendment to Articles of Incorporation dated August 10, 2020 8-K 000-55353 3.1 August 13, 2020 53 Exhibit Incorporated by Reference Number Description Form File No. Exhibit Filing Date 3.1(u) Articles of Amendment to Articles of Incorporation dated September 29, 2020 S-1 333-249783 3.1(u) October 30, 2020 3.2(a) Bylaws of the registrant S-1 333-176093 3.2 August 5, 2011 3.2(b) Amendment to the Bylaws of the registrant dated June 22, 2016 8-K 000-55353 3.1 June 28, 2016 3.2(c) Amendment to the bylaws of the Company dated July 20, 2016 8-K 000-55353 3.1 July 26, 2016 3.2(d) Amendment to the bylaws of the Company dated September 13, 2020 S-1/A 333-243876 3.2(d) September 15, 2020 4.1* Form of Common Stock Certificate 4.2 Form of Common Stock Purchase Warrant in connection with the private placement between May 11, 2020 and June 8, 2020 10-Q 000-55353 4.5 July 6, 2020 4.3 Indenture, dated as of February 2, 2021, by and between fuboTV Inc. and U.S. Bank National Association, as Trustee 8-K 001-39590 4.1 February 2, 2021 4.4 Form of Note, representing fuboTV Inc.’s 3.25% Convertible Senior Notes due 2026 (included in Exhibit 4.4) 8-K 001-39590 4.2 February 2, 2021 4.5* Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 10.1† 2014 Incentive Stock Plan 10-K 000-55353 4.1 April 16, 2014 10.2† fuboTV Inc. 2015 Equity Incentive Plan 10-Q 000-55353 10.2 July 6, 2020 10.3† Form of Stock Option Agreement under the fuboTV Inc. 2015 Equity Incentive Plan 10-Q 000-55353 10.3 July 6, 2020 10.4† fuboTV Inc. 2020 Equity Incentive Plan, as amended 8-K 001-39590 10.1 December 18, 2020 10.5† Form of Stock Option Agreement under the fuboTV Inc. 2020 Equity Incentive Plan 10-Q 000-55353 10.5 July 6, 2020 10.6† Vigtory, Inc. 2020 Equity Compensation Plan, as amended, and related form agreements S-8 333-253951 4.1 March 5, 2021 10.7 Credit and Guaranty Agreement, dated as of April 6, 2018, by and among fuboTV Inc., Sports Rights Management, LLC, FuboTV Spain, SL and AMC Networks Ventures, LLC S-1 000-55353 10.6 August 11, 2020 10.8 First Amendment to Credit Agreement, dated as of February 19, 2019, by and among fuboTV Inc., Sports Rights Management, LLC, FuboTV Spain, SL and AMC Networks Ventures, LLC, S-1 000-55353 10.7 August 11, 2020 10.9 Counterpart Agreement, dated as of April 30, 2020, by and between FaceBank Group, Inc. and AMC Networks Ventures LLC 8-K 000-55353 10.1 May 6, 2020 10.10 Form of Indemnification Agreement by and between fuboTV Inc. and its directors and officers 8-K 000-55353 10.2 April 7, 2020 10.11 Form of Securities Purchase Agreement by and between the Company and the Purchaser S-1/A 333-243876 10.48 September 15, 2020 10.12 Separation and Settlement Agreement and Release by and between FaceBank Group, Inc. and Alexander Bafer dated as of August 1, 2020 S-1/A 333-243876 10.49 October 1, 2020 10.13† Employment Agreement, by and between David Gandler and the Company, dated October 8, 2020 8-K 10.1 October 14, 2020 10.14 Redemption Agreement dated December 15, 2020 by and among fuboTV Inc. and FBNK Finance S.a.r.l. 8-K 001-39590 10.1 December 18, 2020 10.15 Lease dated February 23, 2021 by and among fuboTV Inc. and HWA 1290 III LLC, HWA 1290 IV LLC and HWA 1290 V LLC 8-K 001-39590 10.1 March 3, 2021 54 Exhibit Incorporated by Reference Number Description Form File No. Exhibit Filing Date 10.16 Form of Restricted Stock Unit Award Agreement to the fuboTV Inc. 2020 Equity Incentive Plan, as amended S-8 333-251399 4.3 December 17, 2020 10.17 Fourth Amendment to Note Purchase Agreement dated as August 3, 2020 by and among Facebank Group, Inc, Evolution AI Corporation, Pulse Evolution Corporation, fuboTV Inc. and Sports Rights Management LLC as Borrower and FB Loan Series I, LLC as Purchaser 8-K 000-55353 10.1 August 7, 2020 10.18 Waiver and Fifth Amendment to Note Purchase Agreement and First Amendment to Warrant by and among fuboTV Inc., Evolution AI Corporation, Pulse Evolution Corporation, fuboTV Media Inc and Sports Rights Management LLC as Borrower and FB Loan I Series, LLC as Purchaser dated as of September 30, 2020 S-1/A 333-243876 10.50 October 1, 2020 10.19 Form of Purchase Agreement, by and between the Company and the Purchaser. 10-Q 000-55353 10.31 July 6, 2020 10.20 Form of Securities Purchase Agreement by and between the Company and the Purchaser S-1/A 333-243876 10.48 September 15, 2020 10.21* fuboTV Inc. Outside Director Compensation Policy. 10.22 Share Purchase Agreement dated as of July 10, 2020 by and among the registrant, C2A2 Corp. AG Ltd. and Aston Fallen 8-K 000-55353 10.1 July 14, 2020 10.23* Consulting Agreement by and between the Company and Ignacio Figueras dated as of November 25, 2020 21.1 List of Significant Subsidiaries of fuboTV Inc. S-1/A 333-243876 21.1 September 15, 2020 23.1* Consent of L J Soldinger Associates, LLC, independent registered public accounting firm 23.2* Consent of KPMG LLP, independent auditor 31.1* Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended 31.2* Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended 32.1* Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended * Filed herewith. Item 16. Form 10-K Summary None. 55 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FUBOTV INC. Dated: March 25, 2021 By: /s/ David Gandler David Gandler Chief Executive Officer (Principal Executive Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Gandler and Simone Nardi, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstituting, for him and in his name, place and stead, in any and all capacities to sign any and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorney-in-fact and agent or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ David Gandler Chief Executive Officer and Director March 25, 2021 David Gandler (principal executive officer) /s/ Simone Nardi Chief Financial Officer March 25, 2021 Simone Nardi (principal financial officer and principal accounting officer) /s/ Edgar Bronfman, Jr. Executive Chairman and Director March 25, 2021 Edgar Bronfman /s/ Daniel Leff Director March 25, 2021 Daniel Leff /s/ Pär-Jörgen Pärson Director March 25, 2021 Pär-Jörgen Pärson /s/ Ignacio Figueras Director March 25, 2021 Ignacio Figueras /s/ Henry Ahn Director March 25, 2021 Henry Ahn /s/ Laura Onopchenko Director March 25, 2021 Laura Onopchenko 56